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Income Taxes and Uncertain Tax Positions
3 Months Ended
Mar. 31, 2014
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]

Note 7 – Income Taxes and Uncertain Income Tax Positions

The Company's first quarter of 2014 effective tax rate was 34.8%, as compared to an effective tax rate of 24.1% for the first quarter of 2013. Both effective tax rates reflect decreases in reserves for uncertain tax positions due to the expiration of applicable statutes of limitations for certain tax years of approximately $0.02 and $0.10 per diluted share for the three months ended March 31, 2014 and March 31, 2013, respectively. Also, contributing to the difference in the effective tax rate from the prior year is the recognition of certain one-time items that increased the current quarter's effective tax rate.

As of March 31, 2014, the Company's cumulative liability for gross unrecognized tax benefits was $12,299. At December 31, 2013, the Company's cumulative liability for gross unrecognized tax benefits was $12,596.

The Company continues to recognize interest and penalties associated with uncertain tax positions as a component of taxes on income before equity in net income of associated companies in its Condensed Consolidated Statement of Income. The Company recognized ($212) for interest and ($9) for penalties on its Condensed Consolidated Statement of Income for the three months ended March 31, 2014, and ($477) for interest and $93 for penalties on its Condensed Consolidated Statement of Income during the three months ended March 31, 2013. As of March 31, 2014, the Company had accrued $1,895 for cumulative interest and $2,088 for cumulative penalties, compared to $2,108 for cumulative interest and $2,100 for cumulative penalties accrued at December 31, 2013.

During the three months ended March 31, 2014 and March 31, 2013, the Company recognized decreases of approximately $1,075 and $1,687, respectively, in its cumulative liability for gross unrecognized tax benefits due to the expiration of the applicable statutes of limitations for certain tax years.

The Company estimates that during the year ending December 31, 2014 it will reduce its cumulative liability for gross unrecognized tax benefits by approximately $1,800 to $1,900 due to the expiration of the statute of limitations for certain tax years. This estimated reduction in the cumulative liability for unrecognized tax benefits does not consider any increase in liability for unrecognized tax benefits with regard to existing tax positions or any increase in cumulative liability for unrecognized tax benefits with regard to new tax positions for the year ending December 31, 2014.

The Company and its subsidiaries are subject to U.S. Federal income tax, as well as the income tax of various state and foreign tax jurisdictions. Tax years that remain subject to examination by major tax jurisdictions include Brazil from 2000, the Netherlands and the United Kingdom from 2008, Spain from 2009, the United States, China and Italy from 2010, and various domestic state tax jurisdictions from 1993.

During the second quarter of 2012, the Italian tax authorities initiated a transfer pricing audit of the Company's Italian subsidiary. On July 7, 2012, the Company received a preliminary tax report related to this transfer pricing audit, which proposed several adjustments to the taxable income of the subsidiary. During the fourth quarter of 2012, the Company's Italian subsidiary received an assessment for the tax year 2007, which the Company appealed during the first quarter of 2013. On June 24, 2013, a hearing was held before the Provincial Tax Court of Varese, Italy. On September 16, 2013, the Provincial Tax Court of Varese delivered a decision confirming the Italian tax authorities' proposed adjustment to the taxable income of the subsidiary, but denying the proposed assessment of penalties. On January 24, 2014, the Company's Italian subsidiary appealed the decision of the Provincial Tax Court of Varese. On March 7, 2014, the Italian tax authorities appealed the decision of the Provincial Tax Court denying the assessment of penalties.

On November 29, 2013, the Italian tax authorities issued a tax assessment for the tax year 2008, raising identical issues as the assessment for 2007, noted above. On March 28, 2014, the Company filed an appeal with the Provincial Tax Court of Varese. The Company intends to apply for competent authority relief between the Italian and Dutch tax authorities.

Related to each of the above events, the Company and outside counsel believe we should prevail on the merits of each case.  Therefore, the Company does not believe it has any exposures warranting an uncertain tax position reserve as of March 31, 2014.