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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Taxes [Abstract] |
Income Taxes | Note 5 – Income Taxes Income (loss) from continuing operations before taxes and noncontrolling interests consists of the following components:
|  | Years ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Domestic |  | $ | (50,106 | ) |  | $ | (26,065 | ) |  | $ | (15,995 | )
Foreign |  |  | 217,249 |  |  |  | 202,470 |  |  |  | 186,032 |
|  | $ | 167,143 |  |  | $ | 176,405 |  |  | $ | 170,037 |
Significant components of income taxes are as follows:
|  | Years ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | (27,031 | ) |  | $ | (603 | ) |  | $ | 8,409 |
State and local |  |  | 386 |  |  |  | 280 |  |  |  | 574 |
Foreign |  |  | 60,282 |  |  |  | 51,225 |  |  |  | 44,351 |
|  |  | 33,637 |  |  |  | 50,902 |  |  |  | 53,334 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 7,999 |  |  |  | 2,215 |  |  |  | (8,557 | )
State and local |  |  | 204 |  |  |  | 92 |  |  |  | (240 | )
Foreign |  |  | 7,460 |  |  |  | (573 | ) |  |  | 1,969 |
|  |  | 15,663 |  |  |  | 1,734 |  |  |  | (6,828 | )
Total income tax expense |  | $ | 49,300 |  |  | $ | 52,636 |  |  | $ | 46,506 |
Note 5 – Income Taxes (continued) Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows:
|  | December 31, |
|  | 2014 |  |  | 2013 |
Deferred tax assets: |  |  |  |  |  |
Pension and other retiree obligations |  | $ | 43,393 |  |  | $ | 34,343 |
Inventories |  |  | 8,013 |  |  |  | 8,759 |
Net operating loss carryforwards |  |  | 198,677 |  |  |  | 182,691 |
Tax credit carryforwards |  |  | 25,046 |  |  |  | 20,780 |
Other accruals and reserves |  |  | 32,376 |  |  |  | 31,469 |
Total gross deferred tax assets |  |  | 307,505 |  |  |  | 278,042 |
Less valuation allowance |  |  | (186,614 | ) |  |  | (183,289 | )
|  |  | 120,891 |  |  |  | 94,753 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Tax over book depreciation |  |  | (10,257 | ) |  |  | (10,652 | )
Intangible assets other than goodwill |  |  | (20,507 | ) |  |  | (1,539 | )
Earnings not permanently reinvested |  |  | (25,334 | ) |  |  | (1,652 | )
Convertible debentures |  |  | (175,935 | ) |  |  | (162,371 | )
Other - net |  |  | (3,590 | ) |  |  | (2,741 | )
Total gross deferred tax liabilities |  |  | (235,623 | ) |  |  | (178,955 | )
Net deferred tax assets (liabilities) |  | $ | (114,732 | ) |  | $ | (84,202 | )
The Company makes significant judgments regarding the realizability of its deferred tax assets (principally net operating losses). The carrying value of deferred tax assets is based on the Company's assessment that it is more likely than not that the Company will realize these assets after consideration of all available positive and negative evidence. A reconciliation of income tax expense at the U.S. federal statutory income tax rate to actual income tax provision is as follows:
|  | Years ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Tax at statutory rate |  | $ | 58,500 |  |  | $ | 61,742 |  |  | $ | 59,513 |
State income taxes, net of U.S. federal tax benefit |  |  | 384 |  |  |  | 242 |  |  |  | 217 |
Effect of foreign operations |  |  | (27,372 | ) |  |  | (18,696 | ) |  |  | (19,083 | )
Tax on earnings not permanently reinvested |  |  | 25,728 |  |  |  | - |  |  |  | - |
Unrecognized tax benefits |  |  | (21,603 | ) |  |  | 2,862 |  |  |  | 6,626 |
Change in valuation allowance on non-U.S. deferred tax assets |  |  | - |  |  |  | (285 | ) |  |  | (4,036 | )
Foreign income taxable in the U.S. |  |  | 13,499 |  |  |  | 11,961 |  |  |  | 7,476 |
U.S. foreign tax credits |  |  | - |  |  |  | - |  |  |  | (4,257 | )
Effect of statutory rate changes on deferred tax assets |  |  | 226 |  |  |  | (2,867 | ) |  |  | - |
Other |  |  | (62 | ) |  |  | (2,323 | ) |  |  | 50 |
Total income tax expense |  | $ | 49,300 |  |  | $ | 52,636 |  |  | $ | 46,506 |
