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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2019
Income Taxes [Abstract] |
Consolidated Income Before Provision for Income Taxes | Consolidated income before provision for income taxes consists of the following for the years ended December 31, 2019, 2018 and 2017 (U.S. dollars in thousands):
|  | 2019 |  |  | 2018 |  |  | 2017 |
U.S. |  | $ | 24,211 |  |  | $ | (67,087 | ) |  | $ | 1,135 |
Foreign |  |  | 230,961 |  |  |  | 286,753 |  |  |  | 264,432 |
Total |  | $ | 255,172 |  |  | $ | 219,666 |  |  | $ | 265,567 |
Current and Deferred Taxes | The provision for current and deferred taxes for the years ended December 31, 2019, 2018 and 2017 consists of the following (U.S. dollars in thousands):
|  | 2019 |  |  | 2018 |  |  | 2017 |
Current |  |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |  |  | $ | (14,358 | )
State |  |  | 2,213 |  |  |  | 652 |  |  |  | 1,814 |
Foreign |  |  | 79,694 |  |  |  | 116,303 |  |  |  | 104,688 |
|  |  | 81,907 |  |  |  | 116,955 |  |  |  | 92,144 |
Deferred |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (8,878 | ) |  |  | (17,836 | ) |  |  | 45,593 |
State |  |  | (473 | ) |  |  | (1,974 | ) |  |  | (2,273 | )
Foreign |  |  | 9,063 |  |  |  | 634 |  |  |  | 666 |
|  |  | (288 | ) |  |  | (19,176 | ) |  |  | 43,986 |
Provision for income taxes |  | $ | 81,619 |  |  | $ | 97,779 |  |  | $ | 136,130 |
Deferred Tax Assets and Liabilities | The principal components of deferred taxes are as follows (U.S. dollars in thousands):
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |
Deferred tax assets: |  |  |  |  |  |
Inventory differences |  | $ | 5,040 |  |  | $ | 4,257 |
Foreign tax credit and other foreign benefits |  |  | 69,820 |  |  |  | 62,521 |
Stock-based compensation |  |  | 7,441 |  |  |  | 7,893 |
Accrued expenses not deductible until paid |  |  | 35,374 |  |  |  | 40,509 |
Foreign currency exchange |  |  | 163 |  |  |  | 1,023 |
Net operating losses |  |  | 6,341 |  |  |  | 4,522 |
Capitalized research and development |  |  | 18,716 |  |  |  | 11,988 |
Interest expense limitation – 163(j) |  |  | — |  |  |  | 847 |
R&D credit carryforward |  |  | 881 |  |  |  | 807 |
Other |  |  | 37 |  |  |  | 339 |
Gross deferred tax assets |  |  | 143,813 |  |  |  | 134,706 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Foreign currency exchange |  |  | 721 |  |  |  | 124 |
Foreign withholding taxes |  |  | 20,986 |  |  |  | 21,524 |
Intangibles step-up |  |  | 4,958 |  |  |  | 5,763 |
Overhead allocation to inventory |  |  | 3,611 |  |  |  | 2,857 |
Amortization of intangibles |  |  | 15,393 |  |  |  | 15,812 |
Other |  |  | 1,063 |  |  |  | 833 |
Gross deferred tax liabilities |  |  | 46,732 |  |  |  | 46,913 |
Valuation allowance |  |  | (77,042 | ) |  |  | (68,697 | )
Deferred taxes, net |  | $ | 20,039 |  |  | $ | 19,096 |
Deferred Tax Asset Valuation Adjustments | The deferred tax asset valuation adjustments for the years ended December 31, 2019, 2018 and 2017 are as follows (U.S. dollars in thousands):
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Balance at the beginning of period |  | $ | 68,697 |  |  | $ | 56,906 |  |  | $ | 9,137 |
Additions charged to cost and expenses |  |  | 10,913 | (1) |  |  | 27,902 | (4) |  |  | 53,983 | (6)
Decreases |  |  | (3,343 | )(2) |  |  | (16,215 | )(5) |  |  | (6,400 | )(7)
Adjustments |  |  | 775 | (3) |  |  | 104 | (3) |  |  | 186 | (3)
Balance at the end of the period |  | $ | 77,042 |  |  | $ | 68,697 |  |  | $ | 56,906 |
(1) | Increase in valuation is due primarily to $9.8 million that was recorded on the foreign tax credit carryforward. The additional amount is due to net operating losses in foreign markets.
(2) | The decrease was due primarily to the utilization of foreign tax credits, and expiration of foreign net operating losses.
(3) | Represents the net currency effects of translating valuation allowances at current rates of exchange.
(4) | Increase in valuation is due primarily to the $27.2 million that was recorded on the foreign tax credit carryforward. The additional amount is due to net operating losses in foreign markets
(5) | The decrease was due primarily to the utilization of foreign tax credits. Decrease is due primarily to the write-off of Brazil deferred tax assets, which had no impact to the income statement, as a valuation allowance had been previously recorded against the asset.
(6) | Increase in valuation allowance is due primarily to the $52.0 million that was recorded on the foreign tax credit carryforward. The additional amount is due to net operating losses in foreign markets.
(7) | Decrease is due primarily to the write-off of Brazil deferred tax assets, which had no impact to the income statement, as a valuation allowance had been previously recorded against the asset.
Deferred Taxes, Net on a Jurisdiction Basis | The components of deferred taxes, net on a jurisdiction basis are as follows (U.S. dollars in thousands):
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |
Net noncurrent deferred tax assets |  | $ | 30,780 |  |  | $ | 37,332 |
Net noncurrent deferred tax liabilities |  |  | 10,741 |  |  |  | 18,236 |
Deferred taxes, net |  | $ | 20,039 |  |  | $ | 19,096 |
Reconciliation of Statutory to Effective Tax Rate | The actual tax rate for the years ended December 31, 2019, 2018 and 2017 compared to the statutory U.S. Federal tax rate is as follows:
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Income taxes at statutory rate |  |  | 21.00 | % |  |  | 21.00 | % |  |  | 35.00 | %
Indefinite reinvestment |  |  | — |  |  |  | (2.73 | )% |  |  | 2.75 | %
Excess tax benefit from equity award |  |  | 0.02 | % |  |  | (1.41 | )% |  |  | (2.38 | )%
Non-U.S. income taxed at different rates |  |  | 3.09 | % |  |  | 7.37 | % |  |  | — |
Foreign withholding taxes |  |  | 4.10 | % |  |  | 7.68 | % |  |  | — |
Change in reserve for uncertain tax positions |  |  | 1.07 | % |  |  | 3.68 | % |  |  | — |
Non-deductible expenses |  |  | — |  |  |  | — |  |  |  | 0.17 | %
Controlled foreign corporation losses |  |  | — |  |  |  | — |  |  |  | (0.13 | )%
Valuation allowance recognized foreign tax credit & others |  |  | 2.56 | % |  |  | 5.54 | % |  |  | 19.59 | %
Write-off outside basis DTL |  |  | — |  |  |  | — |  |  |  | (2.89 | )%
Revaluation of deferred taxes |  |  | — |  |  |  | 1.61 | % |  |  | (1.28 | )%
Foreign-Derived Intangible Income (FDII) |  |  | (0.70 | )% |  |  | — |  |  |  | — |
Other |  |  | 0.85 | % |  |  | 1.77 | % |  |  | 0.43 | %
|  |  | 31.99 | % |  |  | 44.51 | % |  |  | 51.26 | %

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