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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES We are subject to federal income tax in the U.S. and Canada as well as income tax within multiple U.S. state jurisdictions. We provide for income taxes based on the enacted tax laws and rates in the jurisdictions in which we conduct our operations. These jurisdictions may have regimes of taxation that vary with respect to nominal rates and with respect to the basis on which these rates are applied. This variation, along with the changes in our mix of income within these jurisdictions, can contribute to shifts in our effective tax rate from period to period. We are currently under audit by various state and international authorities. With few exceptions, we do not have any returns under examination for years prior to 2017. We apply the provisions of FASB Topic Income Taxes regarding the treatment of uncertain tax positions. A reconciliation of unrecognized tax benefits (exclusive of interest and federal and state benefits) is as follows:
|  | Year Ended December 31,
|  | 2020 |  | 2019 |  | 2018
|  | (In thousands)
Balance at beginning of period |  | $ | 3,899 |  |  | $ | 274 |  |  | $ | 1,680 |
Increases based on tax positions taken in the current year |  | 2,075 |  |  | 3,736 |  |  | — |
Increases based on tax positions taken in the prior years |  | — |  |  | — |  |  | — |
Decreases based on tax positions taken in the prior years |  | — |  |  | — |  |  | — |
Decreases due to settlements with tax authorities |  | — |  |  | — |  |  | — |
Decreases due to lapse of applicable statute of limitation |  | (123) |  |  | (127) |  |  | (1,379) |
Other, net |  | 1 |  |  | 16 |  |  | (27) |
Balance at end of period |  | $ | 5,852 |  |  | $ | 3,899 |  |  | $ | 274 |
The unrecognized tax benefits balance of $5.9 million at December 31, 2020 would reduce our effective tax rate if recognized. We believe that, within the next 12 months, it is reasonably possible that our entire previously unrecognized tax benefits will be resolved with the appropriate taxing jurisdiction. Deferred income taxes reflect the net tax effects of temporary differences between the financial and tax bases of assets and liabilities. Significant components of deferred tax assets and liabilities as of December 31, 2020 and 2019 were as follows:
|  | December 31,
|  | 2020 |  | 2019
|  | (In thousands)
Deferred tax assets: |  |  |  |
Pension liability |  | $ | 31,152 |  |  | $ | 36,791 |
Accrued warranty expense |  | 1,338 |  |  | 2,365 |
Accrued vacation pay |  | 7,442 |  |  | 7,077 |
Accrued liabilities for self-insurance (including postretirement health care benefits) |  | 2,602 |  |  | 2,991 |
Accrued liabilities for executive and employee incentive compensation |  | 13,312 |  |  | 12,121 |
Environmental and products liabilities |  | 20,261 |  |  | 20,100 |
Lease liabilities |  | 2,155 |  |  | 1,856 |
Investments in joint ventures and affiliated companies |  | 1,148 |  |  | 4,702 |
Long-term contracts |  | 15,974 |  |  | 10,790 |
Accrued payroll taxes |  | 4,828 |  |  | — |
U.S. federal tax credits and loss carryforward |  | 7,224 |  |  | 4,177 |
U.S. state tax credits and loss carryforward |  | 6,819 |  |  | 7,297 |
Foreign tax credit and loss carryforward |  | 9,919 |  |  | 5,848 |
Other |  | 4,961 |  |  | 4,621 |
Total deferred tax assets |  | 129,135 |  |  | 120,736 |
Valuation allowance for deferred tax assets |  | (12,892) |  |  | (13,578) |
Deferred tax assets |  | 116,243 |  |  | 107,158 |
Deferred tax liabilities: |  |  |  |
Property, plant and equipment |  | 39,315 |  |  | 23,889 |
Right-of-use lease assets |  | 10,509 |  |  | 10,446 |
Intangibles |  | 17,004 |  |  | 14,134 |
Total deferred tax liabilities |  | 66,828 |  |  | 48,469 |
Net deferred tax assets |  | $ | 49,415 |  |  | $ | 58,689 |
The components of Income before Provision for Income Taxes were as follows:
|  | Year Ended December 31,
|  | 2020 |  | 2019 |  | 2018
|  | (In thousands)
U.S. |  | $ | 314,150 |  |  | $ | 270,569 |  |  | $ | 231,721 |
Other than U.S. |  | 48,022 |  |  | 43,173 |  |  | 48,424 |