Note 5 – Income Taxes (continued) Income tax expense for the years ended December 31, 2014, 2013, and 2012 include certain discrete tax items for changes in uncertain tax positions, valuation allowances, tax rates, and other related items. These items total $1,228 (tax benefit), $4,197 (tax benefit), and $4,036 (tax benefit) in 2014, 2013, and 2012, respectively. For the year ended December 31, 2014, the discrete items include a $1,228 benefit recorded in the fourth fiscal quarter due to the enactment of The Tax Increase Prevention Act of 2014. The discrete items also include benefits upon the completion of certain tax examinations and lapses in the statute of limitations, offset by additional tax expenses for expected repatriation of cash and profits of non-U.S. subsidiaries to the United States, primarily to repay amounts borrowed on the revolving credit facility to provide future flexibility given the legal entity and the financial structure utilized for the Capella acquisition. The latter two items netted to an immaterial amount. For the year ended December 31, 2013, the discrete items include a $2,867 benefit recorded in the third fiscal quarter due to a new tax law enacted in Israel in July 2013 which effectively increases the corporate income tax rate on certain types of income earned after January 1, 2014, and, therefore, increases the deferred tax assets, and a $1,330 benefit recorded in the first fiscal quarter due to the retroactive enactment of the American Taxpayer Relief Act of 2012, signed into law on January 2, 2013. For the year ended December 31, 2012, the discrete item is the reduction of a valuation allowance on a deferred tax asset in Israel due to a merger of several of the Company's wholly-owned subsidiaries in Israel in the fourth fiscal quarter which will allow for the realization of these tax benefits that likely otherwise would have been forgone. At December 31, 2014, the Company had the following significant net operating loss carryforwards for tax purposes:
|  |  |  |  | Expires |
Austria |  | $ | 14,515 |  |  | No expiration |
Belgium |  |  | 173,541 |  |  | No expiration |
Brazil |  |  | 14,876 |  |  | No expiration |
Germany |  |  | 42,968 |  |  | No expiration |
Israel |  |  | 62,528 |  |  | No expiration |
Netherlands |  |  | 23,411 |  |  |  | 2015 - 2023 |
United States |  |  | 78,784 |  |  |  | 2033 - 2034 |
California |  |  | 53,979 |  |  |  | 2016 - 2034 |
Pennsylvania |  |  | 736,159 |  |  |  | 2018 - 2034 |
Approximately $64,232 of the carryforwards in Belgium resulted from the Company's acquisition of BCcomponents in 2002. Valuation allowances of $21,833 and $24,788, as of December 31, 2014 and 2013, respectively, have been recorded through goodwill for these acquired net operating losses. Prior to the adoption of updated guidance in ASC Topic 805 on January 1, 2009, if tax benefits were recognized through the utilization of these acquired net operating losses, the benefits of such loss utilization were recorded as a reduction to goodwill. After the adoption of the updated guidance on January 1, 2009, the benefits of such losses are recorded as a reduction of tax expense. At December 31, 2014, the Company had the following significant tax credit carryforwards available:
|  |  |  |  | Expires |
U.S. Foreign Tax Credit |  | $ | 11,093 |  |  |  | 2020 - 2022 |
California Research Credit |  |  | 10,926 |  |  | No expiration |
Note 5 – Income Taxes (continued) At December 31, 2014, no provision has been made for U.S. federal and state income taxes on approximately $2,686,284 of foreign earnings. Substantially all earnings generated by non-U.S. subsidiaries prior to 2014, and cash generated in 2014 which is not funding the dividend program or the Capella acquisition (as discussed below), are deemed to be reinvested outside of the United States indefinitely. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to U.S. income taxes (subject to an adjustment for foreign tax credits), state income taxes, incremental foreign income taxes, and withholding taxes payable to various foreign countries. Determination of the amount of unrecognized deferred U.S. income tax liability is not practicable because of the complexities associated with its hypothetical calculation. In 2008, the Company recorded additional tax expense for an expected repatriation of $112,500 because such earnings were not deemed to be indefinitely reinvested outside of the United States. During 2012 and 2014, the Company repatriated $72,100 and $4,588 of cash, respectively, which completed the repatriation program initiated in 2008. This repatriated cash was used to reduce the amount outstanding under the Company's revolving credit facility. During 2014, the Company borrowed $53,000 on its revolving credit facility to achieve future flexibility given the legal entity and the financial structure utilized for the Capella acquisition (see Note 2). Subsequent to the acquisition of the noncontrolling interest