Income Taxes Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

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



	Year Ended December 31,
	2013			2012			2011
	(in thousands)
Current:
Federal	$	145		$	11,935		$	5,472
State and local	1,089			1,387			2,045
Foreign	21,860			19,448			9,898
Total current	23,094			32,770			17,415

Deferred:
Federal	(16,413		)	12,195			17,861
State and local	(2,472		)	468			(2,099		)
Foreign	(25,872		)	(32,293		)	(42,554		)
Total deferred	(44,757		)	(19,630		)	(26,792		)

Change in valuation allowance	17,999			12,855			13,807
Total provision (benefit) for income taxes	$	(3,664	)	$	25,995		$	4,430

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,
	2013			2012			2011
	(in thousands)
Income (loss) before income taxes
Domestic	$	19,016		$	167,299		$	125,010
Foreign	(167,270		)	(31,080		)	(626,776		)
Total income (loss) before income taxes	$	(148,254	)	$	136,219		$	(501,766	)

Expected federal income tax provision (benefit)	$	(51,889	)	$	47,677		$	(175,618	)
Goodwill impairment	49,730			(1,905		)	207,054
Change in valuation allowance	17,999			12,855			13,807
Luxembourg net operating loss	(5,443		)	(12,767		)	(5,289		)
Stock-based compensation	1,598			1,787			951
Foreign earnings	(10,212		)	(23,769		)	(19,222		)
Tax credits	(10,352		)	(2,174		)	(6,877		)
Uncertain tax positions, including interest and penalties	1,360			(2,740		)	(3,996		)
Change in tax rates	1,442			174			(1,522		)
State income tax provision (benefit), net of federal effect	(2,291		)	1,242			(768		)
U.S. tax provision on foreign earnings	(245		)	2,370			—
Domestic production activities deduction	(146		)	(2,612		)	(4,313		)
Local foreign taxes	3,212			3,635			3,525
Other, net	1,573			2,222			(3,302		)
Total provision for income taxes	$	(3,664	)	$	25,995		$	4,430

Deferred Tax Assets and Liabilities [Table Text Block]

Deferred tax assets and liabilities consist of the following:



	At December 31,
	2013			2012
	(in thousands)
Deferred tax assets
Loss carryforwards⁽¹⁾	$	174,360		$	164,254
Accrued expenses	40,593			32,998
Depreciation and amortization	16,770			9,632
Warranty reserves	16,704			16,712
Tax credits⁽²⁾	16,073			7,054
Pension plan benefits expense	13,464			14,834
Equity compensation	9,908			10,501
Inventory valuation	2,942			4,557
Other deferred tax assets, net	9,858			5,824
Total deferred tax assets	300,672			266,366
Valuation allowance	(161,026		)	(138,910		)
Total deferred tax assets, net of valuation allowance	139,646			127,456

Deferred tax liabilities
Depreciation and amortization	(50,606		)	(59,210		)
Tax effect of accumulated translation	(1,551		)	(2,012		)
Other deferred tax liabilities, net	(2,883		)	(4,826		)
Total deferred tax liabilities	(55,040		)	(66,048		)
Net deferred tax assets	$	84,606		$	61,408

⁽¹⁾

For tax return purposes at December 31, 2013, we had U.S. federal loss carryforwards of $23.1 million that expire during the years 2020 and 2021. At December 31, 2013, we have net operating loss carryforwards in Luxembourg of $408.1 million that can be carried forward indefinitely, offset by a full valuation allowance (see discussion below). The remaining portion of the loss carryforwards are composed primarily of losses in various other foreign jurisdictions. The majority of these losses can be carried forward indefinitely. At December 31, 2013, there was a valuation allowance of $161.0 million primarily associated with foreign loss carryforwards.


⁽²⁾	For tax return purposes at December 31, 2013, we had: (1) U.S. general business credits of $28.0 million, which begin to expire in 2021; (2) U.S. alternative minimum tax credits of $2.5 million that can be carried forward indefinitely; and (3) U.S. foreign tax credits of $900,000, which begin to expire in 2019.

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, 2011	$	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

Gross increase to positions in prior years	2,154
Gross decrease to positions in prior years	(536		)
Gross increases to current period tax positions	1,670
Audit settlements	—
Decrease related to lapsing of statute of limitations	(817		)
Effect of change in exchange rates	(289		)
Unrecognized tax benefits at December 31, 2013	$	28,615



	At December 31,
	2013		2012		2011
	(in thousands)
The amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate	$	27,694	$	25,852	$	28,196

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,
	2013			2012			2011
	(in thousands)
Net interest and penalties expense (benefit)	$	(898	)	$	(414	)	$	(795	)



	At December 31,
	2013		2012
	(in thousands)
Accrued interest	$	2,078	$	3,095
Accrued penalties	3,075		3,030

We believe it is reasonably possible that our unrecognized tax benefits may decrease by approximately $2.1 million within the next twelve months due to the expiration of the statute of limitations. At December 31, 2013, 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 2007
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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