Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

The following tables present components of income tax expense/(benefit) and income/(loss) before income taxes on continuing operations:

(in thousands)	2013		2012		2011

Income tax based on income from continuing operations, at estimated tax rates of 49%, 39%, and 33%, respectively	$15,172		$19,769		$17,814
Pension plan settlements	-		(39,460	)	-
Income tax before discrete items	15,172		(19,691	)	17,814

Discrete tax (benefit)/expense:
Provision for/adjustment to beginning of year valuation allowances	(3,741	)	(2,442	)	22,798
Provision for/resolution of tax audits and contingencies, net	2,643		(2,747	)	289
Adjustments to prior period tax liabilities	(942	)	(1,471	)	(1,624	)
Repatriation of non-U.S. prior years' earnings	618		-		-
Enacted tax legislation	(282	)	(973	)	115
Change in tax status	-		-		(3,344	)
Adjustment to correct a prior year error	-		-		(3,553	)
Other discrete tax adjustments, net	(96	)	(199	)	87
Total income tax expense/(benefit)	$13,372		($27,523	)	$32,582

(in thousands)	2013		2012		2011
Income/(loss) before income taxes:
U.S.	$14,395		($84,624	)	($9,748	)
Non-U.S.	16,681		16,258		63,596
	$31,076		($68,366	)	$53,848

Income tax provision:

Current:
Federal	$3,508		($20,123	)	($9,288	)
State	2,301		(1,212	)	120
Non-U.S.	14,957		12,413		17,879
	$20,766		($8,922	)	$8,711

Deferred:
Federal	$1,723		($12,851	)	$3,519
State	(180	)	(1,538	)	113
Non-U.S.	(8,937	)	(4,212	)	20,239
	($7,394	)	($18,601	)	$23,871

Total provision for income taxes	$13,372		($27,523	)	$32,582

The significant components of deferred income tax (benefit)/expense are as follows:

(in thousands)	2013		2012		2011
Net effect of temporary differences	($334	)	($7,557	)	$1,593
Foreign tax credits	2,378		9,468		(5,668	)
Postretirement benefits	1,482		(18,337	)	5,119
Net impact to operating loss carryforwards	(6,897	)	1,240		3,258
Enacted changes in tax laws and rates	(282	)	(973	)	115
Adjustments to beginning-of-the-year valuation
allowance balance for changes in circumstances	(3,741	)	(2,442	)	22,798
Changes in tax status	-		-		(3,344	)
Total	($7,394	)	($18,601	)	$23,871

A reconciliation of the U.S. federal statutory tax rate to the Company's effective income tax rate is as follows:

	2013		2012		2011
U.S. federal statutory tax rate	35.0	%	35.0	%	35.0	%
State taxes, net of federal benefit	4.9		3.5		0.3
Non-U.S. local income taxes	8.7		0.5		0.4
Foreign rate differential	0.2		(1.7	)	(14.3	)
U.S. tax on non-U.S. earnings and foreign withholdings	5.3		(1.2	)	12.8
Provision for/resolution of tax audit and contingencies, net	8.5		4.0		0.5
Provision for/adustment to beginning of year valuation allowances	(12.0	)	(3.7	)	42.1
Research and development and other tax credits	(3.8	)	0.9		(2.2	)
Change in tax status	-		-		(6.2	)
Adjustment to correct prior year error	-		-		(6.4	)
Other	(3.8	)	3.0		(1.5	)
Effective income tax rate	43.0	%	40.3	%	60.5	%

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


	U.S.				Non-U.S.
	2013		2012		2013			2012
(in thousands)
Current deferred tax assets:
Accounts receivable		$1,526		$1,733		$2,397			$2,437
Inventories		1,432		1,589		2,411			2,052
Tax credit carryforwards		1,000		3,000		-			-
Other		2,867		3,413		3,058			6,370
Current deferred tax assets
before valuation allowance		$6,825		$9,735		$7,866			$10,859

Less: valuation allowance		-		-		(818	)		-
Total current deferred tax assets		$6,825		$9,735		$7,048			$10,859

Noncurrent deferred tax assets:
Deferred compensation		5,794		5,668		-			-
Depreciation and amortization		4,289		5,004		3,505			2,958
Postretirement benefits		28,038		38,632		4,540			4,480
Tax loss carryforwards		1,457		1,032		76,026			78,968
Tax credit carryforwards		23,992		24,504		1,508			1,561
Other		2,834		4,119		371			557
Noncurrent deferred tax assets
before valuation allowance		66,404		78,959		85,950			88,524

Less: valuation allowance		-		-		(49,169	)		(60,348	)
Total noncurrent deferred tax assets		66,404		78,959		36,781			28,176

Total deferred tax assets		$73,229		$88,694		$43,829			$39,035

Current deferred tax liabilities:
Unrepatriated foreign earnings		$667		$1,521		$-			$-
Inventories		-		-		1,366			1,383
Other		-		-		1,822			12
Total current deferred tax liabilities		667		1,521		3,188			1,395

Noncurrent deferred tax liabilities:
Depreciation and amortization		13,169		15,296		8,357			10,106
Postretirement benefits		-		-		1,377			4,726
Deferred gain		9,013		-		-			-
Branch losses subject to recapture		-		-		12,380			12,959
Other		-		68		2,394			2,473
Total noncurrent deferred tax liabilities		22,182		15,364		24,508			30,264
Total deferred tax liabilities		22,849		16,885		27,696			31,659

Net deferred tax asset		$50,380		$71,809		$16,133			$7,376

A reconciliation of the beginning and ending amount of unrecognized tax benefits, in accordance with applicable accounting guidance, is as follows:


(in thousands)	2013			2012			2011

Unrecognized tax benefits balance at January 1		$24,386			$27,053			$23,467

Increase in gross amounts of tax positions related to prior years		2,121			9,454			8,040

Decrease in gross amounts of tax positions related to prior years		-			-			(37	)

Increase in gross amounts of tax positions related to current year		2,622			381			1,005

Decrease due to settlements with tax authorities		(16,721	)		(13,099	)		(4,576	)

Decrease due to lapse in statute of limitations		-			(20	)		-

Currency translation		130			617			(846	)

Unrecognized tax benefits balance at December 31		$12,538			$24,386			$27,053

As of December 31, 2013 and 2012, noncurrent taxes receivable and deferred consisted of the following:

(in thousands)	2013	2012
Income taxes receivable	$16,427	$16,751
Deferred income taxes	103,185	107,135
Total noncurrent deferred taxes and taxes receivable	$119,612	$123,886

As of December 31, 2013 and 2012, current taxes payable and deferred consisted of the following:

(in thousands)	2013	2012
Taxes payable	$1,536	$10,636
Deferred income taxes	3,855	2,916
Total current income taxes payable and deferred	$5,391	$13,552