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Income Taxes | 12 Months Ended
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Dec. 31, 2013
Income Tax Disclosure [Abstract] |
Income Taxes | (7) Income Taxes A summary of consolidated income before provision (benefit) for income taxes and equity in net income of affiliates and the components of provision (benefit) for income taxes is shown below (in millions):
For the year ended December 31, |  | 2013 |  |  | 2012 |  |  | 2011 |
Consolidated income before provision (benefit) for income taxes and equity in net income of affiliates: |  |  |  |  |  |  |  |  |  |  |  |
Domestic |  | $ | 218.5 |  |  | $ | 289.3 |  |  | $ | 257.4 |
Foreign |  |  | 391.6 |  |  |  | 359.6 |  |  |  | 358.3 |
|  | $ | 610.1 |  |  | $ | 648.9 |  |  | $ | 615.7 |
Domestic provision (benefit) for income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Current provision (benefit) |  | $ | 16.8 |  |  | $ | (4.1 | ) |  | $ | 17.6 |
Deferred provision (benefit) |  |  | 64.9 |  |  |  | (720.8 | ) |  |  | 4.6 |
Total domestic provision (benefit) |  |  | 81.7 |  |  |  | (724.9 | ) |  |  | 22.2 |
Foreign provision for income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Current provision |  |  | 130.5 |  |  |  | 59.8 |  |  |  | 100.6 |
Deferred provision (benefit) |  |  | (19.5 | ) |  |  | 27.1 |  |  |  | (54.0 | )
Total foreign provision |  |  | 111.0 |  |  |  | 86.9 |  |  |  | 46.6 |
Provision (benefit) for income taxes |  | $ | 192.7 |  |  | $ | (638.0 | ) |  | $ | 68.8 |
The domestic provision (benefit) includes withholding taxes related to dividends and royalties paid by the Company’s foreign subsidiaries, as well as state and local taxes. In 2012, the domestic benefit includes a tax benefit of $24.2 million related to certain transfer pricing items that are now recognized as a result of the release of the Company’s U.S. valuation allowance. The domestic deferred provision (benefit) includes the benefit of prior unrecognized net operating loss carryforwards of $104.8 million and $87.8 million for the years ended December 31, 2012 and 2011, respectively. The foreign deferred provision (benefit) includes the benefit of prior unrecognized net operating loss carryforwards of $4.1 million, $4.6 million and $14.8 million for the years ended December 31, 2013, 2012 and 2011, respectively. A summary of the differences between the provision (benefit) for income taxes calculated at the United States federal statutory income tax rate of 35% and the consolidated provision (benefit) for income taxes is shown below (in millions):
For the year ended December 31, |  | 2013 |  |  | 2012 |  |  | 2011 |
Consolidated income before provision (benefit) for income taxes and equity in net income of affiliates multiplied by the United States federal statutory income tax rate |  | $ | 213.5 |  |  | $ | 227.1 |  |  | $ | 215.5 |
Differences in income taxes on foreign earnings, losses and remittances |  |  | (38.7 | ) |  |  | 1.8 |  |  |  | (37.4 | )
Valuation allowance adjustments |  |  | 0.2 |  |  |  | (764.5 | ) |  |  | (60.8 | )
Tax credits |  |  | (16.4 | ) |  |  | (43.5 | ) |  |  | (30.7 | )
Tax audits and assessments |  |  | 2.7 |  |  |  | (48.7 | ) |  |  | 17.6 |
Increase in tax loss carryforwards (1) |  |  | — |  |  |  | — |  |  |  | (22.4 | )
Increase in valuation allowance related to tax loss carryforwards (1) |  |  | — |  |  |  | — |  |  |  | 22.4 |
Other |  |  | 31.4 |  |  |  | (10.2 | ) |  |  | (35.4 | )
Provision (benefit) for income taxes |  | $ | 192.7 |  |  | $ | (638.0 | ) |  | $ | 68.8 |
(1) | Represents the increase in tax loss carryforwards resulting from an international restructuring transaction, which is subject to a full valuation allowance as it is not more likely than not that the deferred tax assets will be realized.
