INCOME TAXES

12 Months Ended

Dec. 31, 2011

INCOME TAXES

INCOME TAXES

NOTE 5 INCOME TAXES

 Income from continuing operations before income taxes consists of:

Years Ended December 31,	2011		2010		2009
United States	$	54,161	$	43,485	$	32,938
International		220,781		210,900		151,120
Total	$	274,942	$	254,385	$	184,058

        The provision for income taxes from continuing operations is comprised of:

Years Ended December 31,	2011		2010			2009
Current:
U.S. Federal	$	21,974	$	24,371		$	20,054
State/Local		1,008		(501	)		1,182
International		66,326		56,423			39,554
	$	89,308	$	80,293		$	60,790
Deferred:
U.S. Federal/State	$	661	$	(3,055	)	$	841
International		1,343		3,558			(2,170	)
	$	2,004	$	503		$	(1,329	)
Total	$	91,312	$	80,796		$	59,461

        The difference between the actual income tax provision and the tax provision computed by applying the statutory federal income tax rate of 35.0% in 2011, 2010 and 2009 to income before income taxes is as follows:

Years Ended December 31,	2011			2010			2009
Income tax at statutory rate	$	96,230		$	89,035		$	64,420
State income taxes, net of federal benefit		1,074			(469	)		743
Research & development credits		(296	)		(1,980	)		(826	)
Provision for distribution of current foreign earnings		10,325			9,037			9,881
Brazilian capital incentive		(656	)		(2,001	)		—
Italian stimulus		—			(528	)		(501	)
Italian government special election		—			—			(1,628	)
Rate differential on earnings of foreign operations		(13,841	)		(12,439	)		(13,396	)
Other items, net		(1,524	)		141			768
Actual income tax provision	$	91,312		$	80,796		$	59,461
Effective income tax rate		33.2	%		31.8	%		32.3	%

        The tax provision for 2011 reflects the benefit of $0.7 million in Brazil related to claims filed under a program to encourage equity funding of Brazilian entities. An income tax surcharge enacted in France in December 2011 resulted in additional tax expense of $1.2 million in 2011.

        The tax provision for 2010 reflects the benefit of $2.0 million in Brazil related to claims filed under a program intended to encourage equity funding of Brazilian entities. Additional U.S. state R&D credits of $1.4 million were also realized during 2010 as a result of increased profitability. Depreciation incentives enacted as part of the 2009 Italian government stimulus provided a benefit of $0.5 million in both 2010 and 2009.

        The tax provision for 2009 reflects a $1.6 million benefit from a special election in Italy related to the revaluation of real property for tax purposes. The tax benefit is attributable to the revaluation of deferred tax liabilities to reflect the higher tax basis.

        Significant deferred tax assets and liabilities as of December 31, 2011 and 2010 are comprised of the following temporary differences:

	2011			2010
Deferred Tax Assets:
Pension liabilities	$	23,005		$	13,711
Net operating loss carryforwards		6,631			6,454
Stock options		6,704			5,725
Vacation		4,449			4,827
Inventory		3,718			4,161
Workers compensation		3,405			3,708
Accruals		3,104			2,725
Other		7,775			5,927
Total gross deferred tax assets		58,791			47,238
Less valuation allowance		(6,326	)		(5,619	)
Net deferred tax assets		52,465			41,619
Deferred Tax Liabilities:
Depreciation and amortization		41,934			37,522
Leases		7,559			7,638
Total gross deferred tax liabilities		49,493			45,160
Net deferred tax (assets) liabilities	$	(2,972	)	$	3,541

        There is no expiration date on $5.4 million of the tax-effected net operating loss carryforwards. Of the remaining amount of net operating loss carryforwards, $1.2 million (tax effected) will expire in the years 2012 to 2019.

        The Company has established a valuation allowance primarily for the deferred tax assets related to non-U.S. tax loss carryforwards as well as an amount for U.S. state tax credits. Management does not believe the benefit of a majority of the non-U.S. loss carryforwards ($5.6 million) and a portion of the U.S. state tax credits ($0.7 million) will be realized. Increased profitability in 2011 allowed the Company to release a valuation allowance of $0.3 million prior to foreign currency impact adjustments. This amount was previously provided for the benefit of U.S. state loss carryforwards.

        The Company repatriated a portion of non-U.S. subsidiary earnings in 2011, 2010, and 2009 in the amounts of $82 million, $81 million, and $78 million, respectively. All of these amounts were received from our European operations except $3 million from Canada in 2009. The Company has expressed the intent to reinvest the remainder of the undistributed earnings of its non-U.S. subsidiaries.

        Except for Canada, all repatriations were from current year earnings and not from funds previously considered permanently reinvested. Due to an asset acquisition and restructuring activities, $3 million of funds previously determined to be permanently reinvested in Canada were returned to the U.S. in 2009. The tax effects related to these repatriations were recorded in the period the repatriation decision was made.

        As of December 31, 2011, the Company had $918.5 million of undistributed earnings from non-U.S. subsidiaries which have been designated as permanently reinvested. The Company has not made a provision for U.S. or additional foreign taxes on this amount as it is not practical to estimate the amount of additional tax that might be payable on these undistributed non-U.S. earnings. These earnings will continue to be reinvested indefinitely and could become subject to additional tax if they were remitted as dividends or lent to a U.S. affiliate, or if the Company should sell its stock in the subsidiaries.

        The Company has not provided for taxes on certain tax-deferred income of a foreign operation. The income arose predominately from government grants. Taxes of approximately $2.3 million would become payable in the event the terms of the grant are not fulfilled.

INCOME TAX UNCERTAINTIES

 The Company provides a liability for the amount of tax benefits realized from uncertain tax positions. A reconciliation of the beginning and ending amount of income tax uncertainties is as follows:

	2011			2010			2009
Balance at January 1	$	10,893		$	10,806		$	9,661
Increases based on tax positions for the current year		150			643			1,728
Increases based on tax positions of prior years		128			2,309			1,281
Decreases based on tax positions of prior years		(1,090	)		(1,362	)		(672	)
Settlements		(457	)		(381	)		(168	)
Lapse of statute of limitations		(553	)		(1,122	)		(1,024	)
Balance at December 31	$	9,071		$	10,893		$	10,806

        The amount of income tax uncertainties that, if recognized, would impact the effective tax rate is $8.5 million. The Company estimates that it is reasonably possible that the liability for uncertain tax positions will decrease no more than $5.0 million in the next twelve months from the resolution of various uncertain positions as a result of the completion of tax audits, litigation and the expiration of the statute of limitations in various jurisdictions.

        The Company recognizes interest and penalties accrued related to unrecognized tax benefits as a component of income taxes. As of December 31, 2011, 2010 and 2009, the Company had approximately $1.4 million, $1.6 million and $1.8 million accrued for the payment of interest and penalties, of which approximately $(0.2) million, $(0.2) million and $0.4 million was recognized in income tax expense in the years ended December 31, 2011, 2010 and 2009, respectively.

        The Company or its subsidiaries file income tax returns in the U.S. Federal jurisdiction and various state and foreign jurisdictions. The major tax jurisdictions the Company files in, with the years still subject to income tax examinations, are listed below:

Major Tax Jurisdiction	Tax Years Subject to Examination
United States — Federal	2009 – 2011
United States — State	2004 – 2011
France	2008 – 2011
Germany	2006 – 2011
Italy	2007 – 2011
Switzerland	2000 – 2011