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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The components of earnings before income taxes consisted of the following for the years ended December 31:
(In thousands) | 2017 |  | 2016 |  | 2015
United States | $ | 213,967 |  |  | $ | 196,827 |  |  | $ | 113,280 |
Foreign | (1,123 | ) |  | 2,345 |  |  | 1,089 |
Total earnings before income taxes | $ | 212,844 |  |  | $ | 199,172 |  |  | $ | 114,369 |
The provision for income taxes in the Consolidated Statements of Income was as follows for the years ended December 31:
(In thousands) | 2017 |  | 2016 |  | 2015
Current: |  |  |  |  |
Federal | $ | 62,274 |  |  | $ | 61,073 |  |  | $ | 31,132 |
State and local | 10,720 |  |  | 10,560 |  |  | 7,670 |
Foreign | 158 |  |  | 466 |  |  | 160 |
Total current provision | 73,152 |  |  | 72,099 |  |  | 38,962 |
Deferred: |  |  |  |  |
Federal | 7,614 |  |  | (2,506 | ) |  | 466 |
State and local | (806 | ) |  | (110 | ) |  | 596 |
Foreign | — |  |  | 18 |  |  | — |
Total deferred provision | 6,808 |  |  | (2,598 | ) |  | 1,062 |
Provision for income taxes | $ | 79,960 |  |  | $ | 69,501 |  |  | $ | 40,024 |
On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) was signed into law making significant changes to the Internal Revenue Code (“IRC”). The TCJA changes included a reduction of the corporate income tax rate from 35 percent to 21 percent effective for tax years beginning after December 31, 2017, a provision that allows for full expensing of certain qualified property, repeal of the manufacturing deduction, and further limitations on the deductibility of certain executive compensation. The TCJA contains other provisions that are not expected to materially affect the Company, including a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries, limitations on the deductibility of interest expense, and the creation of U.S. tax base erosion provisions. U.S. GAAP requires companies to recognize the effect of tax law changes in the period of enactment. As a result, the Company has calculated its best estimate of the impact of the TCJA in its year-end income tax provision in accordance with its understanding of the TCJA and guidance available as of the date of this filing and has recorded $13.2 million as an additional income tax expense in the fourth quarter of 2017. The provisional amount recorded relates to the re-measurement of certain deferred tax assets and liabilities based on the 21 percent future rate at which they are expected to reverse. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the TCJA. In accordance with SAB 118, the Company has determined the $13.2 million of deferred tax expense recorded in connection with the re-measurement of certain deferred tax assets and liabilities was a provisional amount and a reasonable estimate at December 31, 2017. Any subsequent adjustment to these provisional amounts will be recorded to deferred tax expense in the quarter of 2018 when additional information is obtained. Additional information that may affect the Company's provisional amounts would include a more detailed analysis of historical foreign earnings as well as potential correlative adjustments, further clarification and guidance on how the Internal Revenue Service (“IRS”) will implement tax reform, further clarification and guidance on how state taxing authorities will implement tax reform and the related effect on our state income tax returns, completion of our 2017 tax return filings and the potential for additional guidance from the SEC or the FASB related to the TCJA. The Company’s accounting for executive compensation under the TCJA is subject to adjustment as the Company is not yet able to make a reasonable estimate of the effect. The TCJA provides an exception to the rule regarding executive compensation for compensation that is paid pursuant to a binding contract in effect on November 2, 2017 that would have otherwise been deductible under prior tax law. The Company is awaiting IRS regulations regarding the binding contract requirement to determine the impact of the law change. Due to the adoption of ASU 2016-09 in 2017, all excess tax benefits and deficiencies in share-based compensation are recognized immediately as income tax expense in the Consolidated Statement of Income. This will result in increased volatility in the Company’s effective tax rate. Excess tax benefits on stock-based compensation of $8.0 million and $9.0 million were credited directly to stockholders’ equity during the years ended December 31, 2016 and 2015, respectively, relating to tax benefits which exceeded the compensation cost for stock-based compensation recognized in the Consolidated Financial Statements. The provision for income taxes differs from the amount computed by applying the federal statutory rate of 35 percent for 2017, 2016 and 2015 to income before income taxes for the following reasons for the years ended December 31:
(In thousands) | 2017 |  | 2016 |  | 2015
Income tax at federal statutory rate | $ | 74,495 |  |  | $ | 69,710 |  |  | $ | 40,029 |
State income tax, net of federal income tax impact | 6,011 |  |  | 6,480 |  |  | 4,386 |
Foreign tax rate differential | (322 | ) |  | (614 | ) |  | (82 | )
Domestic production deduction | (5,511 | ) |  | (5,067 | ) |  | (2,336 | )
Share-based payment compensation | (7,683 | ) |  | — |  |  | — |
Federal tax credits | (1,110 | ) |  | (1,736 | ) |  | (919 | )
Changes in tax law (TCJA) | 13,210 |  |  | — |  |  | — |
Other | 870 |  |  | 728 |  |  | (1,054 | )
Provision for income taxes | $ | 79,960 |  |  | $ | 69,501 |  |  | $ | 40,024 |
At December 31, 2017, federal income taxes payable of $2.3 million and state income taxes payable of $1.7 million were included in accrued expenses and other current liabilities. At December 31, 2016, federal income taxes receivable of $12.7 million and state income taxes receivable of $0.4 million were included in prepaid expenses and other current assets. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows at December 31:
(In thousands) | 2017 |  | 2016 |  |
Deferred tax assets: |  |  |  |  |
Goodwill and other intangible assets | $ | 5,773 |  |  | $ | 10,952 |  |  |
Stock-based compensation | 7,607 |  |  | 7,550 |  |  |
Deferred compensation | 5,387 |  |  | 5,184 |  |  |
Warranty | 9,282 |  |  | 11,679 |  |  |
Inventory | 5,591 |  |  | 6,572 |  |  |
Other | 2,978 |  |  | 5,000 |  |  |
Total deferred tax assets | 36,618 |  |  | 46,937 |  |  |
Deferred tax liabilities: |  |  |  |  |
Fixed assets | (12,462 | ) |  | (14,948 | ) |  |
Net deferred tax assets | $ | 24,156 |  |  | $ | 31,989 |  |  |
At December 31, 2017, the Company had foreign deferred tax liabilities of $7.8 million related to goodwill and other intangible assets included in other long-term liabilities on the Consolidated Balance Sheet. The Company concluded it is more likely than not the deferred tax assets at December 31, 2017 will be realized in the ordinary course of operations based on projected future taxable income and scheduling of deferred tax liabilities. Unrecognized Tax Benefits The following table reconciles the total amounts of unrecognized tax benefits, at December 31:
(In thousands) | 2017 |  | 2016 |  | 2015
Balance at beginning of period | $ | 3,747 |  |  | $ | 2,854 |  |  | $ | 1,526 |
Changes in tax positions of prior years | (174 | ) |  | 214 |  |  | 912 |
Additions based on tax positions related to the current year | 1,255 |  |  | 1,252 |  |  | 866 |
Payments | (211 | ) |  | — |  |  | (85 | )
Closure of tax years | (472 | ) |  | (573 | ) |  | (365 | )
Balance at end of period | $ | 4,145 |  |  | $ | 3,747 |  |  | $ | 2,854 |
In addition, the total amount of accrued interest and penalties related to taxes, recognized as a liability, was $0.2 million, $0.2 million and $0.2 million at December 31, 2017, 2016 and 2015, respectively. The total amount of unrecognized tax benefits, net of federal income tax benefits, of $3.7 million, $2.9 million and $2.7 million at December 31, 2017, 2016 and 2015, respectively, would, if recognized, increase the Company’s earnings, and lower the Company’s annual effective tax rate in the year of recognition. The Company is subject to taxation in the United States and various states and foreign jurisdictions. The Company periodically undergoes examinations by the IRS, as well as various state and foreign taxing authorities. The IRS and other taxing authorities may challenge certain deductions and positions reported by the Company on its income tax returns. For U.S. federal income tax purposes, tax years 2015 and 2016 remain subject to examination. For Indiana state income tax purposes, the tax years 2014 through 2016 remain subject to examination. Approximately 80 percent of the Company’s operations are located in Indiana. In other major jurisdictions, open years are generally 2014 or later. During the fourth quarter of 2017, the Company settled an examination with the IRS for its 2014 tax return. The settlement required the Company to pay $0.1 million in tax and interest during the fourth quarter of 2017 in full satisfaction of all liabilities for this matter. The settlement did not impose any penalties on the Company. Therefore, the Company decreased its remaining reserve for unrecognized tax benefits for this matter by $0.1 million in the fourth quarter of 2017. The Company has assessed its risks associated with all tax return positions, and believes its tax reserve estimates reflect its best estimate of the deductions and positions it will be able to sustain, or it may be willing to concede as part of a settlement. At this time, the Company cannot estimate the range of reasonably possible change in its tax reserve estimates in 2018. While these tax matters could materially affect operating results when resolved in future periods, it is management’s opinion that after final disposition, any monetary liability or financial impact to the Company beyond that provided for in the Consolidated Balance Sheet as of December 31, 2017, would not be material to the Company’s financial position or annual results of operations.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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