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Income Taxes | 12 Months Ended
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Dec. 31, 2012
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | 5. Income Taxes The provision for income taxes included in the accompanying consolidated financial statements represents federal, state and foreign income taxes. The components of income before income taxes and the provision for income taxes consist of the following:
Years ended December 31 |  | 2012 |  |  | 2011 |  |  | 2010 |
Income (loss) before income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Domestic |  | $ | 3,411 |  |  | $ | 62,510 |  |  | $ | (4,405 | )
Foreign |  |  | 1,149 |  |  |  | 9,132 |  |  |  | 16,429 |
Total income before income taxes |  | $ | 4,560 |  |  | $ | 71,642 |  |  | $ | 12,024 |
Provision for income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | - |  |  | $ | - |  |  | $ | - |
State and foreign |  |  | 3,545 |  |  |  | 2,167 |  |  |  | 1,147 |
Total current provision |  |  | 3,545 |  |  |  | 2,167 |  |  |  | 1,147 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 98 |  |  |  | 23,443 |  |  |  | 1,188 |
State and foreign |  |  | (2,831 | ) |  |  | 495 |  |  |  | (1,657 | )
Total deferred provision (benefit) |  |  | (2,733 | ) |  |  | 23,938 |  |  |  | (469 | )
Total provision for income taxes |  | $ | 812 |  |  | $ | 26,105 |  |  | $ | 678 |
A reconciliation of the Company’s effective income tax rate to the statutory federal tax rate is as follows:
Years ended December 31 |  | 2012 |  |  | 2011 |  |  | 2010 |
Statutory U.S. deferal income tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State income taxes, net of federal tax benefit |  |  | 3.8 |  |  |  | 0.2 |  |  |  | 1.3 |
Tax credits |  |  | - |  |  |  | (1.4 | ) |  |  | (7.5 | )
Foreign rate differential |  |  | (16.1 | ) |  |  | (1.4 | ) |  |  | (51.4 | )
Reduction (increase) of income tax accruals |  |  | 0.5 |  |  |  | 0.1 |  |  |  | (0.1 | )
Tax on foreign dividends, net of foreign tax credits |  |  | 45.6 |  |  |  | 1.1 |  |  |  | 39.0 |
Reduction of deferred taxes |  |  | 6.4 |  |  |  | 0.3 |  |  |  | 7.4 |
Valuation allowances |  |  | (78.3 | ) |  |  | (1.4 | ) |  |  | (9.7 | )
Loss of domestic flow-through entity not attributable to Stoneridge, Inc. |  |  | 6.8 |  |  |  | 1.9 |  |  |  | 0.5 |
Non-deductible compensation |  |  | 12.8 |  |  |  | 0.3 |  |  |  | 4.9 |
Other comprehensive income |  |  | - |  |  |  | - |  |  |  | (9.6 | )
Other |  |  | 1.3 |  |  |  | 1.7 |  |  |  | (4.2 | )
Effective income tax rate |  |  | 17.8 | % |  |  | 36.4 | % |  |  | 5.6 | %
The Company recognized a provision for income taxes of $812 or 17.8%, $26,105 or 36.4% and $678 or 5.6% of our income before income tax for federal, state and foreign income taxes for the years ended December 31, 2012, 2011 and 2010, respectively. The decrease in tax expense for the year ended December 31, 2012 compared to the same period for 2011 was primarily attributable to the tax provided in 2011 related to the gain recognized on the write-up to fair market value of the historic investment in PST. In addition, the overall tax expense related to the investment in PST was lower in 2012 as compared to 2011 due to the consolidation of PST effective December 31, 2011. Finally, the decrease in tax expense was partially offset by providing a valuation allowance against certain deferred tax assets related to our European operations in 2012. The effective tax rate for 2012 declined primarily due to the improvement in U.S. results which do not attract tax due to the valuation allowance. Unremitted earnings of foreign subsidiaries were $14,962 as of December 31, 2012. Because these earnings have been indefinitely reinvested in foreign operations, no provision has been made for U.S. income taxes. It is impracticable to determine the amount of unrecognized deferred taxes with respect to these earnings; however, foreign tax credits may be available to reduce U.S. income taxes in the event of a distribution. Significant components of the Company’s deferred tax assets and liabilities were as follows:
As of December 31 |  | 2012 |  |  | 2011 |
Deferred tax assets: |  |  |  |  |  |  |  |
Inventories |  | $ | 3,200 |  |  | $ | 3,128 |
Employee salary and benefits |  |  | 3,860 |  |  |  | 3,542 |
Insurance |  |  | 562 |  |  |  | 759 |
Depreciation and amortization |  |  | 10,029 |  |  |  | 14,448 |
Net operating loss carryforwards |  |  | 44,057 |  |  |  | 44,094 |
General business credit carryforwards |  |  | 11,897 |  |  |  | 10,987 |
Reserves not currently deductible |  |  | 5,420 |  |  |  | 6,315 |
Gross deferred tax assets |  |  | 79,025 |  |  |  | 83,273 |
Less: Valuation allowance |  |  | (71,790 | ) |  |  | (78,211 | )
Deferred tax assets less valuation allowance |  |  | 7,235 |  |  |  | 5,062 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | (29,615 | ) |  |  | (35,845 | )
