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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

INCOME TAXES

Schedule of domestic and foreign components of the income before provision for income taxes

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
​		2019			2018			2017
Domestic*	​	$	1,196,883	​	$	1,100,487	​	$	1,062,713
Foreign*	​		219,079	​		192,785	​		138,910
Income before provision for income taxes	​	$	1,415,962	​	$	1,293,272	​	$	1,201,623

​

*After intercompany royalties, management fees and interest charges from the Company’s domestic to foreign entities of $51.2 million, $40.5 million and $42.5 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Components of the provision for income taxes

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
​		2019			2018			2017
Current:	​	​	​	​	​	​	​	​	​
Federal	​	$	212,068	​	$	209,147	​	$	243,127
State	​		39,982	​		41,934	​		43,252
Foreign	​		55,167	​		42,541	​		27,522
​	​		307,217	​		293,622	​		313,901
​	​	​	​	​	​	​	​	​	​
Deferred:	​	​	​	​	​	​	​	​	​
Federal	​		8,320	​		9,804	​		61,797
State	​		(6,878)	​		1,644	​		3,062
Foreign	​		(4,219)	​		(8,778)	​		(4,579)
​	​		(2,777)	​		2,670	​		60,280
​	​	​	​	​	​	​	​	​	​
Valuation allowance	​		3,687	​		3,976	​		6,764
​	​	$	308,127	​	$	300,268	​	$	380,945

Schedule of reconciliation of income taxes computed at statutory federal rate to total income taxes

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
​		2019			2018			2017
U.S. Federal tax expense at statutory rates	​	$	297,352	​	$	271,587	​	$	420,568
State income taxes, net of federal tax benefit	​		30,098	​		36,312	​		27,569
Permanent differences	​		(2,128)	​		3,606	​		10,356
Stock based compensation	​	​	(13,473)	​	​	(370)	​	​	(79,687)
Domestic production deduction	​		—	​		—	​		(22,229)
Deferred tax asset reduction (Tax Reform Act)	​	​	—	​	​	—	​	​	39,763
Other	​		(12,423)	​		(8,438)	​		3,736
Foreign rate differential	​		5,014	​		(6,405)	​		(25,895)
Valuation allowance	​		3,687	​		3,976	​		6,764
​	​	$	308,127	​	$	300,268	​	$	380,945

Components of the deferred tax assets (liabilities)

​

​	​	​	​	​	​	​
​		2019			2018
Deferred Tax Assets:	​	​	​	​	​	​
Reserve for sales returns	​	$	140	​	$	137
Reserve for inventory obsolescence	​		2,066	​		2,836
Reserve for marketing development fund	​		8,469	​		4,666
Capitalization of inventory costs	​		2,310	​		1,210
State franchise tax - current	​		2,346	​		2,663
Accrued compensation	​		1,944	​		574
Accrued other liabilities	​		5,674	​		5,276
Deferred revenue	​		81,903	​		87,573
Stock-based compensation	​		22,665	​		25,439
Foreign net operating loss carryforward	​		30,187	​		28,030
Prepaid supplies	​		5,799	​		7,476
Termination payments	​		69,467	​		71,918
Operating lease liabilities	​		6,155	​		—
Other deferred tax assets	​	​	17,615	​	​	11,010
Total gross deferred tax assets	​	$	256,740	​	$	248,808
​	​	​	​	​	​	​
Deferred Tax Liabilities:	​	​	​	​	​	​
Amortization of trademarks	​	$	(35,227)	​	$	(31,445)
Intangibles	​		(76,047)	​		(82,544)
State franchise tax - deferred	​		(7,173)	​		(7,093)
Operating lease ROU assets	​	​	(6,155)	​	​	—
Other deferred tax liabilities	​		(93)	​		(99)
Depreciation	​		(6,765)	​		(5,123)
Total gross deferred tax liabilities	​		(131,460)	​		(126,304)
​	​	​	​	​	​	​
Valuation Allowance	​		(40,503)	​		(36,816)
​	​	​	​	​	​	​
Net deferred tax assets	​	$	84,777	​	$	85,688

Schedule of roll-forward of the total gross unrecognized tax benefits, not including interest and penalties

​

​	​	​	​
​		Gross Unrecognized Tax
​	​	Benefits
Balance at January 1, 2017	​	$	9
Additions for tax positions related to the current year	​		—
Additions for tax positions related to the prior year	​		6,540
Decreases for tax positions related to prior years	​		(9)
Balance at December 31, 2017	​	$	6,540
Additions for tax positions related to the current year	​	​	—
Additions for tax positions related to the prior year	​	​	1,159
Decreases for tax positions related to prior years	​	​	(2,664)
Balance at December 31, 2018	​	$	5,035
Additions for tax positions related to the current year	​	​	—
Additions for tax positions related to the prior year	​	​	1,833
Decreases for tax positions related to prior years	​	​	(3,875)
Balance at December 31, 2019	​	$	2,993

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

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Tabular disclosure for 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 and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months.

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