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Income Taxes (Text Block) | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes [Text Block] | Income Taxes The following table summarizes the provision (benefit) for U.S. federal, state, and foreign taxes on income from continuing operations:
| Year Ended December 31,
| 2016 |  | 2015 |  | 2014
| (in thousands)
Current: |  |  |  |  |
Federal | $ | 20,490 |  |  | $ | 5,033 |  |  | $ | 17,749 |
State and local | 2,708 |  |  | 1,633 |  |  | 775 |
Foreign | 12,586 |  |  | 13,945 |  |  | 20,269 |
Total current | 35,784 |  |  | 20,611 |  |  | 38,793 |
Deferred: |  |  |  |  |
Federal | 10,805 |  |  | 3,951 |  |  | (82,186 | )
State and local | 1,160 |  |  | (972 | ) |  | (979 | )
Foreign | (24,815 | ) |  | (41,893 | ) |  | (51,646 | )
Total deferred | (12,850 | ) |  | (38,914 | ) |  | (134,811 | )
Change in valuation allowance | 26,640 |  |  | 40,402 |  |  | 100,053 |
Total provision for income taxes | $ | 49,574 |  |  | $ | 22,099 |  |  | $ | 4,035 |
The change in the valuation allowance does not include the impacts of currency translation adjustments or significant intercompany transactions. Our tax provision as a percentage of income before tax was 58.6%, 59.6%, and (22.1)% for 2016, 2015, and 2014, respectively. Our actual tax rate differed from the 35% U.S. federal statutory tax rate due to various items. 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,
| 2016 |  | 2015 |  | 2014
| (in thousands)
Income (loss) before income taxes |  |  |  |  |
Domestic | $ | 196,750 |  |  | $ | 115,526 |  |  | $ | 86,605 |
Foreign | (112,123 | ) |  | (78,424 | ) |  | (104,870 | )
Total income (loss) before income taxes | $ | 84,627 |  |  | $ | 37,102 |  |  | $ | (18,265 | )
Expected federal income tax provision (benefit) | $ | 29,619 |  |  | $ | 12,986 |  |  | $ | (6,393 | )
Goodwill impairment | — |  |  | — |  |  | 119 |
Change in valuation allowance | 26,640 |  |  | 40,402 |  |  | 100,053 |
Stock-based compensation | 2,762 |  |  | 939 |  |  | 1,255 |
Foreign earnings | (12,584 | ) |  | (33,364 | ) |  | (31,544 | )
Tax credits | (7,471 | ) |  | (5,257 | ) |  | (91,148 | )
Uncertain tax positions, including interest and penalties | 3,817 |  |  | 4,274 |  |  | 1,519 |
Change in tax rates | 67 |  |  | 312 |  |  | (20 | )
State income tax provision (benefit), net of federal effect | 2,806 |  |  | (14 | ) |  | (1,235 | )
U.S. tax provision on foreign earnings | 997 |  |  | 203 |  |  | 31,309 |
Domestic production activities deduction | (2,424 | ) |  | (1,100 | ) |  | (2,312 | )
Local foreign taxes | 2,914 |  |  | 1,450 |  |  | 2,295 |
Other, net | 2,431 |  |  | 1,268 |  |  | 137 |
Total provision for income taxes | $ | 49,574 |  |  | $ | 22,099 |  |  | $ | 4,035 |
Deferred tax assets and liabilities consist of the following:
| At December 31,
| 2016 |  | 2015
| (in thousands)
Deferred tax assets |  |  |
Loss carryforwards(1) | $ | 194,381 |  |  | $ | 190,545 |
Tax credits(2) | 53,323 |  |  | 52,131 |
Accrued expenses | 36,336 |  |  | 33,546 |
Pension plan benefits expense | 16,822 |  |  | 16,232 |
Warranty reserves | 21,306 |  |  | 25,129 |
Depreciation and amortization | 15,698 |  |  | 21,499 |
Equity compensation | 6,924 |  |  | 9,303 |
Inventory valuation | 3,086 |  |  | 4,068 |
Deferred revenue | 4,896 |  |  | 9,097 |
Tax effect of accumulated translation | — |  |  | 291 |
Other deferred tax assets, net | 13,621 |  |  | 11,770 |
Total deferred tax assets | 366,393 |  |  | 373,611 |
Valuation allowance | (249,560 | ) |  | (235,339 | )
Total deferred tax assets, net of valuation allowance | 116,833 |  |  | 138,272 |
Deferred tax liabilities |  |  |
Depreciation and amortization | (19,995 | ) |  | (27,000 | )
Tax effect of accumulated translation | (100 | ) |  | — |
Other deferred tax liabilities, net | (5,698 | ) |  | (3,608 | )
Total deferred tax liabilities | (25,793 | ) |  | (30,608 | )
Net deferred tax assets | $ | 91,040 |  |  | $ | 107,664 |
(1) | For tax return purposes at December 31, 2016, we had U.S. federal loss carryforwards of $13.2 million that expire during the years 2020 and 2021. At December 31, 2016, we have net operating loss carryforwards in Luxembourg of $483.5 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 state and foreign jurisdictions. The majority of these losses can be carried forward indefinitely. At December 31, 2016, there was a valuation allowance of $249.6 million primarily associated with foreign loss carryforwards and foreign tax credit carryforwards (discussed below).