Income before Provision for Income Taxes |  | $ | 362,172 |  |  | $ | 313,742 |  |  | $ | 280,145 |
The components of Provision for Income Taxes were as follows:
|  | Year Ended December 31,
|  | 2020 |  | 2019 |  | 2018
|  | (In thousands)
Current: |  |  |  |  |  |
U.S. – federal |  | $ | 53,340 |  |  | $ | 47,693 |  |  | $ | 14,680 |
U.S. – state and local |  | 7,587 |  |  | 2,180 |  |  | 4,597 |
Other than U.S. |  | 14,159 |  |  | 15,398 |  |  | 16,117 |
Total current |  | 75,086 |  |  | 65,271 |  |  | 35,394 |
Deferred: |  |  |  |  |  |
U.S. – federal |  | 10,852 |  |  | 7,975 |  |  | 20,327 |
U.S. – state and local |  | (536) |  |  | 872 |  |  | 1,564 |
Other than U.S. |  | (2,426) |  |  | (5,053) |  |  | (4,445) |
Total deferred |  | 7,890 |  |  | 3,794 |  |  | 17,446 |
Provision for Income Taxes |  | $ | 82,976 |  |  | $ | 69,065 |  |  | $ | 52,840 |
The following is a reconciliation of our income tax provision from the U.S. statutory federal tax rate to our consolidated effective tax rate:
|  | Year Ended December 31,
|  | 2020 |  | 2019 |  | 2018
U.S. federal statutory tax rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State and local income taxes |  | 1.9 | % |  | 1.0 | % |  | 2.1 | %
Foreign rate differential |  | 0.6 | % |  | 0.6 | % |  | 0.7 | %
Excess tax deductions on equity compensation |  | (0.3) | % |  | (0.7) | % |  | (1.0) | %
Impact of U.S. Tax Cuts & Jobs Act |  | — | % |  | — | % |  | (4.7) | %
Other |  | (0.3) | % |  | 0.1 | % |  | 0.8 | %
Effective tax rate |  | 22.9 | % |  | 22.0 | % |  | 18.9 | %
In the year ended December 31, 2018, we recognized $13.5 million of benefit in our provision for income taxes related to the remeasurement of our deferred tax assets as a result of accelerating additional contributions to certain of our domestic pension plans for inclusion in our 2017 U.S. tax return. At December 31, 2020, we had a valuation allowance of $12.9 million for deferred tax assets, which we expect cannot be realized through carrybacks, future reversals of existing taxable temporary differences and our estimate of future taxable income. We believe that our remaining deferred tax assets are more likely than not realizable through carrybacks, future reversals of existing taxable temporary differences and our estimate of future taxable income. Any changes to our estimated valuation allowance could be material to our consolidated financial statements. The following is an analysis of our valuation allowance for deferred tax assets:
|  | Beginning Balance |  | Charges To Costs and Expenses |  | Charged To Other Accounts |  | Ending Balance
|  | (In thousands)
Year Ended December 31, 2020 |  | $ | (13,578) |  |  | 771 |  |  | (85) |  |  | $ | (12,892) |
Year Ended December 31, 2019 |  | $ | (13,257) |  |  | (414) |  |  | 93 |  |  | $ | (13,578) |
Year Ended December 31, 2018 |  | $ | (15,252) |  |  | 2,017 |  |  | (22) |  |  | $ | (13,257) |
We have federal capital losses of $7.2 million available to offset future capital gains. These federal capital losses begin to expire in the year 2023. We are carrying a full valuation allowance of $7.2 million against the deferred tax asset related to these federal capital loss carryforwards. In addition, we have state credits and state net operating losses of $8.6 million ($6.8 million net of federal tax benefit) available to offset future taxable income in various states. These state net operating loss carryforwards begin to expire in the year 2021. We are carrying a valuation allowance of $7.2 million ($5.7 million net of federal tax benefit) against the deferred tax asset related to the state credits and state loss carryforwards. We would be subject to withholding taxes if we were to distribute earnings from certain foreign subsidiaries. As of December 31, 2020, the undistributed earnings of these subsidiaries were approximately $209.8 million, and our unrecognized deferred income tax liabilities of approximately $10.5 million would be payable upon the distribution of these earnings. All of our foreign earnings are considered indefinitely reinvested.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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