Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Taxes

9. Income Taxes

For financial reporting purposes, income before income taxes includes the following during the years ended December 31:

	2012			2011			2010
United States income (loss)	$	(507,197	)	$	91,329		$	225,555
Foreign income (loss)	$	24,052		$	(10,722	)	$	(25,390	)
	$	(483,145	)	$	80,607		$	200,165

Significant components of the provision for income taxes are as follows:

	2012			2011		2010
Current:
Federal	$	(68,791	)	$	—	$	(13,280	)
State		21,503			19,122		—
Foreign		—			—		9,334
Total current		(47,288	)		19,122		(3,946	)
Deferred:
Federal		169,923			13,302		114,738
State		1,628			463		(530	)
Foreign		7,170			10,629		21,534
		178,721			24,394		135,742
	$	131,433		$	43,516	$	131,796

The differences between the federal statutory rate and the effective tax rate as a percentage of income before taxes are as follows:

	2012			2011			2010
Statutory income tax rate		34	%		34	%		34	%
State and foreign income taxes, net of federal benefit		1			1			1
Change in valuation allowance		(69	)		—			23
Foreign earnings taxed at different rate		—			(24	)		—
Change in estimated state income tax rate		(5	)		3			—
Other permanent differences		12			40			8
Effective tax rate		(27	)%		54	%		66	%

Differences between the application of accounting principles and tax laws cause differences between the bases of certain assets and liabilities for financial reporting purposes and tax purposes. The tax effects of these differences, to the extent they are temporary, are recorded as deferred tax assets and liabilities. Significant components of the Company’s deferred tax assets and liabilities at December 31 are as follows:

	2012			2011
Deferred tax liabilities:
Property, plant and equipment	$	(192,136	)	$	(165,421	)
Prepaid expenses and other		(4,599	)		(4,599	)
Total deferred tax liabilities		(196,735	)		(170,020	)
Deferred tax assets:
Operating loss carryforwards		1,209,966			929,061
Postretirement benefits		22,047			22,047
Pension costs		691,824			666,138
Allowance for doubtful accounts		52,385			45,667
Other assets		5,719			8,008
Accrued expenses		171,444			121,219
Other employee benefits		16,009			8,746
Inventory costs		85,742			74,563
Total deferred tax assets		2,255,136			1,875,449
Net		2,058,401			1,705,429
Valuation allowance		(1,142,633	)		(699,874	)
Net	$	915,768		$	1,005,555
Current deferred tax asset	$	287,417		$	278,437
Long-term deferred tax asset		628,351			727,118
	$	915,768		$	1,005,555

As of December 31, 2012 and 2011, the Company’s gross deferred tax assets were approximately $2,058,000 and $1,705,000, respectively. Gross deferred tax assets as of December 31, 2012 reflect the benefit of approximately $2,993,000 in net operating loss carryforwards for federal and state income tax purposes which are available to offset future income tax and expire in varying amounts between 2027 and 2032. Realization of deferred tax assets is dependent on generating sufficient taxable income prior to expiration of the net operating loss carryforwards. Due to negative evidence, primarily limited operating income, indicating that a valuation allowance is required, gross deferred tax assets are reduced by a valuation allowance as of December 31, 2012 and 2011 of approximately $1,142,000 and $699,000, respectively. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. Increases in the valuation allowance in 2012 are primarily due to decreased forecasted future U.S. taxable income exclusive of timing reversals.

The Company has not provided deferred taxes for taxes that could result from the remittance of undistributed earnings of the Company’s foreign subsidiary since it has generally been the Company’s intention to reinvest these earnings indefinitely. Undistributed earnings that could be subject to additional income taxes if remitted were approximately $164,000 at December 31, 2012.

The Company files an income tax return in the U.S. federal jurisdiction, Texas, and a number of other U.S. state and local jurisdictions. Tax returns for the years 2008 through 2012 remain open for examination in various tax jurisdictions in which it operates. On January 1, 2007 the Company adopted the provisions of a new accounting pronouncement that addresses the accounting for uncertainty in income taxes recognized in the financial statements. As a result of this adoption, the Company recognized no material adjustment in the liability for unrecognized income tax benefits. At the adoption date of January 1, 2007, and at December 31, 2012, there were no unrecognized tax benefits. As of December 31, 2012, no interest related to uncertain tax positions had been accrued.