Taxes on Income

12 Months Ended

Dec. 31, 2012

Taxes on Income and Uncertain Tax Positions [Abstract]

Taxes on Income [Text Block]

Note 10 – Taxes on Income and Uncertain Tax Positions

Taxes (benefit) on income consist of the following:

			Year Ended December 31,
			2012		2011		2010
Current:
	Federal	$	3,318	$	3,485	$	1,429
	State		(69)		385		195
	Foreign		9,972		7,955		9,143
			13,221		11,825		10,767
Deferred:
	Federal		4,409		2,022		1,204
	State		(794)		0		0
	Foreign		(1,261)		409		645
Total		$	15,575	$	14,256	$	12,616

The components of earnings before income taxes were as follows:

		Year Ended December 31,
		2012		2011		2010
Domestic	$	26,520	$	24,071	$	9,482
Foreign		36,428		35,306		36,731
Total	$	62,948	$	59,377	$	46,213

Total deferred tax assets and liabilities are composed of the following at December 31:

	2012				2011
		Current		Non-current		Current		Non-current
Retirement benefits	$	614	$	14,397	$	808	$	9,907
Allowance for doubtful accounts		1,984		0		755		0
Insurance and litigation reserves		580		260		683		424
Postretirement benefits		0		2,543		0		2,259
Supplemental retirement benefits		0		2,501		69		2,303
Performance incentives		3,002		520		3,139		383
Equity-based compensation		349		395		239		449
Alternative minimum tax carryforward		0		0		0		447
Insurance settlement		10		9,425		26		9,698
Operating loss carryforward		0		9,425		0		3,010
Uncertain tax positions		0		7,700		0		7,911
Interest rate swaps and other		679		1,039		786		216
		7,218		48,205		6,505		37,007
Valuation allowance		(710)		(7,148)		0		(1,377)
Total deferred income tax assets, net	$	6,508	$	41,057	$	6,505	$	35,630
Depreciation		0		5,069		0		3,123
Europe pension and other		0		2,552		0		2,481
Amortization and other		360		9,146		405		7,297
Total deferred income tax liabilities	$	360	$	16,767	$	405	$	12,901

Following are the changes in the Company's deferred tax asset valuation allowance for the years ended December 31, 2012, December 31,2011 and December 31,2010:

								Effect of
		Balance at		Additional		Allowance		Exchange		Balance
		Beginning		Valuation		Utilization		Rate		at End
		of Period		Allowance		and Other		Changes		of Period
VALUATION ALLOWANCE
Year ended December 31, 2012	$	1,377	$	6,594	$	(34)	$	(79)	$	7,858
Year ended December 31, 2011	$	4,923	$	348	$	(3,753)	$	(141)	$	1,377
Year ended December 31, 2010	$	5,666	$	38	$	(769)	$	(12)	$	4,923

The Company's net deferred tax assets and liabilities are classified in the Consolidated Balance Sheet as follows:

	2012		2011
Current deferred tax assets	$	6,401	$	6,338
Non-current deferred tax assets		30,673		29,823
Current deferred tax liabilities		253		238
Non-current deferred tax liabilities		6,383		7,094
Net deferred tax asset	$	30,438	$	28,829

The following is a reconciliation of income taxes at the Federal statutory rate with income taxes recorded by the Company for the years ended December 31, 2012, December 31, 2011 and December 31, 2010:

			2012		2011		2010
Income tax provision at the Federal statutory tax rate		$	22,032	$	20,782	$	16,175
Differences in tax rates on foreign earnings and
	remittances		(3,207)		(3,692)		(2,546)
Foreign dividends			815		735		15,645
Excess foreign tax credit utilization			(2,237)		(2,493)		(15,198)
Research and development activities credit utilization			0		(1,348)		0
Uncertain tax positions			(1,196)		701		(1,130)
Domestic production activities deduction			(402)		0		(932)
State income tax provisions, net			(45)		250		127
Non-deductible entertainment and business meals
	expense		200		166		152
Non-taxable gain on acquisition			0		(951)		0
Miscellaneous items, net			(385)		106		323
Taxes on income		$	15,575	$	14,256	$	12,616

