Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Statutory rate reconciliation for continuing operations:


	Year ended December 31,
	2012			2011 (Restated, see Note 2)			2010 (Restated, see Note 2)
Tax at US statutory rate of 35%	$	(123,039	)	$	(445,922	)	$	(56,582	)
Tax rate differences		43,142			201,837			22,293
Valuation allowance		13,538			61,293			29,675
Permanent differences		86,906			220,304			(9,247	)
Other		(8,850	)		0			0

Income tax (benefit)/expense	$	11,697		$	37,512		$	(13,861	)

Components Of Provision For Income Taxes From Continuing Operations

The Company’s significant components of the provision for income taxes from continuing operations were as follows:


	2012			2011 (Restated, see Note 2)		2010 (Restated, see Note 2)
Current (domestic)	$	483		$	0	$	0
Current (foreign)		12,797			14,687		17,391
Deferred (domestic)		(1,680	)		1,499		(3,367	)
Deferred (foreign)		97			21,326		(27,885	)

Income tax (benefit)/expense	$	11,697		$	37,512	$	(13,861	)

Pre-Tax Book Income Earned From Continuing Operations

The Company is headquartered in the US. Pre-tax book loss earned from continuing operations in the US (domestic) and outside the US (foreign) in 2012, 2011 and 2010 was as follows:


	2012			2011			2010
Pre-tax income/(loss)—domestic	$	(44,928	)	$	(9,394	)	$	(21,068	)
Pre-tax income/(loss)—foreign		(306,613	)		(1,278,714	)		(135,317	)

	$	(351,541	)	$	(1,288,108	)	$	(156,385	)

Components of Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities are as follows:


	December 31,
	2012			2011 (Restated, see Note 2)			2010 (Restated, see Note 2)
Deferred tax assets
Accrued expenses, deferred income and prepaid	$	18,275		$	20,149		$	11,163
Allowance for doubtful accounts receivable		7,083			3,050			6,493
Unrealized foreign exchange losses		14,473			29,224			8,510
Net operating loss carry-forward benefit		55,834			54,708			70,596
Receivables		8,289			0			0
Property, plant & equipment, intangibles		5,775			0			0
Other		7,810			1,664			144
Valuation allowance		(99,656	)		(86,118	)		(35,778	)

Deferred tax asset, net of valuation allowance	$	17,883		$	22,677		$	61,128

Deferred tax liability
Trademarks		81,546			78,956			110,832
Unrealized foreign exchange gains		184			13,320			535
Investments in subsidiaries		3,335			4,135			0
Property, plant and equipment		14,868			6,735			0
Customer relationships		0			1,425			0
Timing differences in finance type leases		0			339			349
Deferred income		0			1,265			276
ASC 470 impact		276			1,500			2,998
Payables		7,770			0			0
Receivables		2,572			0			0
Other		938			5,637			9,771

Deferred tax liability	$	111,489		$	113,312		$	124,761


Total deferred tax asset, net of valuation allowance		17,883			22,677			61,128
Total deferred tax liability		111,489			113,312			124,761

Total net deferred tax		(93,606	)		(90,635	)		(63,633	)

Classified as
Current deferred tax asset		2,298			4,717			51,682
Non-current deferred tax asset		3,037			0			6,649
Current deferred tax liability		(4,907	)		0			0
Non-current deferred tax liability		(94,034	)		(95,352	)		(121,964	)

Total net deferred tax	$	(93,606	)	$	(90,635	)	$	(63,633	)

Summary Of Tax Losses Carried Forward

Tax losses can be carried forward for the following periods:


Hungary*			Unrestricted period
U.S.			20 years
Russia			10 years
Poland			5 years

*	In some circumstances the Tax Office’s permission to carry the loss forward is required.

Amounts and Expiration dates of Operating Loss Carryforwards for Tax Purposes

The amounts and expiration dates of operating loss carryforwards for tax purposes


Expiration date	Amount of operating loss carried forward
31 December 2013	$	32,326
31 December 2014		94,305
31 December 2015		87,016
31 December 2016		14,026
31 December 2017		4,493
Afterwards		64,821

	$	296,987

Changes In Accrual for Unrecognized Income Tax Benefits and Related Interest and Penalties

The following table summarizes the changes in the accrual for unrecognized income tax benefits and related interest and penalties for the years ended December 31, 2012, 2011 and 2010:


	2012						2011					2010
	Unrecognized income tax benefits			Interest and penalties			Unrecognized income tax benefits			Interest and penalties		Unrecognized income tax benefits		Interest and penalties
Balance, beginning of the period	$	5,044		$	2,093		$	3,000		$	0	$	0	$	0
Additions based on tax positions related to the current year		5,606			457			0			0		0		0
Additions of tax positions of prior years		8,474			806			5,044			2,093		3,000		0
Reductions of tax positions of prior year		(1,415	)		(20	)		(3,000	)		0		0		0
Reductions of tax positions relating to settlements with taxing authorities		(1,831	)		(977	)		0			0		0		0
Foreign currency translation adjustment		574			117			0			0		0		0

Balance, end of period	$	16,452		$	2,476		$	5,044		$	2,093	$	3,000	$	0

Summary Of Tax Examinations

Tax liabilities (including corporate income tax, Value Added Tax (VAT), social security and other taxes) of the Company’s subsidiaries may be subject to examinations by the tax authorities for up to certain period from the end of the year the tax is payable, as follows:


Poland			5 years
Hungary			5 years
Russia			3 years

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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- Definition

Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded.

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