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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Tax Provision | The following table summarizes the provision (benefit) for U.S. federal, state, and foreign taxes on income from continuing operations:
| Year Ended December 31,
| 2018 |  | 2017 |  | 2016
| (in thousands)
Current: |  |  |  |  |
Federal | $ | (7,695 | ) |  | $ | 7,679 |  |  | $ | 20,490 |
State and local | (362 | ) |  | 3,841 |  |  | 2,708 |
Foreign | 14,618 |  |  | 12,139 |  |  | 12,586 |
Total current | 6,561 |  |  | 23,659 |  |  | 35,784 |
Deferred: |  |  |  |  |
Federal | (17,463 | ) |  | 40,340 |  |  | 10,805 |
State and local | (4,492 | ) |  | (1,144 | ) |  | 1,160 |
Foreign | (22,906 | ) |  | 3,480 |  |  | (24,815 | )
Total deferred | (44,861 | ) |  | 42,676 |  |  | (12,850 | )
Change in valuation allowance | 25,730 |  |  | 7,991 |  |  | 26,640 |
Total provision (benefit) for income taxes | $ | (12,570 | ) |  | $ | 74,326 |  |  | $ | 49,574 |
Income Tax Rate Reconciliation | A reconciliation of income taxes at the U.S. federal statutory rate of 21% for 2018 and 35% for 2017 and 2016 to the consolidated actual tax rate is as follows:
| Year Ended December 31,
| 2018 |  | 2017 |  | 2016
| (in thousands)
Income (loss) before income taxes |  |  |  |  |
Domestic | $ | (50,463 | ) |  | $ | 220,342 |  |  | $ | 196,750 |
Foreign | (58,688 | ) |  | (85,767 | ) |  | (112,123 | )
Total income before income taxes | $ | (109,151 | ) |  | $ | 134,575 |  |  | $ | 84,627 |
Expected federal income tax provision | $ | (22,922 | ) |  | $ | 47,101 |  |  | $ | 29,619 |
Change in valuation allowance | 25,730 |  |  | 7,991 |  |  | 26,640 |
Stock-based compensation | (104 | ) |  | (1,225 | ) |  | 2,762 |
Foreign earnings | (15,799 | ) |  | (22,045 | ) |  | (12,584 | )
Tax credits | (10,502 | ) |  | (777 | ) |  | (7,471 | )
Uncertain tax positions, including interest and penalties | 7,727 |  |  | (7,637 | ) |  | 3,817 |
Change in tax rates | 335 |  |  | 41,125 |  |  | 67 |
State income tax provision (benefit), net of federal effect | (4,524 | ) |  | 4,986 |  |  | 2,806 |
U.S. tax provision on foreign earnings | 25 |  |  | 33 |  |  | 997 |
Domestic production activities deduction | — |  |  | (2,534 | ) |  | (2,424 | )
Local foreign taxes | 2,540 |  |  | 2,324 |  |  | 2,914 |
Transaction costs | 974 |  |  | 2,643 |  |  | — |
Other, net | 3,950 |  |  | 2,341 |  |  | 2,431 |
Total provision (benefit) from income taxes | $ | (12,570 | ) |  | $ | 74,326 |  |  | $ | 49,574 |
Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities consist of the following:
| At December 31,
| 2018 |  | 2017
| (in thousands)
Deferred tax assets |  |  |
Loss carryforwards(1) | $ | 370,120 |  |  | $ | 218,420 |
Tax credits(2) | 94,359 |  |  | 58,616 |
Accrued expenses | 43,213 |  |  | 23,752 |
Pension plan benefits expense | 18,086 |  |  | 18,262 |
Warranty reserves | 13,470 |  |  | 11,170 |
Depreciation and amortization | 5,709 |  |  | 5,736 |
Equity compensation | 5,390 |  |  | 5,352 |
Inventory valuation | 1,415 |  |  | 2,554 |
Deferred revenue | 9,062 |  |  | 2,431 |
Other deferred tax assets, net | 11,319 |  |  | 16,606 |
Total deferred tax assets | 572,143 |  |  | 362,899 |
Valuation allowance | (323,822 | ) |  | (285,784 | )
Total deferred tax assets, net of valuation allowance | 248,321 |  |  | 77,115 |
Deferred tax liabilities |  |  |
Depreciation and amortization | (178,358 | ) |  | (23,135 | )
Tax effect of accumulated translation | — |  |  | (303 | )
Other deferred tax liabilities, net | (6,676 | ) |  | (5,231 | )
Total deferred tax liabilities | (185,034 | ) |  | (28,669 | )
Net deferred tax assets | $ | 63,287 |  |  | $ | 48,446 |
(1) | For tax return purposes at December 31, 2018, we had U.S. federal loss carryforwards of $350.7 million which begin to expire in the year 2019. At December 31, 2018, we have net operating loss carryforwards in Luxembourg of $936.7 million, the majority of which 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, 2018, there was a valuation allowance of $323.8 million primarily associated with foreign loss carryforwards and foreign tax credit carryforwards (discussed below).
