Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]

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



	Year Ended December 31,
	2015			2014			2013
	(in thousands)
Current:
Federal	$	5,033		$	17,749		$	(356	)
State and local	1,633			775			1,044
Foreign	13,945			20,269			22,153
Total current	20,611			38,793			22,841

Deferred:
Federal	3,951			(82,186		)	(14,830		)
State and local	(972		)	(979		)	(2,329		)
Foreign	(41,893		)	(51,646		)	(27,953		)
Total deferred	(38,914		)	(134,811		)	(45,112		)

Change in valuation allowance	40,402			100,053			19,805
Total provision (benefit) for income taxes	$	22,099		$	4,035		$	(2,466	)

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,
	2015			2014			2013
	(in thousands)
Income (loss) before income taxes
Domestic	$	115,526		$	86,605		$	20,583
Foreign	(78,424		)	(104,870		)	(173,983		)
Total income (loss) before income taxes	$	37,102		$	(18,265	)	$	(153,400	)

Expected federal income tax provision (benefit)	$	12,986		$	(6,393	)	$	(53,690	)
Goodwill impairment	—			119			49,730
Change in valuation allowance	40,402			100,053			19,805
Stock-based compensation	939			1,255			1,598
Foreign earnings	(33,364		)	(31,544		)	(14,015		)
Tax credits	(5,257		)	(91,148		)	(10,352		)
Uncertain tax positions, including interest and penalties	4,274			1,519			815
Change in tax rates	312			(20		)	1,442
State income tax provision (benefit), net of federal effect	(14		)	(1,235		)	(2,193		)
U.S. tax provision on foreign earnings	203			31,309			(245		)
Domestic production activities deduction	(1,100		)	(2,312		)	(146		)
Local foreign taxes	1,450			2,295			3,212
Other, net	1,268			137			1,573
Total provision (benefit) for income taxes	$	22,099		$	4,035		$	(2,466	)

Deferred Tax Assets and Liabilities [Table Text Block]

Deferred tax assets and liabilities consist of the following:



	At December 31,
	2015			2014
	(in thousands)
Deferred tax assets
Loss carryforwards⁽¹⁾	$	190,545		$	188,607
Tax credits⁽²⁾	52,131			81,903
Accrued expenses	33,546			54,393
Pension plan benefits expense	16,232			19,679
Warranty reserves	25,129			19,141
Depreciation and amortization	21,499			19,111
Equity compensation	9,303			10,039
Inventory valuation	4,068			4,420
Deferred revenue	9,097			7,506
Tax effect of accumulated translation	291			—
Other deferred tax assets, net	11,770			8,801
Total deferred tax assets	373,611			413,600
Valuation allowance	(235,339		)	(257,728		)
Total deferred tax assets, net of valuation allowance	138,272			155,872

Deferred tax liabilities
Depreciation and amortization	(27,000		)	(37,061		)
Tax effect of accumulated translation	—			(568		)
Other deferred tax liabilities, net	(3,608		)	(2,299		)
Total deferred tax liabilities	(30,608		)	(39,928		)
Net deferred tax assets	$	107,664		$	115,944

⁽¹⁾

For tax return purposes at December 31, 2015, we had U.S. federal loss carryforwards of $16.5 million that expire during the years 2020 and 2021. At December 31, 2015, we have net operating loss carryforwards in Luxembourg of $464.5 million that can be carried forward indefinitely, offset by a full valuation allowance. 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, 2015, there was a valuation allowance of $235.3 million primarily associated with foreign loss carryforwards and foreign tax credit carryforwards (discussed below).

⁽²⁾

For tax return purposes at December 31, 2015, we had: (1) U.S. general business credits of $21.9 million, which begin to expire in 2022; (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 $48.0 million, which begin to expire in 2024. At December 31, 2015, there was a valuation allowance of $31.7 million associated with foreign tax credit carryforward.

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, 2013	$	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

Gross increase to positions in prior years	2,749
Gross decrease to positions in prior years	(1,641		)
Gross increases to current period tax positions	3,008
Audit settlements	—
Decrease related to lapsing of statute of limitations	(1,715		)
Effect of change in exchange rates	(2,870		)
Unrecognized tax benefits at December 31, 2014	$	28,146

Gross increase to positions in prior years	6,461
Gross decrease to positions in prior years	(2,512		)
Gross increases to current period tax positions	25,741
Audit settlements	—
Decrease related to lapsing of statute of limitations	(908		)
Effect of change in exchange rates	(2,048		)
Unrecognized tax benefits at December 31, 2015	$	54,880



	At December 31,
	2015		2014		2013
	(in thousands)
The amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate	$	53,602	$	26,980	$	27,694

If certain unrecognized tax benefits are recognized they would create additional deferred tax assets. These assets would require a full valuation in certain locations based upon present circumstances.

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,
	2015		2014		2013
	(in thousands)
Net interest and penalties expense (benefit)	$	880	$	469	$	(1,443	)



	At December 31,
	2015		2014
	(in thousands)
Accrued interest	$	2,105	$	1,755
Accrued penalties	2,577		2,671

At December 31, 2015, we are under examination by certain tax authorities for the 2000 to 2013 tax years. The material jurisdictions where we are subject to examination for the 2000 to 2013 tax years include, among others, the U.S., France, Germany, Italy, Brazil and the United Kingdom. No material changes have occurred to previously disclosed assessments. In April 2016, the United States Internal Revenue Service (IRS) proposed certain significant adjustments to our research and development tax credit position as part of the 2011 to 2013 tax audit. Management disagrees with the proposed adjustments on technical and factual grounds. We plan to avail ourself of all administrative, and if necessary, judicial remedies and does not expect the adjustments to ultimately result in a material change to our financial position. We believe we have appropriately accrued for the expected outcome of all tax matters and do not currently anticipate that the ultimate resolution of these examinations will have a material adverse effect on our financial condition, future results of operations, or liquidity.

Based upon the timing and outcome of examinations, litigation, the impact of legislative, regulatory, and judicial developments, and the impact of these items on the statute of limitations, it is reasonably possible that the related unrecognized tax benefits could change from those recorded within the next twelve months. However, at this time, an estimate of the range of reasonably possible adjustments to the balance of unrecognized tax benefits cannot be made.

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 1999
France		Subsequent to 2009
Germany		Subsequent to 2010
Brazil		Subsequent to 2009
United Kingdom		Subsequent to 2012
Italy		Subsequent to 2007