Basis difference - equity investee |  |  | (31,016 | ) |  |  | (31,016 | )
Other |  |  | (4,315 | ) |  |  | (1,600 | )
Gross deferred tax liabilities |  |  | (64,946 | ) |  |  | (68,461 | )
Net deferred tax liability |  | $ | (57,711 | ) |  | $ | (63,399 | )
The Company has concluded based on objective evidence that at December 31, 2012 and 2011 it is more likely than not that sufficient taxable income will not be generated to utilize the remaining U.S. federal, and certain state and foreign, deferred tax assets before they expire and as such a valuation allowance has been recorded. The valuation allowance represents the amount of tax benefit related to U.S. federal, state and foreign net operating losses, credits and other deferred tax assets. The Company has net operating loss carry forwards of $91,159, $92,797 and $15,517 for U.S. federal, state and foreign tax jurisdictions, respectively. The U.S. federal net operating losses, if unused, begin to expire in December 31, 2025, the state net operating losses expire at various times and the foreign net operating losses expire at various times or have indefinite expiration dates. The Company has general business and foreign tax credit carry forwards of $10,868, $2,144 and $1,810 for U.S. federal, state and foreign jurisdictions respectively. The U.S. federal general business credits, if unused, begin to expire in December 31, 2021, and the state and foreign tax credits expire at various times. The Company is required to provide a deferred tax liability corresponding to the difference between the financial reporting basis (which was remeasured to fair value upon the acquisition of an additional 24% of PST in 2011) and the tax basis in the previously held 50% ownership interest in PST (the “outside” basis difference). This outside basis difference will generally remain fixed until (1) dividends from the subsidiary exceed the parent’s share of earnings subsequent to the date it became a subsidiary or (2) there is a transaction that affects the Company’s ownership of PST. During the fourth quarter of 2010 we undertook a secondary offering. As a result of the secondary offering a substantial change in our ownership occurred and we experienced an ownership change pursuant to Section 382 of the Code. There was no impact to current or deferred income taxes resulting from the ownership change. The following is a reconciliation of the Company’s total gross unrecognized tax benefits:
|  | 2012 |  |  | 2011 |  |  | 2010 |
Balance as of January 1 |  | $ | 3,452 |  |  | $ | 3,101 |  |  | $ | 2,838 |
Tax positions related to the current year: |  |  |  |  |  |  |  |  |  |  |  |
Additions |  |  | 93 |  |  |  | 381 |  |  |  | 387 |
Tax positions related to prior years: |  |  |  |  |  |  |  |  |  |  |  |
Additions |  |  | - |  |  |  | 28 |  |  |  | - |
Reductions |  |  | (58 | ) |  |  | - |  |  |  | (11 | )
Expiration of statutes of limitation |  |  | (71 | ) |  |  | (58 | ) |  |  | (113 | )
Balance as of December 31 |  | $ | 3,416 |  |  | $ | 3,452 |  |  | $ | 3,101 |
At December 31, 2012 the Company has classified $889 as a noncurrent liability and $2,876 as a reduction to non-current deferred income tax assets. The amount of unrecognized tax benefits is not expected to change significantly during the next 12 months. Management is currently unaware of issues under review that could result in a significant change or a material deviation in this estimate. If the Company’s tax positions are sustained by the taxing authorities in favor of the Company, approximately $3,278 would affect the Company’s effective tax rate. Consistent with historical financial reporting, the Company has elected to classify interest expense and, if applicable, penalties which could be assessed related to unrecognized tax benefits as a component of income tax expense. For the years ended December 31, 2012, 2011 and 2010, the Company recognized approximately $64, $67 and $45 of gross interest and penalties, respectively. The Company has accrued approximately $706 and $740 for the payment of interest and penalties at December 31, 2012 and 2011, respectively. The Company conducts business globally and, as a result, files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business the Company is subject to examination by taxing authorities throughout the world. The following table summarizes the open tax years for each important jurisdiction:
Jurisdiction |  | Open Tax Years |
U.S. Federal |  |  | 2009-2012 |
Brazil |  |  | 2007-2012 |
China |  |  | 2009-2012 |
France |  |  | 2008-2012 |
Mexico |  |  | 2008-2012 |
Spain |  |  | 2008-2012 |
Sweden |  |  | 2007-2012 |
United Kingdom |  |  | 2008-2012 |

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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