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Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2018
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, 2018, 2017 and 2016 (U.S. dollars in thousands):

  
2018
  
2017
  
2016
 
          
U.S.
 
$
(67,087
)
 
$
1,135
  
$
(19,119
)
Foreign
  
286,753
   
264,432
   
231,958
 
Total
 
$
219,666
  
$
265,567
  
$
212,839
 
Current and Deferred Taxes
The provision for current and deferred taxes for the years ended December 31, 2018, 2017 and 2016 consists of the following (U.S. dollars in thousands):

  
2018
  
2017
  
2016
 
Current
         
Federal
 
$ 
─  
$
(14,358
)
 
$ 
─ 
State
  
652
   
1,814
   
(718
)
Foreign
  
116,303
   
104,688
   
70,652
 
   
116,955
   
92,144
   
69,934
 
Deferred
            
Federal
  
(17,836
)
  
45,593
   
(27,171
)
State
  
(1,974
)
  
(2,273
)
  
1,104
 
Foreign
  
634
   
666
   
25,886
 
   
(19,176
)
  
43,986
   
(181
)
Provision for income taxes
 
$
97,779
  
$
136,130
  
$
69,753
 
Deferred Tax Assets and Liabilities
The principal components of deferred taxes are as follows (U.S. dollars in thousands):

  
Year Ended December 31,
 
  
2018
  
2017
 
Deferred tax assets:
      
Inventory differences
 
$
4,257
  
$
2,861
 
Foreign tax credit and other foreign benefits
  
62,521
   
52,408
 
Stock-based compensation
  
7,893
   
6,327
 
Accrued expenses not deductible until paid
  
40,509
   
39,326
 
Foreign currency exchange
  
1,023
   
2,001
 
Net operating losses
  
4,522
   
5,230
 
Capitalized research and development
  
11,988
   
197
 
Interest expense limitation – 163(j)
  
847
  
─
 
R&D credit carryforward
  
807
  

─ 
Other
  
339
   
211
 
Gross deferred tax assets
  
134,706
   
108,561
 
Deferred tax liabilities:
        
Foreign currency exchange
  
124
   
874
 
Foreign withholding taxes
  
21,524
   
29,018
 
Intangibles step-up
  
5,763
   
6,568
 
Overhead allocation to inventory
  
2,857
   
3,977
 
Amortization of intangibles
  
15,812
   
11,475
 
Foreign outside basis in controlled foreign corporation
 

─  

─ 
Other
  
833
   
2,676
 
Gross deferred tax liabilities
  
46,913
   
54,588
 
Valuation allowance
  
(68,697
)
  
(56,906
)
Deferred taxes, net
 
$
19,096
  
$
(2,933
)
Deferred Tax Asset Valuation Adjustments
The deferred tax asset valuation adjustments for the years ended December 31, 2018, 2017 and 2016 are as follows (U.S. dollars in thousands):

  
Year Ended December 31,
 
  
2018
  
2017
  
2016
 
          
Balance at the beginning of period
 
$
56,906
  
$
9,137
  
$
49,271
 
Additions charged to cost and expenses
  
27,902
(1) 
  
53,983
(4) 
  
692
 
Decreases
  
(16,215
)(2)
  
(6,400
)(5)
  
(40,442
)(6)
Adjustments
  
104
(3) 
  
186
(3) 
  
(384
)(3)
Balance at the end of the period
 
$
68,697
  
$
56,906
  
$
9,137
 



(1)
Increase in valuation is due primarily to $27.2 million that was recorded on the foreign tax credit carryforward. The additional amount is due to research and development credits, interest expense limitation (163(j)), and net operating losses in foreign markets.


(2)
The decrease was due primarily to the utilization of foreign tax credits, the conversion of foreign tax credits to NOL’s at the filing of the US 2017 Income Tax return (note NOL’s were absorbed in 2018 due to GILTI inclusion), utilization, and expiration of foreign NOL’s.


(3)
Represents the net currency effects of translating valuation allowances at current rates of exchange.


(4)
Increase in valuation 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


(5)
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)
 Decrease in valuation allowance due to lapse in statute of limitation of the net operating losses carryforward and due to the write off of Venezuelan deferred tax assets, which had no impact to the income statement.
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,
 
  
2018
  
2017
 
       
Net noncurrent deferred tax assets
 
$
37,332
  
$
33,785
 
         
Net noncurrent deferred tax liabilities
  
18,236
   
36,718
 
         
Deferred taxes, net
 
$
19,096
  
$
(2,933
)
Reconciliation of Statutory to Effective Tax Rate
The actual tax rate for the years ended December 31, 2018, 2017 and 2016 compared to the statutory U.S. Federal tax rate is as follows:

  
Year Ended December 31,
    
  
2018
  
2017
  
2016
 
          
Income taxes at statutory rate
  
21.00
%
  
35.00
%
  
35.00
%
Indefinite reinvestment
  
(2.73
)
  
2.75
   
(1.98
)
Excess tax benefit from equity award
  
(1.41
)
  
(2.38
)
 

─
 
Non-U.S. income taxed at different rates
  
7.37
  

─
  

─
 
Foreign withholding taxes
  
7.68
  

─
  

─
 
Change in reserve for uncertain tax positions
  
3.68
  
─
  

─
 
Non-deductible expenses
 
─
   
0.17
   
0.11
 
Controlled foreign corporation losses
 

─
   
(0.13
)
  
(2.63
)
Valuation allowance recognized foreign tax credit & others
  
5.54
   
19.59
  

─
 
Write-off outside basis DTL
 
 ─   
(2.89
)
 

─
 
Revaluation of deferred taxes
  
1.61
   
(1.28
)
 

─
 
Section 987 implementation
 

─
  

─
   
2.69
 
Other
  
1.77
   
0.43
   
(0.42
)
   
44.51
%
  
51.26%
%
  
32.77
%