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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes During 2017, the Company recorded income tax expense of $53.1 million in connection with the enactment of the "Tax Cuts and Jobs Act" (2017 Tax Act), all of which the Company regarded as provisional under SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118). The Company's provisional income tax expense included the remeasurement of deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, a one-time transition tax related to undistributed earnings of certain foreign subsidiaries that were not previously taxed, the write-off of foreign tax credit deferred tax assets related to withholding tax on foreign dividend payments, state tax estimates related to the conformity of federal tax law changes and other smaller items. The Company completed its accounting for all of the initial income tax effects of the 2017 Tax Act during 2018 which resulted in a reduction to income tax expense during 2018 of $1.5 million. The 2017 Tax Act also subjects U.S. shareholders to current tax on global intangible low-taxed income (GILTI) earned by certain foreign subsidiaries for which a company can elect to either recognize deferred taxes or to provide tax expense in the year incurred. The Company has elected to account for GILTI in the year the tax is incurred. Provision for income taxes for the years ended December 31 consists of the following (in thousands):
|  | 2018 |  | 2017 |  | 2016
Current: |  |  |  |  |  |
Federal |  | $ | 136,202 |  |  | $ | 245,189 |  |  | $ | 284,489 |
State |  | 23,134 |  |  | 24,898 |  |  | 28,406 |
Foreign |  | 29,823 |  |  | 21,138 |  |  | 19,017 |
|  | 189,159 |  |  | 291,225 |  |  | 331,912 |
Deferred: |  |  |  |  |  |
Federal |  | (23,181 | ) |  | 47,046 |  |  | (4,250 | )
State |  | (6,787 | ) |  | 2,688 |  |  | 7,038 |
Foreign |  | (4,013 | ) |  | 1,121 |  |  | (2,953 | )
|  | (33,981 | ) |  | 50,855 |  |  | (165 | )
Total |  | $ | 155,178 |  |  | $ | 342,080 |  |  | $ | 331,747 |
The components of income before income taxes for the years ended December 31 were as follows (in thousands):
|  | 2018 |  | 2017 |  | 2016
Domestic |  | $ | 593,099 |  |  | $ | 788,878 |  |  | $ | 954,138 |
Foreign |  | 93,530 |  |  | 74,961 |  |  | 69,773 |
Total |  | $ | 686,629 |  |  | $ | 863,839 |  |  | $ | 1,023,911 |
The provision for income taxes differs from the amount that would be provided by applying the statutory U.S. corporate income tax rate due to the following items for the years ended December 31:
|  | 2018 |  | 2017 |  | 2016
Provision at statutory rate |  | 21.0 | % |  | 35.0 | % |  | 35.0 | %
State taxes, net of federal benefit |  | 2.6 |  |  | 1.9 |  |  | 1.8 |
Foreign rate differential |  | 0.4 |  |  | (0.8 | ) |  | (0.6 | )
Domestic manufacturing deduction |  | — |  |  | (2.2 | ) |  | (2.1 | )
Foreign derived intangible income |  | (1.2 | ) |  | — |  |  | — |
Research and development credit |  | (1.1 | ) |  | (0.7 | ) |  | (0.4 | )
Unrecognized tax benefits including interest and penalties |  | (0.6 | ) |  | 2.3 |  |  | (1.3 | )
Valuation allowance adjustments |  | 0.1 |  |  | (0.1 | ) |  | 0.1 |
Deferred tax balance remeasurement for rate change |  | (1.2 | ) |  | 5.5 |  |  | — |
Territorial tax |  | 1.4 |  |  | (0.1 | ) |  | — |
Global intangible low-taxed income |  | 0.4 |  |  | — |  |  | — |
Adjustments for previously accrued taxes |  | (1.0 | ) |  | (1.2 | ) |  | 0.2 |
Rate differential on intercompany transfers |  | 0.9 |  |  | — |  |  | — |
Executive compensation limitation |  | 0.5 |  |  | — |  |  | — |
Other |  | 0.4 |  |  | — |  |  | (0.3 | )
Provision for income taxes |  | 22.6 | % |  | 39.6 | % |  | 32.4 | %
The principal components of the Company’s deferred tax assets and liabilities as of December 31 include the following (in thousands):
|  | 2018 |  | 2017
Deferred tax assets: |  |  |  |
Accruals not yet tax deductible |  | $ | 108,284 |  |  | $ | 92,158 |
Pension and postretirement benefit plan obligations |  | 48,347 |  |  | 37,357 |
Stock compensation |  | 13,295 |  |  | 12,669 |
Net operating loss carryforward |  | 34,842 |  |  | 33,171 |
