Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

INCOME TAXES:

NOTE 13 – INCOME TAXES:

Income before income taxes and equity losses in Chinese joint venture was comprised of the following:

	2012		2011		2010
Domestic	$	14,754	$	30,629	$	17,664
Foreign		413		4,098		6,958
	$	15,167	$	34,727	$	24,622

At December 31, 2012, the Corporation has state net operating loss carryforwards of $25,188 which begin to expire in 2018 through 2032 and capital loss carryforwards of $1,019 which begin to expire in 2014.

The provision (benefit) for taxes on income consisted of the following:

	2012			2011			2010
Current:
Federal	$	2,550		$	6,047		$	4,983
State		184			754			995
Foreign		(61	)		140			364
		2,673			6,941			6,342
Deferred:
Federal		2,142			3,518			2,210
State		360			2			(494	)
Foreign		175			2,633			1,284
Reversal of valuation allowance		(132	)		(178	)		(655	)
		2,545			5,975			2,345
	$	5,218		$	12,916		$	8,687

The provision (benefit) for taxes on income was affected by the reversal of valuation allowances previously provided against deferred income tax assets associated with state net operating loss carryforwards for 2012 and 2011, and foreign tax credits and capital loss carryforwards for 2010.

The difference between statutory U.S. federal income tax and the Corporation’s effective income tax was as follows:

	2012			2011			2010
Computed at statutory rate	$	5,309		$	12,154		$	8,618
Tax differential on non-U.S. earnings		(45	)		(358	)		(355	)
State income taxes		403			1,296			902
Manufacturers deduction (I.R.C. Section 199)		(257	)		(792	)		(449	)
Meals and entertainment		198			220			191
Tax credits		(64	)		(29	)		(165	)
Chinese joint venture		(558	)		(175	)		(168	)
Reversal of valuation allowance		(132	)		(178	)		(655	)
Subpart F income inclusion		0			0			615
Other – net		364			778			153
	$	5,218		$	12,916		$	8,687

Deferred income tax assets and liabilities as of December 31, 2012 and 2011 are summarized below. The current portion of net deferred income tax assets is included in other current assets. Unremitted earnings of the Corporation’s non-US subsidiaries and affiliates are deemed to be permanently reinvested, and accordingly, no deferred tax liability has been recorded. It is not practical to estimate the income tax effect that might be incurred if cumulative prior year earnings not previously taxed in the U.S were remitted to the U.S.

	2012			2011
Assets:
Employment – related liabilities	$	12,814		$	12,129
Pension liability – foreign		3,984			3,562
Pension liability – domestic		19,574			14,178
Liabilities related to discontinued operations		1,155			1,322
Capital loss carryforwards		391			418
Asbestos-related liability		23,702			26,882
Net operating loss – state		1,795			1,616
Other		5,820			6,827
Gross deferred income tax assets		69,235			66,934
Valuation allowance		(2,887	)		(3,042	)
		66,348			63,892
Liabilities:
Depreciation		(31,931	)		(30,124	)
Mark-to-market adjustment – derivatives		(153	)		(42	)
Other		(2,353	)		(1,824	)
Gross deferred income tax liabilities		(34,437	)		(31,990	)
Net deferred income tax assets	$	31,911		$	31,902

The following summarizes changes in unrecognized tax benefits:

	2012			2011			2010
Balance at the beginning of the year	$	311		$	786		$	804
Gross increases for tax positions taken in the current year		233			81			55
Gross increases for tax positions taken in prior years		18			0			0
Gross decreases in tax positions due to lapse in statute of limitations		(120	)		(498	)		(29	)
Gross decreases for tax positions taken in prior years		0			(25	)		(44	)
Gross decreases for tax settlements with taxing authorities		0			(33	)		0
Balance at the end of the year	$	442		$	311		$	786

If the unrecognized tax benefits were recognized, $354 would reduce the Corporation’s effective income tax rate. The amount of penalties and interest recognized in the consolidated balance sheets as of December 31, 2012 and 2011 and in the consolidated statements of operations for 2012, 2011 and 2010 is insignificant. Unrecognized tax benefits of $55 are to expire due to the lapse in the statute of limitations within the next 12 months.

The Corporation is subject to taxation in the U.S., various states and foreign jurisdictions, and remains subject to examination by tax authorities for tax years 2009-2012. The consolidated U.S. federal income tax return for 2009 was under examination by the Internal Revenue Service but was completed in 2012 without adjustment.