in Capella on December 31, 2014, the Company expects to repatriate cash from the current earnings of non-U.S. subsidiaries to the United States primarily to repay those borrowings on the revolving credit facility, and also to realign the acquired entity structure to have Capella's U.S. subsidiary directly owned by Vishay Intertechnology, Inc. The tax provision for the year ended December 31, 2014 includes all U.S. federal and state income taxes, incremental foreign income taxes, and withholding taxes payable related to that anticipated repatriation transaction. The Company expects to fund the quarterly dividend program initiated in February 2014, by, at least in part, repatriating current year income of certain non-U.S. subsidiaries and providing appropriate U.S. federal and state income taxes, incremental foreign income taxes, and withholding taxes payable on that current period non-U.S. income. Net income taxes paid were $62,051, $44,757, and $46,611 for the years ended December 31, 2014, 2013, and 2012, respectively. See Note 19 for a discussion of the tax-related uncertainties for the pre-spin-off period of Vishay Precision Group, Inc. ("VPG"), which was spun off on July 6, 2010. Note 5 – Income Taxes (continued) The following table summarizes changes in the liabilities associated with unrecognized tax benefits:
|  | Years ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Balance at beginning of year |  | $ | 45,877 |  |  | $ | 51,771 |  |  | $ | 48,152 |
Addition based on tax positions related to the current year |  |  | 1,641 |  |  |  | - |  |  |  | 665 |
Addition based on tax positions related to prior years |  |  | 6,484 |  |  |  | 4,015 |  |  |  | 3,498 |
Currency translation adjustments |  |  | (1,387 | ) |  |  | 310 |  |  |  | (215 | )
Reduction based on tax positions related to prior years |  |  | - |  |  |  | (2,054 | ) |  |  | - |
Reduction for settlements |  |  | (3,556 | ) |  |  | (7,316 | ) |  |  | (329 | )
Reduction for lapses of statute of limitation |  |  | (22,476 | ) |  |  | (849 | ) |  |  | - |
Balance at end of year |  | $ | 26,583 |  |  | $ | 45,877 |  |  | $ | 51,771 |
All of the unrecognized tax benefits of $26,583 and $45,877, as of December 31, 2014 and 2013, respectively, would reduce the effective tax rate if recognized. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. At December 31, 2014 and 2013, the Company had accrued interest and penalties related to the unrecognized tax benefits of $3,104 and $7,766, respectively. During the years ended December 31, 2014, 2013, and 2012, the Company recognized $1,839, $2,218, and $2,833, respectively, in interest and penalties. The Company and its subsidiaries file U.S. federal income tax returns, as well as tax returns in multiple state and foreign jurisdictions. During the years ended December 31, 2014 and 2013, certain tax examinations were completed and certain statutes of limitations lapsed. The tax provision for those years includes adjustments related to the resolution of these matters, as reflected in the table above. In 2014, the U.S. Internal Revenue Service concluded its examination of Vishay's U.S. federal tax returns through the 2011 tax year. The tax returns of other non-U.S. subsidiaries which are currently under examination include France (2012 and 2013), Germany (2009 through 2012), India (2004 through 2012), Israel (2009 through 2012), and the Republic of China (Taiwan) (2012). The Company and its subsidiaries also file income tax returns in other taxing jurisdictions in the U.S. and around the world, many of which are still open to examinations. The timing of the resolution of income tax examinations is highly uncertain, as are the amounts and timing of tax payments that result from such examinations. These events could cause large fluctuations in the balance sheet classification of current and non-current unrecognized tax benefits. The Company believes that in the next 12 months it is reasonably possible that certain income tax examinations will conclude or the statutes of limitation on certain income tax periods open to examination will expire, or both. Given the uncertainties described above, the Company can only determine an estimate of potential decreases in unrecognized tax benefits ranging from $2,400 to $2,700.

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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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