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Income Taxes | 12 Months Ended
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Dec. 31, 2013
Income Taxes [Abstract] |
Income Taxes | 8. Income Taxes The Company’s provision for income taxes consists of the following:
|  | Year ended December 31, |
|  | 2013 |  |  | 2012 |  |  | 2011 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 48,287 |  |  | $ | 34,170 |  |  | $ | 14,312 |
State |  |  | 5,648 |  |  |  | 3,854 |  |  |  | 1,885 |
Foreign |  |  | 2,214 |  |  |  | 81 |  |  |  | – |
|  |  | 56,149 |  |  |  | 38,105 |  |  |  | 16,197 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 42,003 |  |  |  | 21,972 |  |  |  | 15,632 |
State |  |  | 5,523 |  |  |  | 3,048 |  |  |  | 1,887 |
Foreign |  |  | 167 |  |  |  | 25 |  |  |  | – |
|  |  | 47,693 |  |  |  | 25,045 |  |  |  | 17,519 |
Change in valuation allowance |  |  | 335 |  |  |  | (21 | ) |  |  | (271,393 | )
Provision for income taxes |  | $ | 104,177 |  |  | $ | 63,129 |  |  | $ | (237,677 | )
The Company is the taxpaying entity and files a consolidated federal income tax return. Currently, the Company is not under examination by any major taxing jurisdiction to which the Company is subject. As of December 31, 2013, due to the carryforward of unutilized net operating losses and research and development credits, the Company is subject to U.S. Federal income tax examinations for the tax years 2006 through 2013, and to state income tax examinations for the tax years 2006 through 2013. In addition, the Company is subject to audit by various foreign taxing jurisdictions for the tax years 2007 through 2013. Interest and penalties are recorded separately from income tax expense, as part of pre-tax book income. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2013, 2012 and 2011. The Company was in a three year cumulative net loss position, due primarily to a 2008 goodwill and tradename impairment write-off, and therefore had not considered expected future taxable income in analyzing the realizability of the deferred tax assets as of December 31, 2010, resulting in a full valuation allowance against these net deferred tax assets. In the fourth quarter of 2011, the Company was no longer in a three-year cumulative loss position and, as part of the normal assessment of the future realization of the net deferred tax assets, determined that a valuation allowance was no longer required. As a result, the valuation allowance was reversed in the fourth quarter of 2011 and the Company recorded as a tax benefit of $271,393. Significant components of deferred tax assets and liabilities are as follows:
|  | December 31, |
|  | 2013 |  |  | 2012 |
Deferred tax assets: |  |  |  |  |  |
Goodwill and intangible assets |  | $ | 74,992 |  |  | $ | 125,457 |
Accrued expenses |  |  | 24,263 |  |  |  | 26,606 |
Deferred revenue |  |  | 4,413 |  |  |  | 3,503 |
Inventories |  |  | 4,483 |  |  |  | 2,544 |
Pension obligations |  |  | 4,043 |  |  |  | 9,064 |
Stock-based compensation |  |  | 6,609 |  |  |  | 6,408 |
Operating loss and credit carryforwards |  |  | 976 |  |  |  | 24,915 |
Interest rate swaps |  |  | - |  |  |  | 1,119 |
Other |  |  | 2,089 |  |  |  | 36 |
Valuation allowance |  |  | (1,021 | ) |  |  | (806 | )
Total deferred tax assets |  |  | 120,847 |  |  |  | 198,846 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation |  |  | 15,163 |  |  |  | 12,274 |
Debt refinancing costs |  |  | 7,494 |  |  |  | - |
Prepaid expenses |  |  | 1,183 |  |  |  | 1,131 |
Total deferred tax liabilities |  |  | 23,840 |  |  |  | 13,405 |
Net deferred tax asset |  | $ | 97,007 |  |  | $ | 185,441 |
The net current and noncurrent components of deferred taxes included in the consolidated balance sheets are as follows:
|  | December 31, |
|  | 2013 |  |  | 2012 |
Net current deferred tax assets |  | $ | 26,869 |  |  | $ | 48,687 |
Net long-term deferred tax assets |  |  | 86,125 |  |  |  | 137,560 |
Net long-term deferred tax liabilities |  |  | (14,966 | ) |  |  | - |
Valuation allowance |  |  | (1,021 | ) |  |  | (806 | )
Net deferred tax assets |  | $ | 97,007 |  |  | $ | 185,441 |
Acquired as part of the Ottomotores acquisition, Ottomotores Brazil generated net operating losses for multiple years. The realizability of the deferred tax assets associated with these net operating losses is uncertain so a valuation allowance has been recorded in the opening balance sheet as of December 8, 2012 as well as at December 31, 2012 and 2013. At December 31, 2013, the Company has state net operating loss carryforwards of approximately $10, which expire between 2023 and 2025. As a result of ownership changes, Section 382 of the Internal Revenue Code of 1986 as amended and similar state provisions can limit the annual deductions of net operating loss and tax credit carry forwards. Such annual limitations could result in the expiration of net operating loss and tax credit carry forwards before utilization. The Company has no such limitation as of December 31, 2012 and if a limitation was triggered in 2013, the Company believes any limitation would not be significant. At December 31, 2013 and 2012, the Company has no reserves recorded for uncertain tax positions. The Company considers the earnings of certain non-U.S. subsidiaries to be indefinitely invested outside the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and the Company’s specific plans for reinvestment of those subsidiary earnings. The Company has not provided for additional U.S. income taxes on approximately $8,666 of undistributed earnings of consolidated non-U.S. subsidiaries. It is not practicable to estimate the amount of unrecognized withholding taxes and deferred tax liability on such earnings. A reconciliation of the statutory tax rates and the effective tax rates for the years ended December 31, 2013, 2012 and 2011 are as follows:
|  | Year ended December 31, |
|  | 2013 |  |  | 2012 |  |  | 2011 |
U.S. statutory rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State taxes |  |  | 3.7 |  |  |  | 4.1 |  |  |  | 4.0 |
Valuation allowance |  |  | 0.2 |  |  |  | - |  |  |  | (312.3 | )
Other |  |  | -1.5 |  |  |  | 1.3 |  |  |  | - |
Effective tax rate |  |  | 37.4 | % |  |  | 40.4 | % |  |  | (273.3 | )%

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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