Income Taxes Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

The following table summarizes the provision (benefit) for U.S. federal, state, and foreign taxes on income from continuing operations:



	Year Ended December 31,
	2012			2011			2010
	(in thousands)
Current:
Federal	$	11,935		$	5,472		$	10,486
State and local	1,387			2,045			765
Foreign	19,448			9,898			22,715
Total current	32,770			17,415			33,966

Deferred:
Federal	12,195			17,861			7,216
State and local	468			(2,099		)	3,340
Foreign	(19,526		)	(37,265		)	(31,743		)
Total deferred	(6,863		)	(21,503		)	(21,187		)

Change in valuation allowance	88			8,518			3,195
Total provision for income taxes	$	25,995		$	4,430		$	15,974

Income Tax Rate Reconciliation [Table Text Block]

A reconciliation of income taxes at the U.S. federal statutory rate of 35% to the consolidated actual tax rate is as follows:



	Year Ended December 31,
	2012			2011			2010
	(in thousands)
Income (loss) before income taxes
Domestic	$	167,299		$	125,010		$	173,032
Foreign	(31,080		)	(626,776		)	(48,587		)
Total income (loss) before income taxes	$	136,219		$	(501,766	)	$	124,445

Expected federal income tax provision (benefit)	$	47,677		$	(175,618	)	$	43,556
Goodwill impairment	(1,905		)	207,054			—
Change in valuation allowance	88			8,518			3,195
Stock-based compensation	1,787			951			1,541
Foreign earnings	(23,769		)	(19,222		)	(14,986		)
Tax credits	(2,174		)	(6,877		)	(9,746		)
Uncertain tax positions, including interest and penalties	(2,740		)	(3,996		)	(10,242		)
Change in tax rates	174			(1,522		)	(1,428		)
State income tax provision (benefit), net of federal effect	1,242			(768		)	1,968
U.S. tax provision on foreign earnings	2,370			—			279
Domestic production activities deduction	(2,612		)	(4,313		)	(886		)
Local foreign taxes	3,635			3,525			4,140
Other, net	2,222			(3,302		)	(1,417		)
Total provision for income taxes	$	25,995		$	4,430		$	15,974

Deferred Tax Assets and Liabilities [Table Text Block]

Deferred tax assets and liabilities consist of the following:



	At December 31,
	2012			2011
	(in thousands)
Deferred tax assets
Loss carryforwards⁽¹⁾	$	54,904		$	61,330
Accrued expenses	32,998			27,103
Warranty reserves	16,712			21,230
Pension plan benefits expense	14,834			6,677
Equity compensation	10,501			10,526
Depreciation and amortization	9,632			9,241
Tax credits⁽²⁾	7,054			17,481
Inventory valuation	4,557			4,252
Other deferred tax assets, net	5,824			2,654
Total deferred tax assets	157,016			160,494
Valuation allowance	(29,560		)	(29,953		)
Total deferred tax assets, net of valuation allowance	127,456			130,541

Deferred tax liabilities
Depreciation and amortization	(59,210		)	(71,889		)
Tax effect of accumulated translation	(2,012		)	(2,733		)
Other deferred tax liabilities, net	(4,826		)	(7,885		)
Total deferred tax liabilities	(66,048		)	(82,507		)
Net deferred tax assets	$	61,408		$	48,034

⁽¹⁾

For tax return purposes at December 31, 2012, we had U.S. federal loss carryforwards of $26.4 million that expire during the years 2021 through 2022. The remaining portion of the loss carryforwards are composed primarily of losses in various foreign jurisdictions. The majority of these losses can be carried forward indefinitely. At December 31, 2012, there was a valuation allowance of $29.6 million primarily associated with foreign loss carryforwards.


⁽²⁾	For tax return purposes at December 31, 2012, we had: (1) federal and state research and development tax credits of $18.1 million, which begin to expire in 2020; (2) alternative minimum tax credits of $2.5 million that are carried forward indefinitely; and (3) general business tax credits of $5.2 million, which begin to expire in 2029.

Unrecognized Tax Benefits Related To Uncertain Tax Positions [Table Text Block]

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



Unrecognized tax benefits at January 1, 2010	$	46,206
Gross increase to positions in prior years	2,037
Gross decrease to positions in prior years	(11,700		)
Gross increases to current period tax positions	13,743
Audit settlements	(175		)
Decrease related to lapsing of statute of limitations	(4,002		)
Effect of change in exchange rates	(2,060		)
Unrecognized tax benefits at December 31, 2010	$	44,049

Gross increase to positions in prior years	2,132
Gross decrease to positions in prior years	(16,603		)
Gross increases to current period tax positions	1,866
Audit settlements	—
Decrease related to lapsing of statute of limitations	(2,888		)
Effect of change in exchange rates	(74		)
Unrecognized tax benefits at December 31, 2011	$	28,482

Gross increase to positions in prior years	299
Gross decrease to positions in prior years	(51		)
Gross increases to current period tax positions	3,347
Audit settlements	(27		)
Decrease related to lapsing of statute of limitations	(5,769		)
Effect of change in exchange rates	152
Unrecognized tax benefits at December 31, 2012	$	26,433



	At December 31,
	2012		2011		2010
	(in thousands)
The amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate	$	25,852	$	28,196	$	32,706

We classify interest expense and penalties related to unrecognized tax benefits and interest income on tax overpayments as components of income tax expense. The net interest and penalties expense (benefit) recognized is as follows:



	Year Ended December 31,
	2012			2011			2010
	(in thousands)
Net interest and penalties expense (benefit)	$	(414	)	$	(795	)	$	498



	At December 31,
	2012		2011
	(in thousands)
Accrued interest	$	3,095	$	3,781
Accrued penalties	3,030		2,766

We believe it is reasonably possible that our unrecognized tax benefits may decrease by approximately $3.6 million within the next twelve months due to the expiration of the statute of limitations. At December 31, 2012, we are not able to reasonably estimate the timing of future cash flows relating to our uncertain tax positions.

We file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. We are subject to income tax examination by tax authorities in our major tax jurisdictions as follows:



Tax Jurisdiction		Years Subject to Audit
U.S. federal		Subsequent to 1998
France		Subsequent to 2009
Germany		Subsequent to 2007
Brazil		Subsequent to 2006
United Kingdom		Subsequent to 2006

- 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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