Valuation allowance |  | (21,868 | ) |  | (21,561 | )
Other, net |  | 43,870 |  |  | 52,422 |
|  | 226,770 |  |  | 206,216 |
Deferred tax liabilities: |  |  |  |
Depreciation, tax in excess of book |  | (79,326 | ) |  | (88,989 | )
Other |  | (5,980 | ) |  | (8,154 | )
|  | (85,306 | ) |  | (97,143 | )
Total |  | $ | 141,464 |  |  | $ | 109,073 |
The Company reviews its deferred tax asset valuation allowances on a quarterly basis, or whenever events or changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred tax asset is considered, along with any positive or negative evidence including tax law changes. Since future financial results and tax law may differ from previous estimates, periodic adjustments to the Company’s valuation allowances may be necessary. At December 31, 2018, the Company had approximately $270.4 million of gross state operating loss carryforwards expiring in 2031. At December 31, 2018, the Company also had Wisconsin research and development credit carryforwards of $11.4 million expiring in 2024-2028. The Company had a deferred tax asset of $25.9 million as of December 31, 2018 for the benefit of these losses and credits. A valuation allowance of $2.9 million was established against the deferred tax asset, which is a decrease of $1.6 million from the prior year. The Company had foreign net operating losses (NOL) totaling $8.9 million as of December 31, 2018. It had a valuation allowance of $18.9 million against both the NOLs and other deferred tax assets of $10.0 million. The valuation allowance on foreign net operating losses increased by $1.8 million, reflecting movement related to realizability assessment on additional earnings and loss, as well as movements related to foreign currency rates. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. Changes in the Company’s gross liability for unrecognized tax benefits, excluding interest and penalties, were as follows (in thousands):
|  | 2018 |  | 2017
Unrecognized tax benefits, beginning of period |  | $ | 72,230 |  |  | $ | 55,539 |
Increase in unrecognized tax benefits for tax positions taken in a prior period |  | 940 |  |  | 9,513 |
Decrease in unrecognized tax benefits for tax positions taken in a prior period |  | (9,783 | ) |  | (3,749 | )
Increase in unrecognized tax benefits for tax positions taken in the current period |  | 3,355 |  |  | 13,779 |
Settlements with taxing authorities |  | (5,331 | ) |  | (2,852 | )
Unrecognized tax benefits, end of period |  | $ | 61,411 |  |  | $ | 72,230 |
The amount of unrecognized tax benefits as of December 31, 2018 that, if recognized, would affect the effective tax rate was $53.7 million. The total gross amount of benefit related to interest and penalties associated with unrecognized tax benefits recognized during 2018 in the Company’s consolidated statement of income was $3.2 million. The total gross amount of interest and penalties associated with unrecognized tax benefits recognized at December 31, 2018 in the Company’s consolidated balance sheet was $27.7 million. The Company does not expect a significant increase or decrease to the total amounts of unrecognized tax benefits related to continuing operations during the fiscal year ending December 31, 2019. However, the Company is under regular audit by tax authorities. The Company believes that it has appropriate support for the positions taken on its tax returns and that its annual tax provision includes amounts sufficient to pay any assessments. Nonetheless, the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year. The Company or one of its subsidiaries files income tax returns in the U.S. federal and Wisconsin state jurisdictions and various other state and foreign jurisdictions. The Company is no longer subject to income tax examinations for Wisconsin state income taxes before 2014 or for U.S. federal income taxes before 2014. The Company is currently under audit for U.S. federal income taxes for years 2015 and 2016.

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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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