XML 33 R18.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Income Taxes | 12 Months Ended
--- | ---
Jun. 30, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The Tax Cuts and Jobs Act of 2017 (“Tax Act”) was signed into law on December 22, 2017 with an effective date of January 1, 2018. Most notably, the Tax Act reduced the statutory federal income tax rate for corporations from 35% to 21%. Since we file our tax return based on our fiscal year, the statutory federal income tax rate for our 2018 tax return will be a blended rate of 28.1%. In addition to the effect of the lower overall federal tax rate, the Tax Act resulted in a $9.5 million one-time benefit for the re-measurement of our net deferred tax liability in 2018. The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) on December 22, 2017. SAB 118 allows for a measurement period in which companies can either use provisional estimates for changes resulting from the Tax Act or apply the tax laws that were in effect immediately prior to the Tax Act being enacted if estimates cannot be determined at the time of the preparation of the financial statements until the actual impacts can be determined. We recorded an estimate of the impact of the Tax Act within our December 31, 2017 financial statements, including the impact of items recorded within accumulated other comprehensive loss. There were no material changes to these estimates in the six months ended June 30, 2018. We will continue to evaluate the impacts of the Tax Act and record adjustments, as needed, including adjustments related to the filing of our 2018 federal tax return, but do not expect material changes to the amounts recorded. In February 2018, the FASB issued new accounting guidance to allow a reclassification from accumulated other comprehensive income/loss to retained earnings for stranded tax effects resulting from the Tax Act. We recorded this reclassification in the quarter ended March 31, 2018. See further discussion under the caption “Recently Adopted Accounting Standards” in Note 1. We file a consolidated federal income tax return. Taxes based on income for the years ended June 30 have been provided as follows:
| 2018 |  | 2017 |  | 2016
Currently payable: |  |  |  |  |
Federal | $ | 40,766 |  |  | $ | 51,524 |  |  | $ | 57,116 |
State and local | 7,355 |  |  | 6,319 |  |  | 6,502 |
Total current provision | 48,121 |  |  | 57,843 |  |  | 63,618 |
Deferred federal, state and local (benefit) provision | (9,232 | ) |  | 2,359 |  |  | (749 | )
Total taxes based on income | $ | 38,889 |  |  | $ | 60,202 |  |  | $ | 62,869 |
In 2018, we adopted new accounting guidance for stock-based compensation. One of the changes resulting from this new guidance is the inclusion of the tax consequences related to stock-based compensation within the computation of income tax expense versus equity. We adopted this provision on a prospective basis. Prior to 2018, certain tax benefits were recorded directly to common stock, and these amounts totaled $1.1 million and $1.4 million for 2017 and 2016, respectively. For the years ended June 30, our effective tax rate varied from the statutory federal income tax rate as a result of the following factors:
| 2018 |  | 2017 |  | 2016
Statutory rate | 28.1 | % |  | 35.0 | % |  | 35.0 | %
State and local income taxes | 3.0 |  |  | 2.4 |  |  | 2.3 |
One-time benefit on re-measurement of net deferred tax liability | (5.5 | ) |  | — |  |  | — |
Domestic manufacturing deduction for qualified income | (2.3 | ) |  | (2.8 | ) |  | (3.0 | )
Net windfall tax benefits - stock-based compensation | (0.4 | ) |  | — |  |  | — |
ESOP dividend deduction | (0.1 | ) |  | (0.1 | ) |  | (0.4 | )
Other | (0.5 | ) |  | (0.2 | ) |  | 0.2 |
Effective rate | 22.3 | % |  | 34.3 | % |  | 34.1 | %
Our net deferred tax liability for all periods presented in the Consolidated Balance Sheets has been classified as noncurrent. The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at June 30 were comprised of:
| 2018 |  | 2017
Deferred tax assets: |  |  |
Employee medical and other benefits | $ | 6,407 |  |  | $ | 10,349 |
Receivables | 3,992 |  |  | 5,314 |
Inventories | 1,112 |  |  | 1,041 |
Other accrued liabilities | 1,029 |  |  | 1,905 |
Total deferred tax assets | 12,540 |  |  | 18,609 |
Deferred tax liabilities: |  |  |
Property, plant and equipment | (15,551 | ) |  | (22,188 | )
Intangible assets | (8,518 | ) |  | (14,070 | )
Goodwill | (5,044 | ) |  | (7,092 | )
Other | (231 | ) |  | (466 | )
Total deferred tax liabilities | (29,344 | ) |  | (43,816 | )
Net deferred tax liability | $ | (16,804 | ) |  | $ | (25,207 | )
Prepaid federal income taxes of $3.6 million and $6.1 million were included in Other Current Assets at June 30, 2018 and 2017, respectively. Prepaid state and local income taxes of $0.9 million were included in Other Current Assets at June 30, 2018 and 2017. Net cash payments for income taxes for each of the years ended June 30 were as follows:
| 2018 |  | 2017 |  | 2016
Net cash payments for income taxes | $ | 46,198 |  |  | $ | 59,008 |  |  | $ | 62,901 |
The gross tax contingency reserve at June 30, 2018 was $1.3 million and consisted of estimated tax liabilities of $0.7 million and interest and penalties of $0.6 million. The unrecognized tax benefits recorded as the gross tax contingency reserve noted in the following table for June 30, 2018 and 2017 would affect our effective tax rate, if recognized. The following table sets forth changes in our total gross tax contingency reserve (including interest and penalties):
| 2018 |  | 2017
Balance, beginning of year | $ | 1,808 |  |  | $ | 1,599 |
Tax positions related to the current year: |  |  |
Additions | 12 |  |  | 82 |
Reductions | — |  |  | — |
Tax positions related to prior years: |  |  |
Additions | 86 |  |  | 153 |
Reductions | (41 | ) |  | (26 | )
Lapse of statute of limitations | (567 | ) |  | — |
Settlements | — |  |  | — |
Balance, end of year | $ | 1,298 |  |  | $ | 1,808 |
We have not classified any of the gross tax contingency reserve at June 30, 2018 in Accrued Liabilities as none of these amounts are expected to be resolved within the next 12 months. Consequently, the entire liability of $1.3 million was included in Other Noncurrent Liabilities. We expect that the amount of these liabilities will change within the next 12 months; however, we do not expect the change to have a significant effect on our financial position or results of operations. We recognize interest and penalties related to these tax liabilities in income tax expense. For each of the years ended June 30, we recognized the change in the accrual for net tax-related interest and penalties as follows:
| 2018 |  | 2017
(Benefit) expense recognized for net tax-related interest and penalties | $ | (78 | ) |  | $ | 112 |
We had accrued interest and penalties at June 30 as follows:
| 2018 |  | 2017
Accrued interest and penalties included in the gross tax contingency reserve | $ | 605 |  |  | $ | 683 |
We file federal and various state and local income tax returns in the United States. With limited exceptions, we are no longer subject to examination of U.S. federal or state and local income taxes for years prior to 2015. The American Jobs Creation Act provided a tax deduction calculated as a percentage of qualified income from manufacturing in the United States. The deduction percentage for 2018 was 9%. In accordance with FASB guidance, this deduction is treated as a special deduction, as opposed to a tax rate reduction and is properly reflected in the effective tax rate table. This deduction was repealed by the Tax Act. Therefore, 2018 is the final year that we will be able to claim this deduction.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration