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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes On December 22, 2017, the Tax Act was enacted by the U.S. government. The legislation makes broad and complex changes to the U.S. tax code affecting the taxation of businesses in all industries. The most significant impact to our financial statements is the reduction of the corporate federal income tax rate from 35% to 21%. Other relevant provisions which may impact our financial statements in the future include, but are not limited to, the elimination of the production activities deduction, limitations on the deductibility of certain executive compensation, bonus depreciation to allow immediate expensing of qualified property, and limitations on deductible interest expense. As of December 31, 2018, we have completed our assessment of the effects of the Tax Act on our financial statements. In connection with our analysis of the Tax Act, we recorded a discrete tax benefit of $8.1 million during the year ended December 31, 2017, and an additional discrete tax benefit of $3.8 million during 2018. Income Tax Provision Income before income taxes includes the following components:
|  | Year Ended December 31
|  | 2018 |  | 2017 |  | 2016
|  | (thousands)
Domestic |  | $ | 21,704 |  |  | $ | 115,083 |  |  | $ | 41,703 |
Foreign |  | 398 |  |  | 2,505 |  |  | 1,598 |
Income before income taxes |  | $ | 22,102 |  |  | $ | 117,588 |  |  | $ | 43,301 |
The income tax provision shown in the Consolidated Statements of Operations includes the following:
|  | Year Ended December 31
|  | 2018 |  | 2017 |  | 2016
|  | (thousands)
Current income tax provision (benefit) |  |  |  |  |  |
Federal |  | $ | 6,459 |  |  | $ | 22,541 |  |  | $ | 10,664 |
State |  | 3,126 |  |  | 3,973 |  |  | 2,201 |
Foreign |  | 5 |  |  | — |  |  | 5 |
Total current |  | 9,590 |  |  | 26,514 |  |  | 12,870 |
Deferred income tax provision (benefit) |  |  |  |  |  |
Federal |  | (5,987 | ) |  | 6,747 |  |  | 2,549 |
State |  | (2,127 | ) |  | 991 |  |  | (1,536 | )
Foreign |  | 149 |  |  | 379 |  |  | (8,836 | )
Total deferred |  | (7,965 | ) |  | 8,117 |  |  | (7,823 | )
Income tax provision |  | $ | 1,625 |  |  | $ | 34,631 |  |  | $ | 5,047 |
The effective tax rate varies from the U.S. Federal statutory income tax rate principally due to the following:
|  | Year Ended December 31
|  | 2018 |  | 2017 |  | 2016
|  | (thousands, except percentages)
Income before income taxes |  | $ | 22,102 |  |  | $ | 117,588 |  |  | $ | 43,301 |
Statutory U.S. income tax rate |  | 21.0 | % |  | 35.0 | % |  | 35.0 | %
Statutory tax provision |  | $ | 4,642 |  |  | $ | 41,156 |  |  | $ | 15,155 |
State taxes |  | 741 |  |  | 3,719 |  |  | 1,370 |
Domestic production activities deduction |  | — |  |  | (963 | ) |  | (165 | )
Unrecognized tax benefits |  | (181 | ) |  | (86 | ) |  | 1,717 |
Benefit from enactment of the Tax Act |  | (3,806 | ) |  | (8,129 | ) |  | — |
Change in valuation allowance (a) |  | — |  |  | — |  |  | (9,884 | )
Tax credits |  | (272 | ) |  | (912 | ) |  | (2,904 | )
Foreign rate differential |  | 432 |  |  | (366 | ) |  | (91 | )
Share-based compensation |  | (1,718 | ) |  | (413 | ) |  | 107 |
Nondeductible executive compensation |  | 366 |  |  | — |  |  | — |
Meals and entertainment |  | 886 |  |  | 663 |  |  | 601 |
Other |  | 535 |  |  | (38 | ) |  | (859 | )
Total |  | $ | 1,625 |  |  | $ | 34,631 |  |  | $ | 5,047 |
Effective income tax rate |  | 7.4 | % |  | 29.5 | % |  | 11.7 | %
______________________________________
(a) | Deferred tax assets in our foreign subsidiaries are primarily the result of net operating losses. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. During fourth quarter 2016, because we achieved three years of cumulative pretax income in the Canadian tax jurisdiction and due to the implementation of a tax-planning strategy, management determined that there is sufficient positive evidence to conclude that it is more likely than not that the deferred tax assets are realizable and therefore released the valuation allowance in the amount of $9.9 million.
During the years ended December 31, 2018, 2017, and 2016, cash paid for taxes, net of refunds received, was $14.5 million, $36.1 million, and $6.7 million, respectively. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. The components of our net deferred tax assets and liabilities at December 31, 2018 and 2017, are summarized as follows:
|  | December 31, 2018 |  | December 31, 2017
|  | (thousands)
Deferred tax assets |  |  |  |
Employee benefits |  | $ | 27,149 |  |  | $ | 30,853 |
Capital leases |  | 5,742 |  |  | 1,079 |
Inventories |  | 2,649 |  |  | 4,598 |
Foreign net operating loss carryforward |  | 3,108 |  |  | 5,137 |
Other |  | 6,461 |  |  | 4,924 |
Net deferred tax assets |  | $ | 45,109 |  |  | $ | 46,591 |
Deferred tax liabilities |  |  |  |
Property and equipment |  | $ | (48,302 | ) |  | $ | (47,946 | )
Intangible assets and other |  | (5,369 | ) |  | (4,168 | )
Other |  | (2,445 | ) |  | (1,867 | )
Deferred tax liabilities |  | $ | (56,116 | ) |  | $ | (53,981 | )
Total deferred tax liabilities, net |  | $ | (11,007 | ) |  | $ | (7,390 | )
As of December 31, 2018, we have foreign net operating loss carryforwards of $15.7 million, which if unused, will expire in years 2026 through 2036. We have state income tax credits totaling $1.5 million as of December 31, 2018, which if unused will expire in years 2020 through 2032. The foreign net operating loss and state credit carryforwards in the income tax returns filed included unrecognized tax benefits. The deferred tax assets recognized for those net operating loss and state credit carryforwards are presented net of these unrecognized tax benefits. Income Tax Uncertainties The following table summarizes the changes related to our gross unrecognized tax benefits excluding interest and penalties:
|  | 2018 |  | 2017 |  | 2016
|  | (thousands)
Balance as of January 1 |  | $ | 2,083 |  |  | $ | 2,224 |  |  | $ | 878 |
Increases related to prior years' tax positions |  | 13 |  |  | 1 |  |  | 1,657 |
Increases related to current year tax positions |  | — |  |  | 51 |  |  | 104 |
Decreases related to prior years' tax positions |  | (43 | ) |  | (12 | ) |  | — |
Lapse of statute of limitations |  | (203 | ) |  | (181 | ) |  | — |
Settlements |  | — |  |  | — |  |  | (415 | )
Balance as of December 31 |  | $ | 1,850 |  |  | $ | 2,083 |  |  | $ | 2,224 |
As of December 31, 2018, 2017, and 2016, we had $1.9 million, $2.1 million, and $2.2 million, respectively, of unrecognized tax benefits recorded on our Consolidated Balance Sheets, excluding interest and penalties. Of the total unrecognized tax benefits recorded, $1.8 million, $2.0 million, and $2.1 million (net of the federal benefit for state taxes), respectively, would impact the effective tax rate if recognized. We recognize interest and penalties related to uncertain tax positions as income tax expense in our Consolidated Statements of Operations. For the years ended December 31, 2018, 2017, and 2016, we recognized an insignificant amount of interest and penalties related to taxes. We recognize tax liabilities and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available or as new uncertainties occur. We do not expect the unrecognized tax benefits to change significantly over the next twelve months. We file income tax returns in the U.S. and various state and foreign jurisdictions. Tax years 2014 to present remain open to examination in the U.S. and tax years 2014 to present remain open to examination in Canada and various states. We recorded net operating losses in Canada beginning in 2006 that are subject to examinations and adjustments up to four years following the year in which they are utilized.

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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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