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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes
(In thousands) | 2020 |  | 2019 |  | 2018
Components of income before income taxes |  |  |  |  |
U.S. income | $ | 104,682 |  |  | $ | 126,552 |  |  | $ | 85,234 |
Non-U.S. income | 58,421 |  |  | 57,183 |  |  | 77,101 |
Income before income taxes | $ | 163,103 |  |  | $ | 183,735 |  |  | $ | 162,335 |
Provision for income taxes |  |  |  |  |
Current |  |  |  |  |
Federal | $ | 23,587 |  |  | $ | 13,770 |  |  | $ | 13,574 |
State | 4,896 |  |  | 5,436 |  |  | 4,265 |
Non-U.S. | 16,780 |  |  | 25,608 |  |  | 23,446 |
Total current provision | $ | 45,263 |  |  | $ | 44,814 |  |  | $ | 41,285 |
Deferred |  |  |  |  |
Federal | $ | (1,493) |  |  | $ | 5,744 |  |  | $ | 291 |
State | (727) |  |  | 1,346 |  |  | (1,604) |
Non-U.S. | (1,102) |  |  | (5,818) |  |  | (2,752) |
Total deferred provision (benefit) | (3,322) |  |  | 1,272 |  |  | (4,065) |
Provision for income taxes | $ | 41,941 |  |  | $ | 46,086 |  |  | $ | 37,220 |
The Company elected to treat Global Intangible Low Taxed Income, which was effective in 2018 for the Company, as a period cost. The Tax Cuts and Jobs Act of 2017 ("the Act"), which was signed into law on December 22, 2017, has resulted in significant changes to the U.S. corporate income tax system including reducing the U.S. corporate rate to 21% starting in 2018. The Act also creates a territorial tax system with a one-time mandatory tax on previously deferred foreign earnings of U.S. subsidiaries. On December 22, 2017, SAB 118 was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Act. In accordance with SAB 118, the Company calculated its best estimate of the impact of the Act and recorded income tax expense of $19.8 million during the fourth quarter of 2017, the period in which the legislation was enacted. Of this amount, $18.0 million related to the one-time transition tax and the remaining $1.8 million was related to the revaluation of U.S. deferred tax assets and liabilities. The Company previously considered the earnings in non-U.S. subsidiaries to be indefinitely reinvested and, accordingly, recorded no deferred income taxes. As as result of the Act, among other things, the Company determined it will repatriate earnings for all non-U.S. subsidiaries with cash in excess of working capital needs. The Company has estimated the associated tax to be $1.9 million, offset partially by $0.7 million of foreign tax credits. As of December 31, 2018, the Company had completed its accounting for all of the enactment-date income tax effects of the Act. Accordingly, we reduced our estimate for the one-time transition tax by $2.0 million and increased our estimate for the revaluation of U.S. deferred tax assets and liabilities by $2.5 million and a $2.0 million increase associated with prepaid taxes for updated regulations related to the Act. During 2018, the Company recorded $1.8 million of foreign income tax reserves related to the legal and operational realignment of our U.S., Canadian and European operations. During 2020, an additional reserve of $1.1 million was recorded related to the operating realignment of our European operations. Reconciliation of the U.S. federal income tax rates to our effective tax rate:
| 2020 |  | 2019 |  | 2018
U.S. federal income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Nondeductible compensation | 3.4 | % |  | 1.9 | % |  | 1.0 | %
Taxes on non-U.S. income | 2.6 | % |  | (0.5) | % |  | 0.4 | %
State income taxes—U.S. | 2.0 | % |  | 2.9 | % |  | 1.3 | %
Valuation allowances | 0.8 | % |  | 0.4 | % |  | 0.5 | %
Taxes on non-U.S. income - U.S., Canadian & European reorganization | 0.7 | % |  | 0.3 | % |  | 1.1 | %
Foreign exchange on entity closures | — | % |  | 1.8 | % |  | — | %
U.S. tax reform | — | % |  | — | % |  | 1.6 | %
Manufacturing deduction credit | — | % |  | — | % |  | (1.0) | %
Employee share-based payments | (3.9) | % |  | (2.6) | % |  | (1.6) | %
Research and development credit | (1.2) | % |  | (0.6) | % |  | (0.9) | %
Other | 0.3 | % |  | 0.5 | % |  | (0.5) | %
Effective income tax rate | 25.7 | % |  | 25.1 | % |  | 22.9 | %
Components of deferred tax assets and liabilities:
| December 31,
(In thousands) | 2020 |  | 2019
Deferred tax assets |  |  |
Product liability | $ | 33,689 |  |  | $ | 29,405 |
Capitalized research and development | 22,915 |  |  | 17,886 |
Employee benefits | 10,539 |  |  | 12,009 |
Net operating losses and tax credit carryforwards | 6,310 |  |  | 6,026 |
Accrued expenses and other reserves | 5,195 |  |  | 4,384 |
Share-based compensation | 3,588 |  |  | 5,396 |
Other | 5,287 |  |  | 3,828 |
Total deferred tax assets | 87,523 |  |  | 78,934 |
Valuation allowances | (7,188) |  |  | (5,937) |
Net deferred tax assets | 80,335 |  |  | 72,997 |
Deferred tax liabilities |  |  |
Goodwill and intangibles | (39,040) |  |  | (35,999) |
Property, plant and equipment | (14,649) |  |  | (11,714) |
Other | (1,897) |  |  | (2,475) |
Total deferred tax liabilities | (55,586) |  |  | (50,188) |
Net deferred taxes | $ | 24,749 |  |  | $ | 22,809 |
At December 31, 2020, we had net operating loss carryforwards of approximately $31.0 million, all of which are in non-U.S. tax jurisdictions. All net operating loss carryforwards without a valuation allowance may be carried forward for a period of at least six years. A reconciliation of the change in the tax liability for unrecognized tax benefits for the years ended December 31, 2020 and 2019 is as follows:
(In thousands) | 2020 |  | 2019
Beginning balance | $ | 5,119 |  |  | $ | 16,155 |
Adjustments for tax positions related to the current year | 425 |  |  | — |
Adjustments for tax positions related to prior years | 2,950 |  |  | (7,740) |
Statute expiration | (402) |  |  | (3,296) |
Ending balance | $ | 8,092 |  |  | $ | 5,119 |
The total amount of unrecognized tax benefits, if recognized, would reduce our future effective tax rate. We have recognized tax benefits associated with these liabilities in the amount of $2.7 million and $2.2 million at December 31, 2020 and 2019, respectively. We recognize interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. Our liability for accrued interest and penalties related to uncertain tax positions was $1.0 million and $0.5 million at December 31, 2020 and 2019, respectively. We are subject to regular review and audit by both foreign and domestic tax authorities. While we believe our tax positions will be sustained, the final outcome of tax audits and related litigation may differ materially from the tax amounts recorded in our consolidated financial statements. We file a U.S. federal income tax return along with various state and foreign income tax returns. Examinations of our U.S. federal returns have been completed through 2013, with the 2014, 2015 and 2016 tax years closed by statute. Various state and foreign income tax returns may be subject to tax audits for periods after 2014.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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