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Income Taxes | 12 Months Ended
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Dec. 31, 2016
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, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Domestic |  | $ | (135,953 | ) |  | $ | (40,929 | ) |  | $ | (50,106 | )
Foreign |  |  | 230,169 |  |  |  | 115,669 |  |  |  | 217,249 |
|  | $ | 94,216 |  |  | $ | 74,740 |  |  | $ | 167,143 |
Significant components of income taxes are as follows:
|  | Years ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 358 |  |  | $ | 290 |  |  | $ | (27,031 | )
State and local |  |  | 5 |  |  |  | 163 |  |  |  | 386 |
Foreign |  |  | 46,999 |  |  |  | 63,573 |  |  |  | 60,282 |
|  |  | 47,362 |  |  |  | 64,026 |  |  |  | 33,637 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 6,163 |  |  |  | 78,933 |  |  |  | 7,999 |
State and local |  |  | (3,039 | ) |  |  | 311 |  |  |  | 204 |
Foreign |  |  | (5,643 | ) |  |  | 39,203 |  |  |  | 7,460 |
|  |  | (2,519 | ) |  |  | 118,447 |  |  |  | 15,663 |
Total income tax expense |  | $ | 44,843 |  |  | $ | 182,473 |  |  | $ | 49,300 |
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, |
|  | 2016 |  |  | 2015 |
Deferred tax assets: |  |  |  |  |  |
Pension and other retiree obligations |  | $ | 47,104 |  |  | $ | 40,322 |
Inventories |  |  | 7,691 |  |  |  | 7,848 |
Net operating loss carryforwards |  |  | 183,562 |  |  |  | 183,298 |
Tax credit carryforwards |  |  | 25,432 |  |  |  | 23,512 |
Other accruals and reserves |  |  | 29,401 |  |  |  | 35,176 |
Total gross deferred tax assets |  |  | 293,190 |  |  |  | 290,156 |
Less valuation allowance |  |  | (165,269 | ) |  |  | (167,932 | )
|  |  | 127,921 |  |  |  | 122,224 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Tax over book depreciation |  |  | (1,025 | ) |  |  | (4,038 | )
Earnings not permanently reinvested |  |  | (139,165 | ) |  |  | (162,667 | )
Convertible debentures |  |  | (203,641 | ) |  |  | (188,978 | )
Other - net |  |  | (10,646 | ) |  |  | (9,245 | )
Total gross deferred tax liabilities |  |  | (354,477 | ) |  |  | (364,928 | )
Net deferred tax assets (liabilities) |  | $ | (226,556 | ) |  | $ | (242,704 | )
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, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Tax at statutory rate |  | $ | 32,976 |  |  | $ | 26,159 |  |  | $ | 58,500 |
State income taxes, net of U.S. federal tax benefit |  |  | (1,972 | ) |  |  | 309 |  |  |  | 384 |
Effect of foreign operations |  |  | (26,551 | ) |  |  | (13,212 | ) |  |  | (27,372 | )
Tax on earnings not permanently reinvested |  |  | (3,553 | ) |  |  | 163,699 |  |  |  | 25,728 |
Unrecognized tax benefits |  |  | (8,453 | ) |  |  | (1,353 | ) |  |  | (21,603 | )
Change in valuation allowance on non-U.S. deferred tax assets |  |  | 991 |  |  |  | (8,888 | ) |  |  | - |
Foreign income taxable in the U.S. |  |  | 18,442 |  |  |  | 7,025 |  |  |  | 13,499 |
Termination of U.S. pension |  |  | 34,853 |  |  |  | - |  |  |  | - |
Tax effect of impairment charges |  |  | (454 | ) |  |  | 8,305 |  |  |  | - |
Other |  |  | (1,436 | ) |  |  | 429 |  |  |  | 164 |
Total income tax expense |  | $ | 44,843 |  |  | $ | 182,473 |  |  | $ | 49,300 |
Note 5 – Income Taxes (continued) Income tax expense for the years ended December 31, 2016, 2015, and 2014 includes certain discrete tax items for changes in uncertain tax positions, valuation allowances, tax rates, and other related items. These items total $22,596, $152,437, and $1,228 (tax benefit) in 2016, 2015, and 2014, respectively. For the year ended December 31, 2016, the discrete items include $34,853 of additional tax expense related to the termination and settlement of the Vishay Retirement Plan (see Notes 10 and 11), $8,704 (tax benefit) for changes in uncertain tax positions related largely to statute expiration, and $3,553 (tax benefit) for periodic remeasurement of the deferred tax liability related to the cash repatriation program described below. The cash repatriation program is expected to occur over several years, and the deferred tax liability is based on the available sources of cash, applicable tax rates, and other factors and circumstances, as of each respective balance sheet date. Changes in the underlying facts and circumstances result in changes in the deferred tax liability balance, which are recorded as tax benefit or expense. For the year ended December 31, 2015, the discrete items include $163,954 of expense recorded in the fourth fiscal quarter primarily to repatriate $300,000 of foreign earnings to the United States, following an evaluation of the Company's anticipated domestic cash needs over the next several years and the Company's most efficient use of liquidity, and with consideration of the amount of cash that can be repatriated to the U.S. efficiently with lesser withholding taxes in foreign jurisdictions. They also include $8,888 (tax benefit) for changes in valuation allowances and $2,629 (tax benefit) for changes in uncertain tax positions. For the year ended December 31, 2014, the discrete items included $25,706 of expense related to an 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, a $25,706 (tax benefit) for changes in uncertain tax positions, and a $1,228 (tax benefit) recorded in the fourth fiscal quarter due to the enactment of The Tax Increase Prevention Act of 2014. At December 31, 2016, the Company had the following significant net operating loss carryforwards for tax purposes:
|  |  |  |  | Expires |
Austria |  | $ | 14,862 |  |  | No expiration |
Belgium |  |  | 150,327 |  |  | No expiration |
Brazil |  |  | 12,534 |  |  | No expiration |
Germany |  |  | 22,916 |  |  | No expiration |
Israel |  |  | 27,666 |  |  | No expiration |
Japan |  |  | 5,295 |  |  |  | 2018 - 2025 |
Netherlands |  |  | 19,019 |  |  |  | 2017 - 2025 |
The Republic of China (Taiwan) |  |  | 9,019 |  |  |  | 2024 - 2026 |
United States |  |  | 90,247 |  |  |  | 2033 - 2036 |
California |  |  | 55,407 |  |  |  | 2020 - 2036 |
Pennsylvania |  |  | 721,824 |  |  |  | 2018 - 2036 |
At December 31, 2016, the Company had the following significant tax credit carryforwards available:
|  |  |  |  | Expires |
U.S. Foreign Tax Credit |  | $ | 11,093 |  |  |  | 2020 - 2022 |
U.S. Federal Research Credit |  |  | 1,986 |  |  |  | 2034 - 2036 |
California Research Credit |  |  | 12,353 |  |  | No expiration |
Note 5 – Income Taxes (continued) At December 31, 2016, no provision has been made for U.S. federal and state income taxes on approximately $2,484,372 of foreign earnings, which 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. During the fourth fiscal quarter of 2015, the Company recognized income tax expense, including U.S. federal and state income taxes, incremental foreign income taxes, and withholding taxes payable to foreign jurisdictions, on $300,000 of foreign earnings, (including $20,000 of 2015 earnings and $280,000 of earnings from prior periods). This tax expense was recognized in 2015 following an evaluation of the Company's anticipated domestic cash needs over the next several years and the Company's most efficient use of liquidity, and with consideration of the amount of cash that can be repatriated to the U.S. efficiently with lesser withholding taxes in foreign jurisdictions. The Company repatriated $46,000 pursuant to this program in 2016. During 2014, the Company recognized income tax expense on foreign earnings in anticipation of a repatriation intended to pay $53,000 of borrowings on its revolving credit facility used for the Capella acquisition (see Note 2). The tax provision for the year ended December 31, 2014 included all U.S. federal and state income taxes, incremental foreign income taxes, and withholding taxes payable to foreign jurisdictions. That repatriation was completed in 2015. Net income taxes paid were $58,788, $49,301, and $62,051 for the years ended December 31, 2016, 2015, and 2014, 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, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Balance at beginning of year |  | $ | 23,527 |  |  | $ | 26,583 |  |  | $ | 45,877 |
Addition based on tax positions related to the current year |  |  | 1,553 |  |  |  | 1,439 |  |  |  | 1,641 |
Addition based on tax positions related to prior years |  |  | 1,047 |  |  |  | 1,894 |  |  |  | 6,484 |
Currency translation adjustments |  |  | (96 | ) |  |  | (1,370 | ) |  |  | (1,387 | )
Reduction based on tax positions related to prior years |  |  | - |  |  |  | - |  |  |  | - |
Reduction for settlements |  |  | (1,210 | ) |  |  | (4,879 | ) |  |  | (3,556 | )
Reduction for lapses of statute of limitation |  |  | (8,016 | ) |  |  | (140 | ) |  |  | (22,476 | )
Balance at end of year |  | $ | 16,805 |  |  | $ | 23,527 |  |  | $ | 26,583 |
All of the unrecognized tax benefits of $16,805 and $23,527, as of December 31, 2016 and 2015, 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, 2016 and 2015, the Company had accrued interest and penalties related to the unrecognized tax benefits of $1,638 and $3,887, respectively. During the years ended December 31, 2016, 2015, and 2014, the Company recognized $542, $785, and $1,839, 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, 2016 and 2015, 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. The tax returns of other non-U.S. subsidiaries which are currently under examination include Germany (2009 through 2012), India (2004 through 2013), Israel (2013 through 2014), and Taiwan (2014). 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 $57 to $6,866.

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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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