(2) For tax return purposes at December 31, 2018, we had: (1) U.S. general business credits of $31.2 million, which begin to expire in 2022; (2) U.S. alternative minimum tax credits of $1.6 million that can be carried forward indefinitely; (3) U.S. foreign tax credits of $50.4 million, which begin to expire in 2024; and (4) state tax credits of $35.1 million, which begin to expire in 2019.
Summary of Valuation Allowance | Changes in the valuation allowance for deferred tax assets are summarized as follows:
Description |  | Balance at Beginning of Period |  | Other Adjustments |  | Additions Charged to Costs and Expenses |  | Balance at End of Period, Noncurrent
|  | (in thousands)
Year ended December 31, 2018: |  |  |  |  |  |  |  |
Deferred tax assets valuation allowance |  | $ | 285,784 |  |  | $ | 12,308 |  |  | $ | 25,730 |  |  | $ | 323,822 |
Year ended December 31, 2017: |  |  |  |  |  |  |  |
Deferred tax assets valuation allowance |  | $ | 249,560 |  |  | $ | 28,233 |  |  | $ | 7,991 |  |  | $ | 285,784 |
Year ended December 31, 2016: |  |  |  |  |  |  |  |
Deferred tax assets valuation allowance |  | $ | 235,339 |  |  | $ | (12,419 | ) |  | $ | 26,640 |  |  | $ | 249,560 |
Unrecognized Tax Benefits Related To Uncertain Tax Positions | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| Total
| (in thousands)
Unrecognized tax benefits at January 1, 2016 | $ | 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 |
Gross increase to positions in prior years | 3,367 |
Gross decrease to positions in prior years | (5,559 | )
Gross increases to current period tax positions | 6,453 |
Audit settlements | (5,169 | )
Decrease related to lapsing of statute of limitations | (3,445 | )
Effect of change in exchange rates | 3,429 |
Unrecognized tax benefits at December 31, 2017 | $ | 56,702 |
Gross increase to positions in prior years | 22,943 |
Gross decrease to positions in prior years | (24,949 | )
Gross increases to current period tax positions | 63,869 |
Audit settlements | (2,977 | )
Decrease related to lapsing of statute of limitations | (1,368 | )
Effect of change in exchange rates | (1,662 | )
Unrecognized tax benefits at December 31, 2018 | $ | 112,558 |
| At December 31,
| 2018 |  | 2017 |  | 2016
| (in thousands)
The amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate | $ | 111,224 |  |  | $ | 55,312 |  |  | $ | 56,411 |
If certain unrecognized tax benefits are recognized they would create additional deferred tax assets. These assets would require a full valuation allowance 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,
| 2018 |  | 2017 |  | 2016
| (in thousands)
Net interest and penalties expense (benefit) | $ | (990 | ) |  | $ | (543 | ) |  | $ | 193 |
| At December 31,
| 2018 |  | 2017
| (in thousands)
Accrued interest | $ | 2,127 |  |  | $ | 2,706 |
Accrued penalties | 1,758 |  |  | 2,426 |
At December 31, 2018, we are under examination by certain tax authorities for the 2010 to 2017 tax years. The material jurisdictions where we are subject to examination for the 2010 to 2017 tax years include, among others, the U.S., France, Germany, Italy, Brazil and the United Kingdom. During December 2018 we settled our tax audit with the Internal Revenue Service for the 2014-2015 years and we settled our tax audit with Germany for the 2011-2013 years. 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 2001
France |  | Subsequent to 2012
Germany |  | Subsequent to 2013
Brazil |  | Subsequent to 2012
United Kingdom |  | Subsequent to 2013
Italy |  | Subsequent to 2013

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- Definition 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. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32639-109319 + Details
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