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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Taxes |
Income Taxes | Note 17 — Income Taxes The amounts of income (loss) before income taxes attributable to domestic and foreign operations were as follows:
|  |  | Year ended December 31, |
|  | 2016 |  | 2015 |  | 2014
|  |  |  |  |  | (in thousands) |  |  |  |
Domestic |  |  | $ | (123,021 | ) |  | $ | (53,553 | ) |  | $ | (95,195 | )
Foreign |  |  | 3,577 |  |  | 30,907 |  |  | 16,841 |
Total |  |  | $ | (119,444 | ) |  | $ | (22,646 | ) |  | $ | (78,354 | )
Significant components of the expense (benefit) for income taxes consisted of the following:
|  |  | Year ended December 31, |
|  | 2016 |  | 2015 |  | 2014
|  |  |  |  |  | (in thousands) |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |
Federal |  |  | $ | — |  |  | $ | 139 |  |  | $ | (2,464 | )
Foreign |  |  | 1,937 |  |  | 6,952 |  |  | 2,325 |
State and local |  |  | (111 | ) |  | (407 | ) |  | 55 |
Total current expense (benefit) for income taxes |  |  | 1,826 |  |  | 6,684 |  |  | (84 | )
Deferred: |  |  |  |  |  |  |  |  |  |
Federal |  |  | 1,459 |  |  | 2,104 |  |  | (11,230 | )
Foreign |  |  | (646 | ) |  | 516 |  |  | (291 | )
State and local |  |  | 127 |  |  | 28 |  |  | 191 |
Total deferred expense (benefit) for income taxes |  |  | 940 |  |  | 2,648 |  |  | (11,330 | )
Total expense (benefit) for income taxes |  |  | $ | 2,766 |  |  | $ | 9,332 |  |  | $ | (11,414 | )
The income tax expense was reconciled to the tax expense computed at the U.S. federal statutory tax rate as follows:
|  |  | Year ended December 31, |
|  | 2016 |  | 2015 |  | 2014
|  |  |  |  |  | (in thousands) |  |  |  |
Income tax expense (benefit) at U.S. statutory rates |  |  | $ | (41,806 | ) |  | $ | (7,926 | ) |  | $ | (27,424 | )
State taxes, net of U.S. federal impact |  |  | (1,963 | ) |  | (1,607 | ) |  | (662 | )
Effect of international operations |  |  | 8,849 |  |  | (7,659 | ) |  | (6,160 | )
Research and development tax credit |  |  | (801 | ) |  | (1,628 | ) |  | (1,935 | )
Net change in valuation allowance |  |  | 50,520 |  |  | 23,655 |  |  | 27,156 |
Change in accrual for unrecognized tax benefits |  |  | (1,700 | ) |  | 4,876 |  |  | (1,940 | )
ALD liquidation |  |  | (12,435 | ) |  | — |  |  | — |
U.S. share-based compensation |  |  | 2,133 |  |  | — |  |  | — |
Goodwill impairment |  |  | — |  |  | — |  |  | 9,786 |
Change in contingent consideration |  |  | — |  |  | — |  |  | (10,279 | )
Worthless stock deduction |  |  | — |  |  | (2,069 | ) |  | — |
Change in entity tax status |  |  | — |  |  | 904 |  |  | — |
Other |  |  | (31 | ) |  | 786 |  |  | 44 |
Total expense (benefit) for income taxes |  |  | $ | 2,766 |  |  | $ | 9,332 |  |  | $ | (11,414 | )
Deferred income taxes reflect the effect of temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes. The tax effects of the temporary differences were as follows:
|  |  | December 31, |
|  | 2016 |  | 2015
|  |  | (in thousands) |
Deferred tax assets: |  |  |  |  |  |  |
Inventory valuation |  |  | $ | 6,681 |  |  | $ | 6,334 |
Net operating losses and credit carry forwards |  |  | 54,527 |  |  | 33,181 |
Credit carry forwards |  |  | 24,598 |  |  | 20,738 |
Warranty and installation accruals |  |  | 1,757 |  |  | 3,022 |
Share-based compensation |  |  | 12,624 |  |  | 12,461 |
Other |  |  | 6,778 |  |  | 5,787 |
Total deferred tax assets |  |  | 106,965 |  |  | 81,523 |
Valuation allowance |  |  | (106,793 | ) |  | (56,273 | )
Net deferred tax assets |  |  | 172 |  |  | 25,250 |
Deferred tax liabilities: |  |  |  |  |  |  |
Purchased intangible assets |  |  | 11,071 |  |  | 32,550 |
Undistributed earnings |  |  | 186 |  |  | 618 |
Depreciation |  |  | 69 |  |  | 1,908 |
Total deferred tax liabilities |  |  | 11,326 |  |  | 35,076 |
Net deferred taxes |  |  | $ | (11,154 | ) |  | $ | (9,826 | )