(2) | For tax return purposes at December 31, 2016, we had: (1) U.S. general business credits of $15.3 million, which begin to expire in 2022; (2) U.S. alternative minimum tax credits of $2.5 million that can be carried forward indefinitely; (3) U.S. foreign tax credits of $49.4 million, which begin to expire in 2024; and (4) state tax credits of $10.0 million, which begin to expire in 2017. At December 31, 2016, there was a valuation allowance of $32.3 million associated with foreign tax credit carryforwards, and $6.0 million associated with state tax credit carryforwards.
We recognize valuation allowances to reduce deferred tax assets to the extent we believe it is more likely than not that a portion of such assets will not be realized. In making such determinations, we consider all available favorable and unfavorable evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and our ability to carry back losses to prior years. We are required to make assumptions and judgments about potential outcomes that lie outside management’s control. Our most sensitive and critical factors are the projection, source, and character of future taxable income. Although realization is not assured, management believes it is more likely than not that deferred tax assets, net of valuation allowance, will be realized. The amount of deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward periods are reduced or current tax planning strategies are not implemented. Our deferred tax assets at December 31, 2016 do not include the tax effect on $40.9 million of excess tax benefits from employee stock plan exercises. Common stock will be increased by approximately $15 million when such excess tax benefits reduce cash taxes payable. See Note 1 for further discussion regarding the impact of adopting ASU 2016-09. We do not provide U.S. deferred taxes on temporary differences related to our foreign investments that are considered permanent in duration. These temporary differences consist primarily of undistributed foreign earnings of $4.9 million and $8.7 million at December 31, 2016 and 2015, respectively. Foreign taxes have been provided on these undistributed foreign earnings. We have not computed the unrecognized deferred income tax liability on these temporary differences. There are many assumptions that must be considered to calculate the liability, thereby making it impractical to compute at this time. We are subject to income tax in the United States and numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of tax audits. The provision for income taxes includes the impact of reserve positions and changes to reserves that are considered appropriate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| (in thousands)
Unrecognized tax benefits at January 1, 2014 | $ | 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 |
Gross increase to positions in prior years | 6,461 |
Gross decrease to positions in prior years | (2,512 | )
Gross increases to current period tax positions | 25,741 |
Audit settlements | — |
Decrease related to lapsing of statute of limitations | (908 | )
Effect of change in exchange rates | (2,048 | )
Unrecognized tax benefits at December 31, 2015 | $ | 54,880 |
Gross increase to positions in prior years | 1,164 |
Gross decrease to positions in prior years | (612 | )
Gross increases to current period tax positions | 5,071 |
Audit settlements | (1,116 | )
Decrease related to lapsing of statute of limitations | (860 | )
Effect of change in exchange rates | (901 | )
Unrecognized tax benefits at December 31, 2016 | $ | 57,626 |
| At December 31,
| 2016 |  | 2015 |  | 2014
| (in thousands)
The amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate | $ | 56,411 |  |  | $ | 53,602 |  |  | $ | 26,980 |
If certain unrecognized tax benefits are recognized they would create additional deferred tax assets. These assets would require a full valuation in certain locations based upon present circumstances. 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 recognized is as follows:
| Year Ended December 31,
| 2016 |  | 2015 |  | 2014
| (in thousands)
Net interest and penalties expense | $ | 193 |  |  | $ | 880 |  |  | $ | 469 |
| At December 31,
| 2016 |  | 2015
| (in thousands)
Accrued interest | $ | 2,473 |  |  | $ | 2,105 |
Accrued penalties | 2,329 |  |  | 2,577 |
At December 31, 2016, we are under examination by certain tax authorities for the 2000 to 2015 tax years. The material jurisdictions where we are subject to examination for the 2000 to 2015 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. In December 2016, we filed a formal protest letter with the Internal Revenue Service requesting an Appeals hearing regarding the 2011-2013 tax audit assessment received earlier this year relating to research and development tax credits. 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 cash flows. 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 recognized 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 2010
Brazil |  | Subsequent to 2010
United Kingdom |  | Subsequent to 2012
Italy |  | Subsequent to 2007

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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 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: 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=65882285&loc=d3e32559-109319 Reference 3: 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=65882285&loc=d3e32718-109319 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=65882285&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=65882285&loc=d3e32537-109319 + Details
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