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Income Taxes | 12 Months Ended
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Dec. 31, 2022
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) | 2022 |  | 2021 |  | 2020
United States | $ | 550,030 |  |  | $ | 378,460 |  |  | $ | 216,234 |
Foreign | (24,575) |  |  | 3,584 |  |  | (6,753) |
Total earnings before income taxes | $ | 525,455 |  |  | $ | 382,044 |  |  | $ | 209,481 |
The provision for income taxes in the Consolidated Statements of Income was as follows for the years ended December 31:
(In thousands) | 2022 |  | 2021 |  | 2020
Current: |  |  |  |  |
Federal | $ | 114,744 |  |  | $ | 78,604 |  |  | $ | 42,541 |
State and local | 22,998 |  |  | 17,044 |  |  | 9,165 |
Foreign | 2,016 |  |  | 1,936 |  |  | 839 |
Total current provision | 139,758 |  |  | 97,584 |  |  | 52,545 |
Deferred: |  |  |  |  |
Federal | (3,786) |  |  | 2,192 |  |  | 2,342 |
State and local | (285) |  |  | (517) |  |  | (671) |
Foreign | (5,206) |  |  | (4,954) |  |  | (3,175) |
Total deferred provision | (9,277) |  |  | (3,279) |  |  | (1,504) |
Provision for income taxes | $ | 130,481 |  |  | $ | 94,305 |  |  | $ | 51,041 |
The Company had cash and cash equivalents of approximately $47.5 million and $62.9 million at December 31, 2022 and 2021, respectively, of which approximately 49 percent and 71 percent was held by subsidiaries in foreign countries. The Company historically reinvested all unremitted earnings of its foreign subsidiaries and affiliates, and therefore had not recognized any U.S. deferred tax liability on those earnings. However, the Tax Cuts and Jobs Act change in the U.S. taxation of foreign income 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 2022, 2021, and 2020 to income before income taxes for the following reasons for the years ended December 31:
(In thousands) | 2022 |  | 2021 |  | 2020
Income tax at federal statutory rate | $ | 110,345 |  |  | $ | 80,229 |  |  | $ | 43,991 |
State income tax, net of federal income tax impact | 17,944 |  |  | 13,056 |  |  | 6,710 |
Section 162(m) permanent addback | 3,784 |  |  | 6,153 |  |  | 3,015 |
Federal tax credits | (1,638) |  |  | (1,230) |  |  | (1,307) |
Share-based payment compensation excess tax benefit | (509) |  |  | (1,191) |  |  | (190) |
Other | 555 |  |  | (2,712) |  |  | (1,178) |
Provision for income taxes | $ | 130,481 |  |  | $ | 94,305 |  |  | $ | 51,041 |
At December 31, 2022, the Company had domestic federal income taxes receivable of $16.6 million, domestic state income taxes receivable of $5.4 million, and foreign taxes receivable of $1.2 million recorded. At December 31, 2021, the Company had domestic federal income taxes payable of $8.5 million, domestic state income taxes payable of $1.6 million, and foreign taxes receivable of $1.6 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) | 2022 |  | 2021 |  |
Deferred tax assets: |  |  |  |  |
Stock-based compensation | $ | 2,268 |  |  | $ | 2,632 |  |  |
Pension | 1,271 |  |  | 8,594 |  |  |
Deferred compensation | 15,091 |  |  | 15,923 |  |  |
Warranty | 11,517 |  |  | 10,790 |  |  |
Convertible debt bond hedge | 17,237 |  |  | 21,699 |  |  |
Inventory | 20,758 |  |  | 16,502 |  |  |
Research and experimental costs | 4,986 |  |  | — |  |  |
Other | 6,630 |  |  | 5,792 |  |  |
Lease obligation asset | 63,146 |  |  | 41,066 |  |  |
Net operating loss, interest, and tax credit carryforwards | 12,924 |  |  | 10,132 |  |  |
Total deferred tax assets before valuation allowance | 155,828 |  |  | 133,130 |  |  |
Less valuation allowance | (8,750) |  |  | (1,054) |  |  |
Total deferred tax assets net of valuation allowance | 147,078 |  |  | 132,076 |  |  |
Deferred tax liabilities: |  |  |  |  |
Lease obligation liability | (60,487) |  |  | (38,770) |  |  |
Fixed assets | (45,634) |  |  | (45,562) |  |  |
Intangible assets | (67,640) |  |  | (87,035) |  |  |
Total deferred tax liabilities | (173,761) |  |  | (171,367) |  |  |
Net deferred tax liabilities | $ | (26,683) |  |  | $ | (39,291) |  |  |
At December 31, 2022 and 2021, the Company had net foreign deferred tax liabilities of $19.2 million and $26.2 million, respectively, primarily related to intangible assets, foreign pension obligations, and net operating loss carryforwards net of any related valuation allowances included in other long-term liabilities on the Consolidated Balance Sheets. As of December 31, 2022, the Company had deferred tax assets recorded related to foreign net operating losses and tax credit carryforwards of $12.7 million, net. This includes $1.9 million related to U.K. entities, $3.1 million related to Italian entities, and $7.7 million related to Furrion Ltd. The net operating losses and tax credit carryforwards have indefinite lives. The foreign valuation allowance for U.K. deferred tax assets as of each of December 31, 2022 and 2021 was $0.9 million. These valuation allowances were related to net operating losses and tax credit carryforwards related to the U.K. entities. During 2022, the Company finalized purchase accounting for its Hong Kong-based entity that it acquired in the Furrion acquisition in 2021. As a result of this purchase accounting, the Company placed a full valuation allowance on the $7.7 million of deferred tax assets in Hong Kong. Based upon historical results and estimated future results, it is the judgment of management that these tax carryforward attributes related to the U.K. and Hong Kong entities are not likely to be realized. 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) | 2022 |  | 2021 |  | 2020
Balance at beginning of period | $ | 20,462 |  |  | $ | 8,921 |  |  | $ | 8,214 |
Changes in tax positions of prior years | — |  |  | (69) |  |  | — |
Additions based on tax positions related to the current year | 5,758 |  |  | 12,826 |  |  | 1,720 |
Decreases due to settlements of liabilities | (904) |  |  | — |  |  | — |
Closure of tax years | (1,940) |  |  | (1,216) |  |  | (1,013) |
Balance at end of period | $ | 23,376 |  |  | $ | 20,462 |  |  | $ | 8,921 |
In addition, the total amount of accrued interest and penalties related to taxes, recognized as a liability, was $5.1 million, $0.8 million, and $0.7 million at December 31, 2022, 2021, and 2020, respectively. The increase in 2022 compared to the prior year is a result of additional interest and penalties that were recorded as part of purchase accounting. The total amount of unrecognized tax benefits, net of federal income tax benefits, of $27.5 million, $20.5 million, and $8.8 million at December 31, 2022, 2021, and 2020, respectively, would, if recognized, increase the Company’s earnings, and lower the Company's annual effective tax rate in the year of recognition. The year over year increase in 2022 in the total amount of unrecognized tax benefits was to reflect a reserve recorded as part of a prior year acquisition which was still within the one-year purchase accounting window. 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. state income tax purposes, tax years 2021, 2020, and 2019 remain subject to examination. During 2022, the Company settled an examination with the U.S. Internal Revenue Service for the tax years 2020, 2019, and 2018. 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 material 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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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