The Company did not record a provision for U.S. federal income taxes or any additional withholding taxes on unremitted earnings in foreign subsidiaries in the amount of $48.2 million at December 31, 2016, as such amount is permanently reinvested. It is not practicable to determine the hypothetical amount of tax associated with such unremitted earnings if the Company were to assume they were remitted to the U.S. For financial reporting purposes, these balances are determined as amounts that exceed the tax basis of such investments. The Company has provided U.S. federal income taxes and additional withholding taxes on foreign earnings that are anticipated to be remitted. At December 31, 2016 the Company had U.S. federal net operating loss carryforwards of approximately $137.2 million that will expire between 2034 and 2036, if not utilized. Additionally, $3.5 million of capital losses will expire in 2021. At December 31, 2016 the Company had U.S. foreign tax credit carryforwards of $7.7 million that will expire between 2023 and 2026 and U.S. federal research and development credits of $12.1 million that will expire between 2031 and 2036. The Company also has state and local net operating loss carryforwards of approximately $68.0 million (a net deferred tax asset of $3.5 million net of federal tax benefits and before the valuation allowance) that will expire between 2016 and 2036. In addition, the Company has state credits of $9.9 million some of which are indefinite and others that will expire between 2016 and 2030. The Company makes assessments to estimate if sufficient taxable income will be generated in the future to use existing deferred tax assets. The Company’s cumulative three year loss in its domestic operations led to a full valuation allowance against the Company’s U.S. deferred tax assets in fiscal year 2014, because the Company could not conclude that such amounts are realizable on a more-likely-than-not basis. As the cumulative three year loss continued in 2016, the Company increased the valuation allowance by approximately $50.5 million during the period ended December 31, 2016. The Company amortizes certain indefinite-lived intangible assets for tax purposes, which are not amortizable for financial reporting purposes. The deferred tax liability at December 31, 2016 includes $13.2 million relating to the tax effect of differences between financial reporting and tax bases of intangible assets that are not expected to reverse within the Company’s net operating loss carryforward period. A roll-forward of the Company’s uncertain tax positions for all U.S. federal, state, and foreign tax jurisdictions was as follows:
|  |  | December 31, |
|  |  | 2016 |  |  |  | 2015 |  |  |  | 2014 |
|  |  | (in thousands) |
Balance at beginning of year |  |  | $ | 9,152 |  |  |  | $ | 4,276 |  |  |  | $ | 6,228 |
Additions for tax positions related to current year |  |  | 1,038 |  |  |  | 5,596 |  |  |  | 244 |
Additions for tax positions related to prior years |  |  | 233 |  |  |  | 143 |  |  |  | 199 |
Reductions for tax positions related to prior years |  |  | (2,826 | ) |  |  | — |  |  |  | (2,345 | )
Reductions due to the lapse of the statute of limitations |  |  | (39 | ) |  |  | (642 | ) |  |  | (38 | )
Settlements |  |  | (106 | ) |  |  | (221 | ) |  |  | (12 | )
Balance at end of year |  |  | $ | 7,452 |  |  |  | $ | 9,152 |  |  |  | $ | 4,276 |
If the amount of unrecognized tax benefits at December 31, 2016 were recognized, the Company’s income tax provision would decrease by $5.4 million. The gross amount of interest and penalties accrued in income tax payable in the Consolidated Balance Sheets was approximately $0.3 million and $0.2 million at December 31, 2016 and 2015, respectively. The Company or one of its subsidiaries files income tax returns in the United States federal jurisdiction and various state, local, and foreign jurisdictions. All material federal income tax matters have been concluded for years through 2013 subject to subsequent utilization of net operating losses generated in such years. All material state and local income tax matters have been reviewed through 2012. The majority of the Company’s foreign jurisdictions have been reviewed through 2013. Substantially all of the Company’s foreign jurisdictions’ statutes of limitation remain open with respect to the tax years from 2013 through 2016. The Company does not anticipate that its uncertain tax position will change significantly within the next twelve months subject to the completion of the ongoing tax audits and any resultant settlement.

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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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