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Income Taxes | 12 Months Ended
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Dec. 31, 2019
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) | 2019 |  | 2018 |  | 2017
United States | $ | 189,834 |  |  | $ | 191,095 |  |  | $ | 213,967 |
Foreign | 1,580 |  |  | 1,257 |  |  | (1,123) |
Total earnings before income taxes | $ | 191,414 |  |  | $ | 192,352 |  |  | $ | 212,844 |
The provision for income taxes in the Consolidated Statements of Income was as follows for the years ended December 31:
(In thousands) | 2019 |  | 2018 |  | 2017
Current: |  |  |  |  |
Federal | $ | 33,655 |  |  | $ | 22,297 |  |  | $ | 62,274 |
State and local | 6,764 |  |  | 6,416 |  |  | 10,720 |
Foreign | 1,070 |  |  | 1,214 |  |  | 158 |
Total current provision | 41,489 |  |  | 29,927 |  |  | 73,152 |
Deferred: |  |  |  |  |
Federal | 5,923 |  |  |  | 12,478 |  |  |  | 7,614 |
State and local | (969) |  |  |  | 1,639 |  |  |  | (806) |
Foreign | (1,538) |  |  |  | (243) |  |  |  | — |
Total deferred provision | 3,416 |  |  | 13,874 |  |  | 6,808 |
Provision for income taxes | $ | 44,905 |  |  | $ | 43,801 |  |  | $ | 79,960 |
On December 22, 2017, 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 have not materially affected 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. Following the enactment of the TCJA, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB 118”) to provide guidance on the accounting and reporting impacts of the TCJA. For the year ended December 31, 2018, the Company finalized its tax accounting for the TCJA and pursuant to SAB 118 recorded a one-time non-cash charge of $0.6 million related to adjustments to deferred tax amounts provisionally recorded in the prior year. During the year ended December 31, 2017, the Company recorded a provisional one-time non-cash charge of $13.2 million related to the enactment of the TCJA, which resulted from the re-measurement of certain deferred tax assets using the lower U.S. corporate income tax rate. The Company has historically reinvested all unremitted earnings of our foreign subsidiaries and affiliates, and therefore has not recognized any U.S. deferred tax liability on those earnings. However, the TCJA change in the U.S. taxation of foreign income has led the Company to reassess its position as it relates to permanent reinvestment and it has now determined that it will only assert permanent reinvestment in its Canadian subsidiaries. The Company examined the potential liabilities related to investments in foreign subsidiaries and concluded that there is no material deferred tax liabilities that should be recorded. The provision for income taxes differs from the amount computed by applying the federal statutory rate of 21 percent for 2019 and 2018 and 35 percent for 2017 to income before income taxes for the following reasons for the years ended December 31:
(In thousands) | 2019 |  | 2018 |  | 2017
Income tax at federal statutory rate | $ | 40,197 |  |  | $ | 40,394 |  |  | $ | 74,495 |
State income tax, net of federal income tax impact | 4,578 |  |  | 6,261 |  |  | 6,011 |
Domestic production deduction | — |  |  | — |  |  | (5,511) |
Share-based payment compensation excess tax benefit | (1,579) |  |  | (2,914) |  |  | (7,683) |
Changes in tax law (TCJA) | — |  |  | 612 |  |  | 13,210 |
Other | 1,709 |  |  | (552) |  |  | (562) |
Provision for income taxes | $ | 44,905 |  |  | $ | 43,801 |  |  | $ | 79,960 |
At December 31, 2019, the Company had domestic federal income taxes receivable of $7.1 million, domestic state income taxes receivable of $4.6 million, and foreign taxes payable of $0.5 million recorded. At December 31, 2018, the Company had domestic federal income taxes receivable of $10.2 million, domestic state income taxes receivable of $0.4 million, and foreign taxes payable of $0.6 million recorded. Deferred Income Tax Assets and Liabilities and Valuation Allowances 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) | 2019 |  | 2018 |  |
Deferred tax assets: |  |  |  |  |
Goodwill and other intangible assets | $ | — |  |  | $ | 3,854 |  |  |
Stock-based compensation | 2,290 |  |  | 2,956 |  |  |
Deferred compensation | 5,976 |  |  | 6,710 |  |  |
Warranty | 11,246 |  |  | 10,931 |  |  |
Inventory | 8,001 |  |  | 6,375 |  |  |
Other | 2,585 |  |  | 3,454 |  |  |
Lease obligation asset | 25,055 |  |  | 822 |  |  |
