Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Consolidated income before provision for income taxes

Consolidated income before provision for income taxes consists of the following for the years ended December 31, 2012, 2013 and 2014 (U.S. dollars in thousands):

	2012		2013		2014

U.S.	$	259,309	$	307,994	$	184,476
Foreign		85,933		248,946		114,031
Total	$	345,242	$	556,940	$	298,507

Provisions for current and deferred taxes

The provision for current and deferred taxes for the years ended December 31, 2012, 2013 and 2014 consists of the following (U.S. dollars in thousands):

	2012			2013			2014
Current
Federal	$	70,727		$	81,871		$	37,402
State		2,425			361			2,095
Foreign		45,851			148,310			48,904
		119,003			230,542			88,401
Deferred
Federal		12,918			(2,831	)		(380	)
State		656			551			444
Foreign		(8,980	)		(36,210	)		20,866
		4,594			(38,490	)		20,930
Provision for income taxes	$	123,597		$	192,052		$	109,331

Principal components of deferred taxes

The principal components of deferred taxes are as follows (U.S. dollars in thousands):

	Year Ended December 31,
	2013			2014
Deferred tax assets:
Inventory differences	$	2,927		$	12,362
Foreign tax credit and other foreign benefits		120,534			116,603
Stock-based compensation		18,132			17,211
Accrued expenses not deductible until paid		88,465			48,189
Foreign currency exchange		13,734			10,774
Net operating losses		10,808			17,530
Capitalized research and development		6,202			3,362
Exchange gains and losses		-			41,542
Other		739			841
Gross deferred tax assets		261,541			268,414
Deferred tax liabilities:
Exchange gains and losses		9,924			-
Intangibles step-up		16,375			15,106
Overhead allocation to inventory		2,523			10,781
Amortization of intangibles		17,360			18,374
Foreign outside basis in controlled foreign corporation		76,470			100,016
Other		63,409			48,187
Gross deferred tax liabilities		186,061			192,464
Valuation allowance		(10,803	)		(35,999	)
Deferred taxes, net	$	64,677		$	39,951

Components of 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,
	2013		2014

Net current deferred tax assets	$	73,456	$	40,840
Net noncurrent deferred tax assets		5,174		15,128
Total net deferred tax assets		78,630		55,968

Net current deferred tax liabilities		1		-
Net noncurrent deferred tax liabilities		13,952		16,017
Total net deferred tax liabilities		13,953		16,017
Deferred taxes, net	$	64,677	$	39,951

Actual tax rate compared to statutory U.S federal tax rate

The actual tax rate for the years ended December 31, 2012, 2013 and 2014 compared to the statutory U.S. Federal tax rate is as follows:

	Year Ended December 31,
	2012			2013			2014

Income taxes at statutory rate		35.00	%		35.00	%		35.00	%
Indefinitely invested earnings of non-U.S. subsidiaries		–			(0.76	)		–
Non-deductible expenses		0.12			0.12			0.12
Controlled foreign corporation losses		–			–			1.48
Other		0.68			0.12			0.03
		35.80	%		34.48	%		36.63	%