Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of domestic and foreign components of income before taxes

The domestic and foreign components of income before taxes are as follows for the years ended December 31, (in millions):

	2013			2012			2011

Domestic	$	(42.4	)	$	(11.6	)	$	(25.3	)
Foreign		167.0			149.9			170.8


	$	124.6		$	138.3		$	145.5

Components of income tax provision

The components of the income tax provision are as follows for the years ended December 31, (in millions):

	2013			2012			2011

Current income tax (benefit) expense:
Federal	$	0.2		$	1.4		$	(0.6	)
State		0.2			0.9			0.2
Foreign		35.0			69.5			56.7


Total current income tax expense		35.4			71.8			56.3
Deferred income tax (benefit):
Federal		(1.8	)		1.2			(3.8	)
State		(0.6	)		—			(0.9	)
Foreign		9.8			(12.9	)		(0.1	)


Total deferred income tax (benefit)		7.4			(11.7	)		(4.8	)


Income tax provision	$	42.8		$	60.1		$	51.5

Schedule of significant components due to which income tax (benefit) provision differs from the tax provision computed at the U.S federal statutory rate

The income tax (benefit) provision differs from the tax provision computed at the U.S federal statutory rate due to the following significant components for the years ended December 31:



Statutory tax rate	35.0	%	35.0	%	35.0	%
Foreign tax rate differential	(10.2	)	(7.2	)	(8.0	)
Permanent differences	12.0		18.7		12.8
Tax contingencies	(1.1	)	3.0		6.1
Change in tax rates	0.1		(0.7	)	0.2
Withholding taxes	0.1		0.3		—
State income taxes, net of federal benefits	0.1		0.3		(0.3	)
Purchase accounting	0.8		0.9		(3.0	)
Tax credits	(8.6	)	(9.5	)	(5.1	)
Other	0.6		0.1		(1.5	)
Change in valuation allowance for unbenefitted losses	5.5		2.6		(0.8	)


Effective tax rate	34.3	%	43.5	%	35.4	%

Schedule of tax effect of temporary items that give rise to significant portions of deferred tax assets and liabilities

The tax effect of temporary items that give rise to significant portions of the deferred tax assets and liabilities are as follows as of December 31, (in millions):

	2013			2012

Deferred tax assets:
Accounts receivable	$	2.7		$	1.3
Accrued expenses		3.1			0.8
Compensation		10.7			8.6
Investments		0.5			0.8
Deferred revenue		4.1			2.2
Net operating loss carryforwards		11.4			10.6
Capital loss carryforwards		0.8			—
Foreign tax and other tax credit carryforwards		18.8			15.5
Foreign statutory reserves		—			15.0
Unrealized currency gain/loss		4.5			4.8
Warranty reserve		2.0			3.1
Other		3.6			0.6


Gross deferred tax assets		62.2			63.3
Less valuation allowance		(42.4	)		(39.9	)


Total deferred tax assets		19.8			23.4


Deferred tax liabilities:
Accounts receivable		0.4			0.1
Fixed assets		2.1			2.8
Foreign statutory reserves		—			5.8
Investments		0.2			0.3
Inventory		0.9			0.3
Intangibles		7.4			5.8
Accrued expenses		15.5			3.9
Unrealized currency gain/loss		4.2			—


Total deferred tax liabilities		30.7			19.0


Net deferred tax liability	$	(10.9	)	$	4.4

Tabular reconciliation of beginning and ending amount of unrecognized tax benefits

A tabular reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):


Gross unrecognized tax benefits at December 31, 2010	$	27.0
Gross increases—tax positions in prior periods		5.5
Gross decreases—tax positions in prior periods		(0.6	)
Gross increases—current period tax positions		3.1
Gross decreases—current period tax positions		(0.4	)


Gross unrecognized tax benefits at December 31, 2011		34.6
Gross increases—tax positions in prior periods		5.9
Gross decreases—tax positions in prior periods		(2.2	)
Gross increases—current period tax positions		12.0
Settlements		(4.6	)
Lapse of statutes		(3.6	)


Gross unrecognized tax benefits at December 31, 2012		42.1
Gross decreases—tax positions in prior periods		(0.5	)
Gross increases—current period tax positions		0.7
Settlements		(7.1	)
Lapse of statutes		(2.5	)


Gross unrecognized tax benefits at December 31, 2013	$	32.7

- 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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