At December 31, 2012, the Company domestically had a net deferred tax asset of $13,907. In addition, the Company has foreign tax loss carryforwards of $12,553 of which $23expires in 2014, $352expires in 2015, $68expires in 2016, $344expires in 2017, $247expires in 2018, $291expires in 2019, $102expires in 2020, $245expires in 2021, $258 expires in 2022 and $183expires in 2023; the remaining foreign tax losses have no expiration dates. A partial valuation allowance has been established with respect to the tax benefit of these losses for $1,443.

U.S. income taxes have not been provided on the undistributed earnings of non-U.S. subsidiaries because it is the Company's intention to continue to reinvest these earnings in those subsidiaries to support growth initiatives. U.S. and foreign income taxes that would be payable if such earnings were distributed may be lower than the amount computed at the U.S. statutory rate due to the availability of tax credits. The amount of such undistributed earnings at December 31,2012 was approximately $150,000. Any income tax liability which might result from ultimate remittance of these earnings is expected to be substantially offset by foreign tax credits.

As of December 31,2012, the Company's cumulative liability for gross unrecognized tax benefits was $12,410. The Company had accrued $1,630 for cumulative penalties and $2,288for cumulative interest at December 31,2012. As of December 31, 2011, the Company's cumulative liability for gross unrecognized tax benefits was $12,719. The Company had accrued $1,298 for cumulative penalties and $2,268for cumulative interest at December 31,2011.

The Company continues to recognize interest and penalties associated with uncertain tax positions as a component of taxes on income before equity in net income of associated companies in its Consolidated Statement of Income. The Company has recognized $301 for penalties and ($26) for interest (net of expirations and settlements) on its Consolidated Statement of Income for the twelve-month period ended December 31,2012.The Company recognized $502 for penalties and $529 for interest (net of expirations and settlements) on its Consolidated Statement of Income for the twelve-month period ended December 31, 2011. The Company recognized ($12) for penalties and $80 for interest (net of expirations and settlements) on its Consolidated Statement of Income for the twelve-month period ended December 31, 2010.

The Company estimates that during the year ending December 31,2013, it will reduce its cumulative liability for gross unrecognized tax benefits by approximately $2,300 to $2,400 due to the expiration of the statute of limitations with regard to certain tax positions. This estimated reduction in the cumulative liability for unrecognized tax benefits does not consider any increase in liability for unrecognized tax benefits with regard to existing tax positions or any increase in cumulative liability for unrecognized tax benefits with regard to new tax positions for the year endingDecember 31, 2013.

The Company and its subsidiaries are subject to U.S. Federal income tax, as well as the income tax of various state and foreign tax jurisdictions. Tax years that remain subject to examination by major tax jurisdictions include The Netherlands from 2006, United Kingdomfrom 2007, Brazil and Spain from 2008, the United States from 2009, Chinaand Italy from 2010, and various domestic state tax jurisdictions from 1993.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the years endedDecember 31,2012, December 31,2011 and December 31,2010, respectively, is as follows:

			2012		2011		2010
Unrecognized tax benefits at January 1		$	12,719	$	10,464	$	10,686
	Increase in unrecognized tax benefits taken in prior periods		0		1,597		0
	(Decrease) in unrecognized tax benefits taken in prior periods		(411)		0		0
	Increase in unrecognized tax benefits taken in current period		1,733		2,623		2,249
	(Decrease) in unrecognized tax benefits due to lapse of statute of limitations		(1,837)		(1,578)		(1,828)
	Increase (decrease) due to foreign exchange rates		206		(387)		(643)
Unrecognized tax benefits at December 31		$	12,410	$	12,719	$	10,464

The amount of unrecognized tax benefits above that, if recognized, would impact the Company's tax expense and effective tax rate is $1,652, $2,966 and $3,427 in 2012, 2011 and 2010, respectively.