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Taxes on Income | 12 Months Ended
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Dec. 31, 2018
Taxes on Income [Abstract] |
Taxes on Income |
(8) | Taxes on Income
Earnings before taxes on income and details of the provision for taxes on income for the years ended December 31, 2018, 2017 and 2016 were as follows (in thousands):
|  | 2018 |  |  | 2017 |  |  | 2016 |
Earnings (loss) before taxes on income: |  |  |  |  |  |  |  |  |
United States |  | $ | 117,800 |  |  | $ | 74,267 |  |  | $ | 227,746 |
Foreign |  |  | (3,641 | ) |  |  | (1,253 | ) |  |  | — |
|  | $ | 114,159 |  |  | $ | 73,014 |  |  | $ | 227,746 |
Provision (benefit) for taxes on income: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal: |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | — |  |  | $ | 11,143 |  |  | $ | 28,919 |
Deferred |  |  | 27,102 |  |  |  | (258,703 | ) |  |  | 49,685 |
|  | $ | 27,102 |  |  | $ | (247,560 | ) |  | $ | 78,604 |
U.S. State: |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | (243 | ) |  | $ | 3,861 |  |  | $ | 4,727 |
Deferred |  |  | 7,619 |  |  |  | 2,280 |  |  |  | 1,611 |
|  | $ | 7,376 |  |  | $ | 6,141 |  |  | $ | 6,338 |
Foreign: |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 443 |  |  | $ | 370 |  |  | $ | — |
Deferred |  |  | 160 |  |  |  | 160 |  |  |  | — |
|  | $ | 603 |  |  | $ | 530 |  |  | $ | — |
Consolidated: |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 200 |  |  | $ | 15,374 |  |  | $ | 33,646 |
Deferred |  |  | 34,881 |  |  |  | (256,263 | ) |  |  | 51,296 |
|  | $ | 35,081 |  |  | $ | (240,889 | ) |  | $ | 84,942 |
In 2018, the Company filed its 2017 US tax return and completed its analysis of the income tax impacts of the Tax Cuts and Jobs Act which was signed into law on December 22, 2017. There are no material changes to the income tax effects to those previously reported in 2017. The Company’s provision for taxes on income varied from the statutory federal income tax rate for the years ended December 31, 2018, 2017 and 2016 due to the following:
|  | 2018 |  |  | 2017 |  |  | 2016 |
United States income tax statutory rate |  |  | 21.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State and local taxes, net of federal benefit |  |  | 6.5 |  |  |  | 0.9 |  |  |  | 1.8 |
Change due to U.S. tax reform |  |  | — |  |  |  | (369.0 | ) |  |  | — |
Other – net |  |  | 3.2 |  |  |  | 3.2 |  |  |  | 0.5 |
|  |  | 30.7 | % |  |  | (329.9 | )% |  |  | 37.3 | %
The tax effects of temporary differences that give rise to significant portions of the non-current deferred tax assets and liabilities at December 31, 2018 and 2017 were as follows (in thousands):
|  | 2018 |  |  | 2017 |
Non-current deferred tax assets and liabilities: |  |  |  |  |  |
Deferred tax assets: |  |  |  |  |  |
Allowance for doubtful accounts |  | $ | 2,105 |  |  | $ | 1,875 |
Inventory |  |  | 5,017 |  |  |  | 3,795 |
Insurance accruals |  |  | 4,119 |  |  |  | 4,599 |
Deferred compensation |  |  | 1,291 |  |  |  | 1,849 |
Unrealized loss on defined benefit plans |  |  | 9,891 |  |  |  | 11,097 |
Operating loss carryforwards |  |  | 81,867 |  |  |  | 15,540 |
Pension benefits |  |  | 6,559 |  |  |  | 549 |
Other |  |  | 22,421 |  |  |  | 16,301 |
|  |  | 133,270 |  |  |  | 55,605 |
Valuation allowances |  |  | (25,568 | ) |  |  | (15,308 | )
|  |  | 107,702 |  |  |  | 40,297 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property |  |  | (526,873 | ) |  |  | (428,947 | )
Deferred state taxes |  |  | (74,638 | ) |  |  | (58,366 | )
Goodwill and other intangibles |  |  | (34,235 | ) |  |  | (9,015 | )
Other |  |  | (14,741 | ) |  |  | (12,420 | )
|  |  | (650,487 | ) |  |  | (508,748 | )
|  | $ | (542,785 | ) |  | $ | (468,451 | )
