Income Tax Provision (Text Block)

12 Months Ended

Dec. 31, 2011

Income Tax Provision [Abstract]

Income Taxes [Text Block]

NOTE 11 – INCOME TAXES

Income before income taxes		2011		2010		2009
U.S.	$	(28,238)	$	(32,260)	$	(48,217)
Foreign		91,902		130,363		59,367
Total	$	63,664	$	98,103	$	11,150

The components of the income tax provision (benefit) are as follows:

		2011		2010		2009
Current tax provision (benefit)
Federal	$	14,049	$	330	$	-
Foreign		18,324		23,211		7,458
State		214		25		14
		32,587		23,566		7,472
Deferred tax provision (benefit)
Federal		(20,906)		243		(4,510)
Foreign		(1,165)		(7,079)		(3,050)
State		(466)		-		-
		(22,537)		(6,836)		(7,560)
Liability for unrecognized tax benefits		107		1,109		1,390
Total income tax provision	$	10,157	$	17,839	$	1,302

Effective Tax Rate Reconciliation

Reconciliation between the effective tax rate and the statutory tax rates for the years ended December 31, 2011, 2010 and 2009 is as follows:

		2011			2010			2009
			Percent			Percent			Percent
			of pretax			of pretax			of pretax
		Amount	earnings		Amount	earnings		Amount	earnings
Federal tax	$	22,282	35.0	$	34,336	35.0	$	3,881	35.0
State income taxes, net of federal tax provision (benefit)		(366)	(0.6)		293	0.3		(196)	(1.8)
Foreign income taxed at lower tax rates		(6,356)	(10.0)		(5,050)	(5.2)		(14,536)	(131.1)
Subpart F income and foreign dividends		1,115	1.8		1,786	1.8		12,346	111.3
Foreign tax credits, net of valuation allowance		(5,843)	(9.2)		(6,503)	(6.6)		(1,933)	(17.4)
Liability for unrecognized tax benefits		107	0.2		1,109	1.1		1,390	12.5
U.S. provision-to-return adjustments		(167)	(0.3)		(2,345)	(2.4)		(1,663)	(15.0)
Valuation allowance - net operating loss carryforwards		-	-		(5,820)	(5.9)		1,840	16.6
Other		(615)	(1.0)		33	0.1		173	1.6
Income tax provision	$	10,157	15.9	$	17,839	18.2	$	1,302	11.7

Uncertain Tax Positions

In accordance with the provisions related to accounting for uncertainty in income taxes, the Company recognizes the benefit of a tax position if the position is “more likely than not” to prevail upon examination by the relevant tax authority. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2011	2010
Balance at January 1,	$ 9,173	$ 8,064
Additions based on tax positions related to the current year	2,233	1,934
Reductions for prior years tax positions	(1,229)	(825)
Balance at December 31,	$ 10,177	$ 9,173

It is reasonably possible that the amount of the unrecognized benefit with respect to certain of the Company's unrecognized tax positions will significantly increase or decrease within the next 12 months. These changes may be the result of settlements of ongoing audits or competent authority proceedings. At this time, an estimate of the range of the reasonably possible outcomes cannot be made.

The Company files income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for tax years before 2007. With respect to state and local jurisdictions and countries outside of the U.S., with limited exceptions, the Company is no longer subject to income tax audits for years before 2006. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest and penalties, if any, have been provided for in the Company's reserve for any adjustments that may result from future tax audits. The Company recognizes accrued interest and penalties, if any, related to unrecognized tax benefits in income tax expense. The Company had an insignificant amount of accrued interest and penalties at December 31, 2011 and December 31, 2010.

Deferred Taxes

       At December 31, 2011 and 2010, the Company's deferred tax assets and liabilities are comprised of the following items:

		2011		2010
Deferred tax assets, current
Inventory cost	$	2,158	$	5,657
Accrued expenses and accounts receivable		1,754		1,546
Share based compensation and others		1,538		1,073
Total deferred tax assets, current	$	5,450	$	8,276
Deferred tax assets, non-current
Plant, equipment and intangible assets	$	(1,818)	$	1,325
Foreign tax credits		19,354		19,993
Research and development tax credits		4,098		3,884
Net operating loss carryforwards		1,600		2,156
Accrued pension		11,750		15,078
Share based compensation and others		23,945		10,625
		58,929		53,061
Valuation allowances		(28,099)		(25,855)
Total deferred tax assets, non-current		30,830		27,206
Deferred tax liabilities, non-current
Step up in basis - acquisition		(3,967)		(10,321)
Convertible debt interest		-		(15,311)
Total deferred tax liabilities, non-current		(3,967)		(25,632)
Net deferred tax assets, non-current	$	26,863	$	1,574

0.18

At December 31, 2011, the Company had federal and state tax credit carryforwards of approximately $24 million and $1million, respectively which are available to offset future income tax liabilities. The federal tax credit carryforwards begin to expire in 2012 and the state tax credit carryforwards will begin to expire in 2020. The Company determined that it is more likely than not that a portion of its federal foreign tax credit carryforwards will expire before they are utilized. Accordingly, the Company recorded valuation allowances of $1 million, $2 million and $4 million during the years ended December 31, 2011, 2010 and 2009, respectively.  

At December 31, 2011, the Company had federal and state net operating loss (“NOL”) carryforwards of approximately $1 million and $17 million, respectively, which are available to offset future regular and alternative minimum taxable income. The state NOL carryforwards will begin to expire in 2013. The Company determined that it is more likely than not that the state NOL carryforwards will expire before they are fully utilized and recorded a full valuation allowance on the state NOL carryforwards in prior years. The Company maintained this full valuation allowance for the year ended December 31, 2011.

Supplemental Information

Funds repatriated from foreign subsidiaries to the U.S. may be subject to federal and state income taxes. The Company intends to permanently reinvest overseas all of its earnings from its foreign subsidiaries; accordingly, U.S. taxes are not being recorded on undistributed foreign earnings. As of December 31, 2011, the Company has undistributed earnings from its non-U.S. operations of approximately $265 million (including approximately $33 million of restricted earnings which are not available for dividends). Additional federal and state income taxes of approximately $45 million would be required should such earnings be repatriated to the U.S.

The impact of tax holidays decreased the Company's tax expense by approximately $7million, $8million and $7million for the years ended December 31, 2011, 2010 and 2009, respectively. The benefit of the tax holidays on both basic and diluted earnings per share for the year ended December 31, 2011 was approximately $0.15. The benefit of the tax holidays on basic and diluted earnings per share for the year ended December 31, 2010 was approximately $0.19 and $0.18, respectively. The benefit of the tax holidays on both basic and diluted earnings per share for the year ended December 31, 2009 was approximately $0.17.

During 2011, the Company realized a tax benefit of $15million related to exercises of non-qualified stock options and to disqualified dispositions of incentive stock options. The Company credited additional paid-in capital to record this benefit.