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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Components of income (loss) from continuing operations before taxes and noncontrolling interest

Income (loss) from continuing operations before taxes and noncontrolling interests consists of the following components:

	Years ended December 31,
	2012			2011		2010

Domestic	$	(15,995	)	$	2,143	$	32,493
Foreign		186,032			328,973		373,040
	$	170,037		$	331,116	$	405,533

Components of income taxes

Significant components of income taxes are as follows:

	Years ended December 31,
	2012			2011			2010

Current:
Federal	$	8,409		$	10,968		$	9,823
State and local		574			(801	)		2,434
Foreign		44,351			66,844			59,459
		53,334			77,011			71,716
Deferred:
Federal		(8,557	)		6,188			(949	)
State and local		(240	)		(2,286	)		2,108
Foreign		1,969			10,206			(27,635	)
		(6,828	)		14,108			(26,476	)
Total income tax expense	$	46,506		$	91,119		$	45,240

Deferred tax assets and liabilities

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows:

	December 31,
	2012			2011
Deferred tax assets:
Pension and other retiree obligations	$	58,577		$	48,810
Inventories		13,881			10,711
Net operating loss carryforwards		158,638			159,831
Tax credit carryforwards		16,180			11,225
Other accruals and reserves		34,194			40,494
Total gross deferred tax assets		281,470			271,071
Less valuation allowance		(166,266	)		(156,073	)
		115,204			114,998
Deferred tax liabilities:
Tax over book depreciation		(13,975	)		(16,208	)
Earnings not permanently reinvested		(1,652	)		(25,960	)
Convertible debentures		(149,113	)		(105,830	)
Other - net		(2,711	)		(2,515	)
Total gross deferred tax liabilities		(167,451	)		(150,513	)

Net deferred tax assets (liabilities)	$	(52,247	)	$	(35,515	)

Federal statutory income tax rate reconciliation

A reconciliation of income tax expense at the U.S. federal statutory income tax rate to actual income tax provision is as follows:

	Years ended December 31,
	2012			2011			2010
Tax at statutory rate	$	59,513		$	115,891		$	141,937
State income taxes, net of U.S. federal tax benefit		217			(2,005	)		2,952
Effect of foreign operations		(19,083	)		(52,609	)		(69,034	)
Unrecognized tax benefits		6,626			4,869			(1,823	)
Change in valuation allowance on U.S. deferred tax asset		-			-			(36,229	)
Change in valuation allowance on non-U.S. deferred tax assets		(4,036	)		(5,554	)		(21,671	)
Tax benefit of operating loss carryforwards		(671	)		(1,588	)		(8,799	)
Foreign income taxable in the U.S.		7,476			22,822			31,294
Tax on foreign dividends paid to the U.S.		-			15,453			1,417
U.S. foreign tax credits		(4,257	)		(12,322	)		-
Effect of statutory rate changes on deferred tax assets		-			9,040			1,128
Other		721			(2,878	)		4,068
Total income tax expense	$	46,506		$	91,119		$	45,240

Net operating loss carryforwards

At December 31, 2012, the Company had the following significant net operating loss carryforwards for tax purposes:

			Expires
Austria	$	9,696	No expiration
Belgium		188,658	No expiration
Brazil		18,833	No expiration
Germany		47,180	No expiration
Israel		95,733	No expiration
Netherlands		23,519	2013 - 2021

California		53,909	2016 - 2032
Pennsylvania		548,532	2018 - 2032

Summary of significant tax credit carryforwards available

At December 31, 2012, the Company had the following significant tax credit carryforwards available:

			Expires
U.S. Foreign Tax Credit	$	10,482	2020 - 2022
California Research Credit		7,937	No expiration

Unrecognized tax benefits

The following table summarizes changes in the liabilities associated with unrecognized tax benefits:

	Years ended December 31,
	2012			2011			2010

Balance at beginning of year	$	53,808		$	54,285		$	54,463
Addition based on tax positions related to the current year		665			2,459			1,916
Addition based on tax positions related to prior years		6,332			10,918			3,090
Currency translation adjustments		(162	)		(922	)		451
Reduction based on tax positions related to prior years		-			(3,293	)		(670	)
Reduction for settlements		(359	)		(9,604	)		(3,289	)
Reduction for lapses of statute of limitation		-			(35	)		(1,676	)
Balance at end of year	$	60,284		$	53,808		$	54,285

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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- Definition

Tabular disclosure of tax credit carryforwards available to reduce future taxable income, including amounts, expiration dates, limitations on use and the related deferred tax assets and valuation allowances.

+ References+ Details