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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Taxes [Abstract] |
Income Taxes | 5. Income Taxes The provision (benefit) for income taxes included in the accompanying consolidated statement of operations represents federal, state and foreign income taxes. The components of income (loss) before income taxes and the provision (benefit) for income taxes consist of the following:
Years ended December 31 |  | 2014 |  | 2013 |  | 2012
Income (loss) before income taxes: |  |  |  |  |  |
Domestic | $ | 1,635 | $ | 5,771 | $ | (1,511)
Foreign |  | (54,695) |  | 17,555 |  | (2,299)
Total income (loss) before income taxes | $ | (53,060) | $ | 23,326 | $ | (3,810)
Provision for income taxes: |  |  |  |  |  |
Current: |  |  |  |  |  |
Federal | $ | - | $ | - | $ | -
State and foreign |  | 1,382 |  | 5,878 |  | 2,700
Total current provision |  | 1,382 |  | 5,878 |  | 2,700
Deferred: |  |  |  |  |  |
Federal |  | - |  | - |  | 98
State and foreign |  | (3,238) |  | (3,081) |  | (2,831)
Total deferred benefit |  | (3,238) |  | (3,081) |  | (2,733)
Total provision (benefit) for income taxes | $ | (1,856) | $ | 2,797 | $ | (33)
A reconciliation of the Company’s effective income tax rate to the statutory federal tax rate is as follows:
Years ended December 31 |  | 2014 |  | 2013 |  | 2012 |
Statutory U.S. federal income tax rate |  | (35.0) | % | 35.0 | % | (35.0) | %
State income taxes, net of federal tax benefit |  | - |  | 2.4 |  | (4.9) |
Tax credits |  | (1.3) |  | (3.5) |  | - |
Foreign tax rate differential |  | 0.2 |  | (9.5) |  | (20.3) |
Increase (reduction) of income tax accruals |  | 0.2 |  | (1.1) |  | 0.6 |
Tax on foreign dividends, net of foreign tax credits |  | (0.1) |  | (8.1) |  | 17.5 |
Reduction of deferred taxes |  | - |  | 0.6 |  | 7.6 |
Valuation allowances |  | (2.1) |  | (6.2) |  | 15.8 |
Non-deductible goodwill impairment |  | 33.9 |  | - |  | - |
Non-deductible compensation |  | 1.0 |  | 3.0 |  | 15.3 |
Other |  | (0.3) |  | (0.6) |  | 2.6 |
Effective income tax rate |  | (3.5) | % | 12.0 | % | (0.8) | %
The Company recognized a provision (benefit) for income taxes of $(1,856) or (3.5)%, $2,797 or 12.0% and $(33) or (0.8)% of income (loss) before income tax for federal, state and foreign income taxes for the years ended December 31, 2014, 2013 and 2012, respectively. The decrease in tax expense for the year ended December 31, 2014 compared to the same period for 2013 was predominantly due to the tax benefit of the loss incurred by PST, as adjusted for the non-tax deductible goodwill impairment charge of $51,458. The decrease in the tax expense was partially offset by discrete tax items related to certain foreign operations recorded during the current period. The decrease in the effective tax rate for 2014 to (3.5)% compared to the same period for 2013 of 12.0% was due to the recognition of a tax benefit on the PST operating loss which was offset by the impact of the non-tax deductible PST goodwill impairment and the discrete tax items discussed above. The Company has not recorded deferred income taxes on the undistributed earnings of its foreign subsidiaries because of management’s intent and ability to indefinitely reinvest such earnings. At December 31, 2014 the aggregate undistributed earnings of our foreign subsidiaries amounted to $31,043. The Company may be subject to U.S. income taxes and foreign withholding taxes if these earnings were distributed. It is not practicable to estimate the amount of taxes, if any, that may be payable on these earnings as that estimate depends upon circumstances that would exist at the time a remittance occurs. Significant components of the Company’s deferred tax assets and liabilities were as follows:
As of December 31 |  | 2014 |  | 2013
Deferred tax assets: |  |  |  |
Inventories | $ | 2,009 | $ | 2,943
Employee compensation and benefits |  | 3,675 |  | 3,653
Insurance |  | 387 |  | 489
Depreciation and amortization |  | 1,013 |  | 2,359
Net operating loss carryforwards |  | 48,166 |  | 45,859
General business credit carryforwards |  | 12,697 |  | 12,900
Other reserves |  | 7,493 |  | 8,883
Gross deferred tax assets |  | 75,440 |  | 77,086
Less: Valuation allowance |  | (67,907) |  | (71,827)
Deferred tax assets less valuation allowance |  | 7,533 |  | 5,259
Deferred tax liabilities: |  |  |  |
Depreciation and amortization |  | (20,910) |  | (23,718)