Internal Revenue Code of 1986, as amended (“IRC”), Sections 382 and 383 provide an annual limitation with respect to the ability of a corporation to utilize its U.S. net operating loss, capital loss and tax credit carryforwards (collectively, the “Tax Attributes”), as well as certain built-in-losses, against future U.S. taxable income in the event of a change in ownership. The Company’s emergence from Chapter 11 bankruptcy proceedings is considered a change in ownership for purposes of IRC Section 382. The limitation under the IRC is based on the value of the corporation as of the emergence date. As a result, the Company’s future U.S. taxable income may not be fully offset by the Tax Attributes if such income exceeds its annual limitation, and the Company may incur a tax liability with respect to such income. In addition, subsequent changes in ownership for purposes of the IRC could further limit the Company’s ability to use its Tax Attributes. For the years ended December 31, 2013, 2012 and 2011, income in foreign jurisdictions with tax holidays was $73.7 million, $99.2 million and $115.8 million, respectively. Such tax holidays generally expire from 2014 through 2025. Deferred income taxes represent temporary differences in the recognition of certain items for financial reporting and income tax purposes. A summary of the components of the net deferred income tax asset is shown below (in millions):
December 31, |  | 2013 |  |  | 2012 |
Deferred income tax assets: |  |  |  |  |  |  |  |
Tax loss carryforwards |  | $ | 690.5 |  |  | $ | 708.3 |
Tax credit carryforwards |  |  | 437.2 |  |  |  | 412.8 |
Retirement benefit plans |  |  | 74.3 |  |  |  | 156.6 |
Accrued liabilities |  |  | 133.9 |  |  |  | 115.8 |
Self-insurance reserves |  |  | 9.5 |  |  |  | 11.3 |
Current asset basis differences |  |  | 38.8 |  |  |  | 30.3 |
Long-term asset basis differences |  |  | (64.5 | ) |  |  | (18.0 | )
Deferred compensation |  |  | 40.9 |  |  |  | 33.7 |
Recoverable customer engineering, development and tooling |  |  | (22.2 | ) |  |  | (11.4 | )
Undistributed earnings of foreign subsidiaries |  |  | (54.3 | ) |  |  | (53.8 | )
Derivative instruments and hedging |  |  | (1.6 | ) |  |  | (7.0 | )
Other |  |  | (0.8 | ) |  |  | (0.7 | )
|  |  | 1,281.7 |  |  |  | 1,377.9 |
Valuation allowance |  |  | (642.6 | ) |  |  | (628.2 | )
Net deferred income tax asset |  | $ | 639.1 |  |  | $ | 749.7 |
As of December 31, 2013 and 2012, the valuation allowance with respect to the Company’s deferred tax assets was $642.6 million and $628.2 million, respectively, a net increase of $14.4 million. Concluding that a valuation allowance is not required is difficult when there is significant negative evidence, such as cumulative losses in recent years, which is objective and verifiable. When measuring cumulative losses in recent years, the Company uses a rolling three year period of pretax book income, adjusted for permanent differences between book and taxable income and certain other items. The Company was profitable in the United States in 2012 but remained in a cumulative loss position through the third quarter of 2012. As of December 31, 2012, the Company was no longer in a cumulative loss position. Based on three years of profitability in the United States, as well as a forecast of taxable income in the United States in 2013 and future years, management concluded that it was more likely than not that its net deferred tax assets would be realized. As a result, substantially all of the valuation allowance that had been provided with respect to the net deferred tax assets in the United States was reversed in the fourth quarter of 2012. As of December 31, 2013, the Company continues to maintain a valuation allowance of $36.0 million with respect to certain U.S. deferred tax assets that, due to their nature, are not likely to be realized. In addition, the Company continues to maintain a valuation allowance of $606.6 million with respect to its deferred tax assets in several international jurisdictions. The classification of the net deferred income tax asset is shown below (in millions):
December 31, |  | 2013 |  |  | 2012 |
Deferred income tax assets: |  |  |  |  |  |  |  |
Current |  | $ | 187.4 |  |  | $ | 166.0 |
Long-term |  |  | 535.9 |  |  |  | 675.6 |
Deferred income tax liabilities: |  |  |  |  |  |  |  |
Current |  |  | (23.1 | ) |  |  | (19.1 | )
Long-term |  |  | (61.1 | ) |  |  | (72.8 | )
Net deferred income tax asset |  | $ | 639.1 |  |  | $ | 749.7 |