Net operating loss and interest carryforwards | 7,352 |  |  | 1,467 |  |  |
Total deferred tax assets before valuation allowance | 62,505 |  |  | 36,569 |  |  |
Less: Valuation allowance | (1,662) |  |  | (1,261) |  |  |
Total deferred tax assets net of valuation allowance | 60,843 |  |  | 35,308 |  |  |
Deferred tax liabilities: |  |  |  |  |
Lease obligation liability | (24,368) |  |  | — |  |  |
Fixed assets | (27,898) |  |  | (24,360) |  |  |
Intangible assets | (44,317) |  |  | (8,501) |  |  |
Total deferred tax liabilities | (96,583) |  |  | (32,861) |  |  |
Net deferred tax (liabilities) assets | $ | (35,740) |  |  | $ | 2,447 |  |  |
At December 31, 2019 and 2018, the Company had net foreign deferred tax liabilities of $9.7 million and $8.5 million, respectively, related to goodwill and other intangible assets included in other long-term liabilities on the Consolidated Balance Sheets. As of December 31, 2019, the Company had deferred tax assets recorded related to foreign net operating losses and tax credit carryforwards of $2.6 million, net. This includes $1.7 million related to UK entities and $0.9 million related to Italian entities. The net operating losses and tax credit carryforwards have indefinite lives. The valuation allowance for deferred tax assets as of December 31, 2019 and 2018 was $1.7 million and $1.3 million, respectively. The valuation allowance at 2019 and 2018 was related to net operating losses and tax credit carryforwards related to the UK entities. The net change in the total valuation allowance for the year ended December 31, 2019 was an increase of $0.4 million. The increase in the valuation allowance relates to the current year losses in the UK. Based upon historical results and estimated future results, it is the judgment of management that these tax carryforward attributes related to the UK entities are not likely to be realized. As of December 31, 2019, the Company had a domestic deferred tax asset recorded related to net operating losses acquired during the year of $0.3 million which will begin to expire as of December 31, 2029. Additionally, the Company had a domestic deferred tax asset recorded related to interest expense limitation of $4.4 million net, which has an indefinite life carry forward. No valuation allowance has been established against these net operating losses and interest carryforwards as they are more likely than not to be realized prior to expiration. Certain tax attributes are subject to annual limitations as defined under Internal Revenue Code Section 382 as a result of the stock acquisitions in 2019. The Company has concluded it is more likely than not that it will realize the benefit of all other existing deferred tax assets, net of the valuation allowances mentioned above. Unrecognized Tax Benefits The following table reconciles the total amounts of unrecognized tax benefits, at December 31:
(In thousands) | 2019 |  | 2018 |  | 2017
Balance at beginning of period | $ | 4,325 |  |  | $ | 4,145 |  |  | $ | 3,747 |
Changes in tax positions of prior years | 480 |  |  | 114 |  |  | (174) |
Additions based on tax positions related to the current year | 4,288 |  |  | 802 |  |  | 1,255 |
Payments | — |  |  | — |  |  | (211) |
Closure of tax years | (879) |  |  | (736) |  |  | (472) |
Balance at end of period | $ | 8,214 |  |  | $ | 4,325 |  |  | $ | 4,145 |
In addition, the total amount of accrued interest and penalties related to taxes, recognized as a liability, was $0.4 million, $0.2 million, and $0.2 million at December 31, 2019, 2018, and 2017, respectively. The total amount of unrecognized tax benefits, net of federal income tax benefits, of $7.9 million, $3.9 million, and $3.7 million at December 31, 2019, 2018, and 2017, 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. In the normal course of business, the Company is subject to examinations by taxing authorities in these jurisdictions. For U.S. federal and state income tax purposes, tax years 2018, 2017, and 2016 remain subject to examination. 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 does not anticipate any change in its tax reserves in the next twelve months. The Company will continue to monitor the progress and conclusion of all audits and will adjust its estimated liability as necessary.

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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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