Basis difference - equity investee |  | (31,016) |  | (31,016)
Other |  | (976) |  | (1,764)
Gross deferred tax liabilities |  | (52,902) |  | (56,498)
Net deferred tax liability | $ | (45,369) | $ | (51,239)
The Company has concluded based on objective evidence that at December 31, 2014 and 2013 it is more likely than not that sufficient taxable income will not be generated to utilize the remaining U.S. federal, and certain state and foreign, deferred tax assets before they expire and as such a valuation allowance has been recorded. The valuation allowance represents the amount of tax benefit related to U.S. federal, state and foreign net operating losses, credits and other deferred tax assets that are not recognized at December 31, 2014. The Company has net operating loss carry forwards of $113,901, $101,722 and $19,887 for U.S. federal, state and foreign tax jurisdictions, respectively. The U.S. federal net operating losses, if unused, begin to expire in December 31, 2025, the state net operating losses expire at various times and the foreign net operating losses expire at various times or have indefinite expiration dates. The Company has general business and foreign tax credit carry forwards of $13,060, $1,991 and $1,175 for U.S. federal, state and foreign jurisdictions respectively. The U.S. federal general business credits, if unused, begin to expire in December 31, 2021, and the state and foreign tax credits expire at various times. The Company is required to provide a deferred tax liability corresponding to the difference between the financial reporting basis (which was remeasured to fair value upon the acquisition of an additional 24% of PST in 2011) and the tax basis in the previously held 50% ownership interest in PST (the “outside” basis difference). This outside basis difference will generally remain fixed until (1) dividends from the subsidiary exceed the parent’s share of earnings subsequent to the date it became a subsidiary or (2) there is a transaction that affects the Company’s ownership of PST. The following is a reconciliation of the Company’s total gross unrecognized tax benefits:
|  | 2014 |  | 2013 |  | 2012
Balance as of January 1 | $ | 3,624 | $ | 3,416 | $ | 3,452
Tax positions related to the current year: |  |  |  |  |  |
Additions |  | 217 |  | 217 |  | 93
Tax positions related to the prior years: |  |  |  |  |  |
Additions |  | 168 |  | 216 |  | -
Reductions |  | - |  | (71) |  | (58)
Expirations of statutes of limitation |  | (121) |  | (154) |  | (71)
Balance as of December 31 | $ | 3,888 | $ | 3,624 | $ | 3,416
At December 31, 2014 the Company has classified $719 as a noncurrent liability and $3,299 as a reduction to non-current deferred income tax assets. The amount of unrecognized tax benefits is not expected to change significantly during the next 12 months. Management is currently unaware of issues under review that could result in a significant change or a material deviation in this estimate. If the Company’s tax positions are sustained by the taxing authorities in favor of the Company, the amounts that would affect the Company’s effective tax rate are approximately $3,851 and $3,547 at December 31, 2014 and 2013, respectively. Consistent with historical financial reporting, the Company has elected to classify interest expense and, if applicable, penalties which could be assessed related to unrecognized tax benefits as a component of income tax expense. For the years ended December 31, 2014, 2013 and 2012, the Company recognized expense (benefit) of approximately $(411), $(82) and $64 of gross interest and penalties, respectively. The Company has accrued approximately $213 and $624 for the payment of interest and penalties at December 31, 2014 and 2013, respectively. The Company conducts business globally and, as a result, files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business the Company is subject to examination by taxing authorities throughout the world. The following table summarizes the open tax years for each important jurisdiction:
Jurisdiction | Open Tax Years
U.S. Federal |  | 2011-2014
Brazil |  | 2009-2014
China |  | 2011-2014
France |  | 2010-2014
Mexico |  | 2010-2014
Spain |  | 2010-2014
Sweden |  | 2009-2014
United Kingdom |  | 2010-2014

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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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