During 2018, the Company generated a net operating loss mainly caused by taking the full cost deduction of purchased fixed assets. The deferred tax assets of $18,922,000 has been recorded at December 31, 2018 and can be utilized by future taxable income indefinitely. The Company also inherited a $35,133,000 historical net operating loss of Higman, which was acquired in February 2018 and more fully described in Note 3, Acquisitions. The Higman loss will expire in various amounts through 2037. After conducting loss utilization limit and future gain recognition research, the Company has determined that it is more likely than not that all federal deferred tax assets at December 31, 2018 will be realized. The Company had state operating loss deferred tax assets of $19,039,000 in 2018 and $9,289,000 in 2017. The valuation allowance for state deferred tax assets as of December 31, 2018 and 2017 was $17,027,000 and $9,289,000, respectively, related to the Company’s state net operating loss carryforwards based on the Company’s determination that it is more likely than not that the deferred tax assets will not be realized. Expiration of these state net operating loss carryforwards vary by state through 2037 and none will expire in fiscal 2019. As of December 31, 2018, the Company had a Canadian net operating loss carryforward of $8,541,000 which expires in 2038. A full valuation allowance has been provided for this asset. The Company or one of its subsidiaries files income tax returns in the United States federal jurisdiction and various state jurisdictions. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the 2015 through 2017 tax years. With few exceptions, the Company and its subsidiaries’ state income tax returns are open to audit under the statute of limitations for the 2012 through 2017 tax years. As of December 31, 2018, the Company has provided a liability of $1,909,000 for unrecognized tax benefits related to various income tax issues which includes interest and penalties. The amount that would impact the Company’s effective tax rate, if recognized, is $1,182,000, with the difference between the total amount of unrecognized tax benefits and the amount that would impact the effective tax rate being primarily related to the federal tax benefit of state income tax items. It is not reasonably possible to determine if the liability for unrecognized tax benefits will significantly change prior to December 31, 2019 due to the uncertainty of possible examination results. A reconciliation of the beginning and ending amount of the liability for unrecognized tax benefits for the years ended December 31, 2018, 2017 and 2016, is as follows (in thousands):
|  | 2018 |  |  | 2017 |  |  | 2016 |
Balance at beginning of year |  | $ | 1,787 |  |  | $ | 2,019 |  |  | $ | 1,958 |
Additions based on tax positions related to the current year |  |  | 254 |  |  |  | 403 |  |  |  | 187 |
Additions for tax positions of prior years |  |  | 70 |  |  |  | 273 |  |  |  | 867 |
Reductions for tax positions of prior years |  |  | (668 | ) |  |  | (908 | ) |  |  | (441 | )
Settlements |  |  | — |  |  |  | — |  |  |  | (552 | )
Balance at end of year |  | $ | 1,443 |  |  | $ | 1,787 |  |  | $ | 2,019 |
The Company accounts for interest and penalties related to uncertain tax positions as part of its provision for federal and state income taxes. The Company recognized net benefit of $209,000 in interest and penalties for the year ended December 31, 2018 and net expense of $120,000 and $88,000 in interest and penalties for the years ended December 31, 2017 and 2016, respectively. The Company had $466,000, $675,000 and $554,000 of accrued liabilities for the payment of interest and penalties at December 31, 2018, 2017 and 2016, respectively.

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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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