Income Taxes

(Loss) Income before income taxes and equity in earnings of joint venture generated by the Company’s U.S. and non-U.S. operations were as follows:



	2012			2011			2010
U.S	$	(28,398	)	$	(26,321	)	$	(19,420	)
Non-U.S.	12,856			11,708			5,094

The Company’s income tax expense (benefit) is comprised of the following:



	2012			2011			2010
Federal
current	$	(842	)	$	(1,204	)	$	6,823
deferred	(1,542		)	(2,041		)	(11,270		)
State
current	629			461			17
deferred	401			(1,218		)	(186		)
Foreign
current	2,927			2,970			1,464
deferred	(143		)	(94		)	51
	$	1,430		$	(1,126	)	$	(3,101	)

The reconciliation between the Company’s effective tax rate on income or loss and the U.S. federal income tax rate of 35% is as follows:



	2012			2011			2010
Federal income tax at statutory rates	$	(5,439	)	$	(5,115	)	$	(5,014	)
State income taxes, net of federal income tax benefits	22			(1,007		)	(313		)
Permanent items:
Dividends received deductions	(766		)	—			—
Convertible debt mark-to-market - non-deductible	6,206			1,551
Other permanent differences	480			662			326
Federal and state income tax on joint venture	2,766			4,478			2,158
Rate differential on foreign income	(1,680		)	(726		)	(755		)
Unrecognized tax benefits	(557		)	(576		)	424
Audit settlements	218			—			—
State rate changes	(68		)	(478		)	—
Other	248			85			73
Income tax expense (benefit)	$	1,430		$	(1,126	)	$	(3,101	)
Effective income tax expense rate	9.2		%	7.7		%	21.7		%

Significant components of the Company’s deferred tax assets and liabilities are as follows:



	2012		2011
Deferred tax assets:
Postretirement benefits	$	3,830	$	3,675
Deferred compensation	1,940		1,916
Deferred gain	—		271
Impairments	1,452		1,311
Alternative minimum tax and net operating loss carryforward	3,487		2,635
Total deferred tax assets	$	10,709	$	9,808
Deferred tax liabilities:
Depreciation	$	8,032	$	8,307
Inventory	1,146		1,695
Pension	4,240		5,742
Intangible assets and goodwill	24,224		16,486
Other, net	1,665		1,475
Total deferred tax liabilities	39,307		33,705
Net deferred tax liabilities	$	28,598	$	23,897

As of December 31, 2012, the Company has federal, state and foreign net operating losses ("NOLs") as follows:



	Amount		Expiration Period
Federal	$	—
State	19,499		2015 to 2032
Foreign	2,473		(a)

(a) Foreign NOLs of $369 expire in 2014 and $2,104 do not expire.

Based on all available evidence, including historical and forecasted financial results, the Company determined that it is more likely than not that the federal, state and foreign NOLs that have expiration dates will be realized due to the fact that the Company anticipates it will be able to have sufficient earnings in future years to use the NOL carryforwards prior to expiration. To the extent that the Company does not generate sufficient state or foreign taxable income within the statutory carryforward periods to utilize the NOL carryforwards in the respective jurisdictions, they will expire unused. However, based upon all available evidence, the Company has concluded that it will utilize these NOL carryforwards prior to the expiration period.

The following table shows the net change in the Company’s unrecognized tax benefits:



	2012			2011			2010
Balance as of January 1	$	861		$	1,465		$	726
Increases (decreases) in unrecognized tax benefits:
Due to tax positions taken in prior years	—			91			729
Due to tax positions taken during the current year	45			60			44
Due to settlement with tax authorities	(757		)	—			(34		)
Due to expiration of statute	(44		)	(755		)	—
Balance as of December 31	$	105		$	861		$	1,465

Unrecognized tax benefits of $105, $861 and $950 would impact the effective tax rate if recognized as of December 31, 2012, 2011 and 2010, respectively. The accrued interest and penalties related to unrecognized tax benefits were insignificant at December 31, 2012 and 2011. The interest and penalties recorded by the Company were insignificant for the years ended December 31, 2012, 2011 and 2010.

During 2012 and 2011, statutes expired on certain unrecognized tax benefits of the Company. The reversal of the reserve of these unrecognized tax benefits was recorded as a component of overall income tax benefit for the years ended December 31, 2012 and 2011, respectively.

The Company or its subsidiaries files income tax returns in the United States federal jurisdiction, 29 states, and 7 foreign jurisdictions.

The following tax years remain open to examination by the major taxing jurisdictions to which the Company is subject:



U.S. Federal	2010 to 2011
U.S. States	2008 to 2011
Foreign	2007 to 2011

During the second quarter of 2012, audits of the Company’s 2008 and 2009 U.S. federal income tax returns were concluded with no significant assessment. During 2011, the Company recognized $423 of tax benefits, excluding interest, due to the expiration of the statute of limitations for uncertain tax positions taken in prior years. Due to the potential for resolution of the examination or expiration of statutes of limitations, it is reasonably possible that the Company’s gross unrecognized tax benefits may change within the next 12 months by a range of zero to $60.

The Company received its 2010 federal tax refund of $2,025 during February 2012 and its 2009 federal income tax refund of $6,344 during January 2011.