Income Taxes and Uncertain Tax Positions

3 Months Ended

Mar. 31, 2015

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 7 – Income Taxes and Uncertain Income Tax Positions

The Company’s first quarter of 2015 effective tax rate was 30.8%, as compared to an effective tax rate of 34.8% for the first quarter of 2014. The primary contributors to the decrease in the current quarter’s effective tax rate were lower changes in reserves related to uncertain tax positions in the first quarter of 2015 and certain one-time items that increased the first quarter of 2014’s effective tax rate.

As of March 31, 2015, the Company’s cumulative liability for gross unrecognized tax benefits was $11,092. At December 31, 2014, the Company’s cumulative liability for gross unrecognized tax benefits was $11,845.

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 Statements of Income. The Company recognized ($218)for interest and $73 for penalties on its Condensed Consolidated Statement of Income for the three months endedMarch 31, 2015, and ($212) for interest and ($9) for penalties on its Condensed Consolidated Statement of Income during the three months endedMarch 31, 2014. As of March 31, 2015, the Company had accrued $1,473 for cumulative interest and $1,722 for cumulative penalties, compared to $1,868 for cumulative interest and $1,845 for cumulative penalties accrued at December 31, 2014.

During the three months endedMarch 31, 2015 and March 31, 2014, the Company recognized decreases of approximately $741 and $1,075, 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, 2015 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 with regard to certain tax positions. 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, 2015.

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, Italy from 2007, the Netherlands and the United Kingdom from 2009, Spain and China from 2010, the United States from 2011, and various domestic state tax jurisdictions from 1993.

During 2012, the Italian tax authorities initiated a transfer pricing audit of the Company’s Italian subsidiary relating to the tax years 2007, 2008, 2009 and 2010, but has only formally assessed the tax years 2007, 2008 and 2009. The Company is pursuing its administrative remedies to appeal these assessments. There have been no significant developments during the first quarter of 2015 related to these tax assessments. With respect to the Italian income tax assessment for 2007, the Company has established a reserve for uncertain tax positions and does not expect a material difference from this reserve as of March 31, 2015. Related to the assessments for 2008 and 2009, the Company and outside counsel believe it should prevail on the merits of each case.  Therefore, the Company does not believe it has exposure warranting an uncertain tax position reserve as of March 31, 2015.