Deferred income taxes have not been provided on $948.0 million of certain undistributed earnings of the Company’s foreign subsidiaries as such amounts are considered to be permanently reinvested. It is not practicable to determine the unrecognized deferred tax liability on these earnings because the actual tax liability on these earnings, if any, is dependent on circumstances existing when remittance occurs. As of December 31, 2013, the Company had tax loss carryforwards of $2.3 billion. Of the total tax loss carryforwards, $1.7 billion has no expiration date, and $635.8 million expires between 2014 and 2033. In addition, the Company had tax credit carryforwards of $437.2 million comprised principally of U.S. foreign tax credits, research and development credits and investment tax credits that generally expire between 2014 and 2033. As of December 31, 2013, the deferred tax asset related to domestic net operating loss carryforwards is lower than the actual amount reported on the Company’s domestic tax returns by approximately $18.1 million. This difference is the result of tax deductions in excess of financial statement amounts for stock-based compensation. When these amounts are realized, the Company will record the tax benefit as an increase to additional paid in capital. As of December 31, 2013 and 2012, the Company’s gross unrecognized tax benefits were $45.2 million and $34.4 million (excluding interest and penalties), respectively, of which $31.9 million and $34.4 million, respectively, if recognized, would affect the Company’s effective tax rate. The gross unrecognized tax benefits are recorded in other long-term liabilities, with the exception of $0.6 million and $7.5 million (excluding interest and penalties), which is recorded in accrued liabilities, in the accompanying consolidated balance sheets as of December 31, 2013 and 2012, respectively. A summary of the changes in gross unrecognized tax benefits is shown below (in millions):
For the year ended December 31, |  | 2013 |  |  | 2012 |  |  | 2011 |
Balance at beginning of period |  | $ | 34.4 |  |  | $ | 49.4 |  |  | $ | 36.2 |
Additions based on tax positions related to current year |  |  | 5.0 |  |  |  | 5.2 |  |  |  | 13.8 |
Additions (reductions) based on tax positions related to prior years |  |  | 14.3 |  |  |  | (18.5 | ) |  |  | 4.4 |
Settlements |  |  | (6.7 | ) |  |  | — |  |  |  | — |
Statute expirations |  |  | (0.8 | ) |  |  | (1.8 | ) |  |  | (2.6 | )
Foreign currency translation |  |  | (1.0 | ) |  |  | 0.1 |  |  |  | (2.4 | )
Balance at end of period |  | $ | 45.2 |  |  | $ | 34.4 |  |  | $ | 49.4 |
The Company recognizes interest and penalties with respect to unrecognized tax benefits as income tax expense. As of December 31, 2013 and 2012, the Company had recorded gross reserves of $6.7 million and $6.2 million (excluding federal benefit where applicable), respectively, related to interest and penalties, of which $6.6 million and $4.4 million, respectively, if recognized, would affect the Company’s effective tax rate. For the years ended December 31, 2013, 2012 and 2011, the Company recorded net tax (benefit) expense (including federal benefit where applicable) related to changes in its reserves for interest and penalties of $2.4 million, ($4.1) million and $1.4 million, respectively. The Company operates in multiple jurisdictions throughout the world, and its tax returns are periodically audited or subject to review by both domestic and foreign tax authorities. During the next twelve months, it is reasonably possible that, as a result of audit settlements, the conclusion of current examinations and the expiration of the statute of limitations in multiple jurisdictions, the Company may decrease the amount of its gross unrecognized tax benefits by approximately $0.6 million, all of which, if recognized, would affect the Company’s effective tax rate. The gross unrecognized tax benefits subject to potential decrease involve issues related to transfer pricing and various other tax items in multiple jurisdictions. However, as a result of ongoing examinations, tax proceedings in certain countries, additions to the gross unrecognized tax benefits for positions taken and interest and penalties, if any, arising in 2014, it is not possible to estimate the potential net increase or decrease to the Company’s gross unrecognized tax benefits during the next twelve months. The Company considers its significant tax jurisdictions to include Brazil, Canada, China, Germany, Hungary, Italy, Mexico, Poland, Spain and the United States. The Company or its subsidiaries generally remain subject to income tax examination in certain U.S. state and local jurisdictions for years after 2008. Further, the Company or its subsidiaries remain subject to income tax examination in Mexico and Spain for years after 2005, in Brazil, Hungary and Poland for years after 2007, in Canada and Italy generally for years after 2008, in China and Germany for years after 2009 and in the United States generally for years after 2012. Legislation In January 2013, the American Taxpayer Relief Act of 2012 was enacted, which retroactively reinstated and extended various tax provisions applicable to the Company, including the Research & Development Tax Credit. In 2013, the Company recognized a tax benefit of $3.4 million, which reduced the Company’s effective tax rate.

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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=26873400&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 + Details
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