v2.4.1.9

Income Taxes Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Taxes [Abstract]

Income Tax Provision [Table Text Block]

The following table summarizes the provision (benefit) for U.S. federal, state, and foreign taxes on income from continuing operations:

	Year Ended December 31,
	2014				2013				2012
	(in thousands)
Current:
Federal	$	17,248			$	145			$	11,935
State and local	730				1,089				1,387
Foreign	20,205				21,860				19,448
Total current	38,183				23,094				32,770
Deferred:
Federal	(78,901		)		(16,413		)		12,195
State and local	(682		)		(2,472		)		468
Foreign	(52,610		)		(25,872		)		(32,293		)
Total deferred	(132,193		)		(44,757		)		(19,630		)
Change in valuation allowance	100,651				17,999				12,855
Total provision (benefit) for income taxes	$	6,641			$	(3,664	)		$	25,995

Income Tax Rate Reconciliation [Table Text Block]

A reconciliation of income taxes at the U.S. federal statutory rate of 35% to the consolidated actual tax rate is as follows:

	Year Ended December 31,
	2014				2013				2012
	(in thousands)
Income (loss) before income taxes
Domestic	$	92,933			$	19,016			$	167,299
Foreign	(107,842		)		(167,270		)		(31,080		)
Total income (loss) before income taxes	$	(14,909	)		$	(148,254	)		$	136,219
Expected federal income tax provision (benefit)	$	(5,218	)		$	(51,889	)		$	47,677
Goodwill impairment	119				49,730				(1,905		)
Change in valuation allowance	100,651				17,999				12,855
Stock-based compensation	1,255				1,598				1,787
Foreign earnings (1)	(30,417		)		(15,655		)		(36,536		)
Tax credits	(91,148		)		(10,352		)		(2,174		)
Uncertain tax positions, including interest and penalties	974				1,360				(2,740		)
Change in tax rates	(20		)		1,442				174
State income tax provision (benefit), net of federal effect	(984		)		(2,291		)		1,242
U.S. tax provision on foreign earnings	31,309				(245		)		2,370
Domestic production activities deduction	(2,312		)		(146		)		(2,612		)
Local foreign taxes	2,295				3,212				3,635
Other, net	137				1,573				2,222
Total provision (benefit) for income taxes	$	6,641			$	(3,664	)		$	25,995

⁽¹⁾ Foreign earnings for all jurisdictions are classified as a single reconciling item to be consistent with the current year presentation.

Deferred Tax Assets and Liabilities [Table Text Block]

Deferred tax assets and liabilities consist of the following:

	At December 31,
	2014				2013
	(in thousands)
Deferred tax assets
Loss carryforwards(1)	$	188,607			$	174,360
Tax credits(2)	81,903				16,073
Accrued expenses	54,393				40,593
Pension plan benefits expense	19,679				13,464
Warranty reserves	19,141				16,704
Depreciation and amortization	19,111				16,770
Equity compensation	10,039				9,908
Inventory valuation	4,420				2,942
Other deferred tax assets, net	8,968				9,858
Total deferred tax assets	406,261				300,672
Valuation allowance	(256,619		)		(161,026		)
Total deferred tax assets, net of valuation allowance	149,642				139,646
Deferred tax liabilities
Depreciation and amortization	(37,061		)		(50,606		)
Tax effect of accumulated translation	(568		)		(1,551		)
Other deferred tax liabilities, net	(2,299		)		(2,883		)
Total deferred tax liabilities	(39,928		)		(55,040		)
Net deferred tax assets	$	109,714			$	84,606

⁽¹⁾  For tax return purposes at December 31, 2014, we had U.S. federal loss carryforwards of $19.8 million that expire during the years 2020 and 2021. At December 31, 2014, we have net operating loss carryforwards in Luxembourg of $441.3 million that can be carried forward indefinitely, offset by a full valuation allowance. The remaining portion of the loss carryforwards are composed primarily of losses in various other foreign jurisdictions. The majority of these losses can be carried forward indefinitely. At December 31, 2014, there was a valuation allowance of $256.6 million primarily associated with foreign loss carryforwards and foreign tax credit carryforwards (discussed below).

⁽²⁾  For tax return purposes at December 31, 2014, we had: (1) U.S. general business credits of $18.2 million, which begin to expire in 2022; (2) U.S. alternative minimum tax credits of $2.5 million that can be carried forward indefinitely; and (3) U.S. foreign tax credits of $75.4 million, which begin to expire in 2019. At December 31, 2014, there was a valuation allowance of $58.5 million associated with foreign tax credit carryforward.

Unrecognized Tax Benefits Related To Uncertain Tax Positions [Table Text Block]

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

Unrecognized tax benefits at January 1, 2012	$	28,482
Gross increase to positions in prior years	299
Gross decrease to positions in prior years	(51		)
Gross increases to current period tax positions	3,347
Audit settlements	(27		)
Decrease related to lapsing of statute of limitations	(5,769		)
Effect of change in exchange rates	152
Unrecognized tax benefits at December 31, 2012	$	26,433
Gross increase to positions in prior years	2,154
Gross decrease to positions in prior years	(536		)
Gross increases to current period tax positions	1,670
Audit settlements	—
Decrease related to lapsing of statute of limitations	(817		)
Effect of change in exchange rates	(289		)
Unrecognized tax benefits at December 31, 2013	$	28,615
Gross increase to positions in prior years	2,749
Gross decrease to positions in prior years	(1,641		)
Gross increases to current period tax positions	3,008
Audit settlements	—
Decrease related to lapsing of statute of limitations	(1,715		)
Effect of change in exchange rates	(2,870		)
Unrecognized tax benefits at December 31, 2014	$	28,146

	At December 31,
	2014				2013				2012
	(in thousands)
The amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate	$	26,980			$	27,694			$	25,852

We classify interest expense and penalties related to unrecognized tax benefits and interest income on tax overpayments as components of income tax expense. The net interest and penalties expense (benefit) recognized is as follows:

	Year Ended December 31,
	2014				2013				2012
	(in thousands)
Net interest and penalties expense (benefit)	$	(76	)		$	(898	)		$	(414	)

	At December 31,
	2014				2013
	(in thousands)
Accrued interest	$	1,755			$	2,078
Accrued penalties	2,671				3,075

At December 31, 2014, we are under examination by certain tax authorities for the 2000 to 2012 tax years. The material jurisdictions where we are subject to examination for the 2000 to 2012 tax years include, among others, the U.S., France, Germany, Italy, Brazil and the United Kingdom. No material changes have occurred to previously disclosed assessments. We believe we have appropriately accrued for the expected outcome of all tax matters and do not currently anticipate that the ultimate resolution of these examinations will have a material adverse effect on our financial condition, future results of operations, or liquidity.

Based upon the timing and outcome of examinations, litigation, the impact of legislative, regulatory, and judicial developments, and the impact of these items on the statute of limitations, it is reasonably possible that the related unrecognized tax benefits could change from those recorded within the next twelve months. However, at this time, an estimate of the range of reasonably possible adjustments to the balance of unrecognized tax benefits cannot be made.

We file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. We are subject to income tax examination by tax authorities in our major tax jurisdictions as follows:

Tax Jurisdiction		Years Subject to Audit
U.S. federal		Subsequent to 1999
France		Subsequent to 2009
Germany		Subsequent to 2007
Brazil		Subsequent to 2008
United Kingdom		Subsequent to 2011
Italy		Subsequent to 2007

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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