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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2019
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, |  |  |  |
In thousands | 2019 |  | 2018 |  | 2017
Current: |  |  |  |  |
Federal | $ | 4,859 |  |  | $ | (7,695) |  |  | $ | 7,679 |
State and local | 2,179 |  |  | (362) |  |  | 3,841 |
Foreign | 13,771 |  |  | 14,618 |  |  | 12,139 |
Total current | 20,809 |  |  | 6,561 |  |  | 23,659 |
Deferred: |  |  |  |  |
Federal | 2,334 |  |  | (17,463) |  |  | 40,340 |
State and local | (1,846) |  |  | (4,492) |  |  | (1,144) |
Foreign | (6,033) |  |  | (22,906) |  |  | 3,480 |
Total deferred | (5,545) |  |  | (44,861) |  |  | 42,676 |
Change in valuation allowance | 5,353 |  |  | 25,730 |  |  | 7,991 |
Total provision (benefit) for income taxes | $ | 20,617 |  |  | $ | (12,570) |  |  | $ | 74,326 |
Income Tax Rate Reconciliation | A reconciliation of income taxes at the U.S. federal statutory rate of 21% for 2019 and 2018 and 35% for 2017 to the consolidated actual tax rate is as follows:
| Year Ended December 31, |  |  |  |
In thousands | 2019 |  | 2018 |  | 2017
Income (loss) before income taxes |  |  |  |  |
Domestic | $ | 57,261 |  |  | $ | (50,463) |  |  | $ | 220,342 |
Foreign | 15,771 |  |  | (58,688) |  |  | (85,767) |
Total income before income taxes | $ | 73,032 |  |  | $ | (109,151) |  |  | $ | 134,575 |
Expected federal income tax provision | $ | 15,337 |  |  | $ | (22,922) |  |  | $ | 47,101 |
Change in valuation allowance | 5,353 |  |  | 25,730 |  |  | 7,991 |
Stock-based compensation | (2,130) |  |  | (104) |  |  | (1,225) |
Foreign earnings | (15,610) |  |  | (15,799) |  |  | (22,045) |
Tax credits | (8,794) |  |  | (10,502) |  |  | (777) |
Uncertain tax positions, including interest and penalties | 13,060 |  |  | 7,727 |  |  | (7,637) |
Change in tax rates | 4,999 |  |  | 335 |  |  | 41,125 |
State income tax provision (benefit), net of federal effect | 2,805 |  |  | (4,524) |  |  | 4,986 |
U.S. tax provision on foreign earnings | 129 |  |  | 25 |  |  | 33 |
Domestic production activities deduction | — |  |  | — |  |  | (2,534) |
Local foreign taxes | 1,471 |  |  | 2,540 |  |  | 2,324 |
Transaction costs | — |  |  | 974 |  |  | 2,643 |
Other, net | 3,997 |  |  | 3,950 |  |  | 2,341 |
Total provision (benefit) from income taxes | $ | 20,617 |  |  | $ | (12,570) |  |  | $ | 74,326 |
Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities consist of the following:
| December 31, |  |
In thousands | 2019 |  | 2018
Deferred tax assets |  |  |
Loss carryforwards(1) | $ | 343,614 |  |  | $ | 370,120 |
Tax credits(2) | 98,098 |  |  | 94,359 |
Accrued expenses | 46,846 |  |  | 43,213 |
Pension plan benefits expense | 17,310 |  |  | 18,086 |
Warranty reserves | 12,961 |  |  | 13,470 |
Depreciation and amortization | 6,112 |  |  | 5,709 |
Equity compensation | 4,685 |  |  | 5,390 |
Inventory valuation | 1,069 |  |  | 1,415 |
Deferred revenue | 8,951 |  |  | 9,062 |
Leases | 13,876 |  |  | — |
Other deferred tax assets, net | 9,777 |  |  | 11,319 |
Total deferred tax assets | 563,299 |  |  | 572,143 |
Valuation allowance | (320,649) |  |  | (323,822) |
Total deferred tax assets, net of valuation allowance | 242,650 |  |  | 248,321 |
Deferred tax liabilities |  |  |
Depreciation and amortization | (161,044) |  |  | (178,358) |
Leases | (12,976) |  |  | — |
Other deferred tax liabilities, net | (6,540) |  |  | (6,676) |
Total deferred tax liabilities | (180,560) |  |  | (185,034) |
Net deferred tax assets | $ | 62,090 |  |  | $ | 63,287 |
(1)For tax return purposes at December 31, 2019, we had U.S. federal loss carryforwards of $187.5 million, which begin to expire in the year 2020. At December 31, 2019, we have net operating loss carryforwards in Luxembourg of $992.7 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, 2019, there was a valuation allowance of $320.6 million primarily associated with foreign loss carryforwards and foreign tax credit carryforwards (discussed below). (2)For tax return purposes at December 31, 2019, we had: (1) U.S. general business credits of $39.0 million, which begin to expire in 2022; (2) U.S. alternative minimum tax credits of $0.8 million that can be carried forward indefinitely; (3) U.S. foreign tax credits of $50.5 million, which begin to expire in 2024; and (4) state tax credits of $34.4 million, which begin to expire in 2020.
Summary of Valuation Allowance | Changes in the valuation allowance for deferred tax assets are summarized as follows:
| Year Ended December 31, |  |  |  |
In thousands | 2019 |  | 2018 |  | 2017
Balance at beginning of period | $ | 323,822 |  |  | $ | 285,784 |  |  | $ | 249,560 |
Other adjustments | (8,526) |  |  | 12,308 |  |  | 28,233 |
Additions charged to costs and expenses | 5,353 |  |  | 25,730 |  |  | 7,991 |
Balance at end of period, noncurrent | $ | 320,649 |  |  | $ | 323,822 |  |  | $ | 285,784 |
Unrecognized Tax Benefits Related To Uncertain Tax Positions | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
In thousands | Total |
Unrecognized tax benefits at January 1, 2017 | $ | 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 |
Gross increase to positions in prior years | 1,067 |
Gross decrease to positions in prior years | (3,296) |
Gross increases to current period tax positions | 13,762 |
Audit settlements | — |
Decrease related to lapsing of statute of limitations | (1,574) |
Effect of change in exchange rates | (802) |
Unrecognized tax benefits at December 31, 2019 | $ | 121,715 |
| At December 31, |  |  |  |
In thousands | 2019 |  | 2018 |  | 2017
The amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate | $ | 120,410 |  |  | $ | 111,224 |  |  | $ | 55,312 |
The net interest and penalties expense recognized is as follows:
| Year Ended December 31, |  |  |  |
In thousands | 2019 |  | 2018 |  | 2017
Net interest and penalties expense (benefit) | $ | 708 |  |  | $ | (990) |  |  | $ | (543) |
| At December 31, |  |
In thousands | 2019 |  | 2018
Accrued interest | $ | 2,849 |  |  | $ | 2,127 |
Accrued penalties | 1,681 |  |  | 1,758 |
We file income tax returns in various 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 2013
United Kingdom |  | Subsequent to 2015
Italy |  | Subsequent to 2014

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