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As of December 31, 2012, the Company had U.S. federal, U.S. state and non-U.S. tax loss and credit carryforwards that will expire, if unused, as follows: 

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As of December 31, 2012, the Company has determined that it is more likely than not that $62.1 million of its deferred tax assets related to tax loss and credit carryforwards will not be realized. As a result, the Company has recorded a valuation allowance against these deferred tax assets as shown in the table above. The Company has also determined that it is more likely than not that a portion of the benefit related to U.S. state and non-U.S. deferred tax assets other than tax loss and credit carryforwards will be not realized. Accordingly, a $52.9 million valuation allowance has been estab- lished against these U.S. state and non-U.S. deferred tax assets. The Company’s total valuation allowance at December 31, 2012 is $115.0 million. 

## Unrecognized Tax Benefits 

A reconciliation of the beginning and ending amount of the Compa- ny’s gross unrecognized tax benefits, excluding interest and penal- ties, is as follows: 

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The amount of the Company’s unrecognized tax benefits that, if recognized, would affect its effective tax rate was $18.9 million, $9.3 million, and $2.8 million as of December 31, 2012, 2011 and 2010, respectively. The difference between these amounts for 2012 and 2011 and those reflected in the table above relates to (1) offsetting tax effects from other tax jurisdictions, and (2) interest expense, net of deferred taxes. 

The Company recognizes interest and penalties related to unrecog- nized tax benefits as a component of its income tax expense. During the years ended December 31, 2012, 2011 and 2010, the Company 

recognized $0.4 million of interest and penalty expense, $0.2 mil- lion of interest and penalty expense and $0.4 million of interest income, respectively, related to unrecognized tax benefits in its consolidated statement of operations. At December 31, 2012 and December 31, 2011, the Company recognized $1.0 million and $0.6 million, respectively, of interest and penalty expense related to unrecognized tax benefits in its consolidated balance sheet. 

During the next twelve months, it is reasonably possible that $4.1 million of the Company’s unrecognized tax benefits could change as a result of completed audits and / or settlements, the expiration of statutes of limitation or other resolutions of uncertainties. 

## Income Tax Examinations 

The Company’s income tax returns are subject to examination by the U.S. federal, U.S. state and local, and non-U.S. tax authorities. The Internal Revenue Service has completed its examinations of the Company’s consolidated U.S. federal income tax returns through 2008. The Company’s consolidated U.S. federal income tax return for the years 2009 through 2011, together with those of acquired subsidiaries, remain open to examination. 

With few exceptions, the Company is no longer subject to U.S. state and local or non-U.S. income tax examinations for years before 2007. As of December 31, 2012, the Company and its subsidiaries are under examination in various jurisdictions, including Germany (2006 through 2009), Hungary (2009 and 2010), and California (2007 and 2008). During 2012, examinations were completed in Germany (2002 through 2005) and the UK (2007 through 2009), and resulted in minimal assessments. In addition, the Company is currently appealing tax assessments in Canada (2007 through 2009). Overall, the Company believes that adequate accruals have been provided for all jurisdictions’ open years. 

## Note 4 – Accrued Liabilities 

Accrued liabilities consist of: 

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