XML 34 R19.htm IDEA: XBRL DOCUMENT v3.24.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
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)202320222021
United States$92,679 $550,030 $378,460 
Foreign(9,675)(24,575)3,584 
Total earnings before income taxes$83,004 $525,455 $382,044 
The provision for income taxes in the Consolidated Statements of Income was as follows for the years ended December 31:
(In thousands)202320222021
Current:
Federal$15,454 $114,744 $78,604 
State and local1,752 22,998 17,044 
Foreign(464)2,016 1,936 
Total current provision16,742 139,758 97,584 
Deferred:
Federal5,824 (3,786)2,192 
State and local824 (285)(517)
Foreign(4,581)(5,206)(4,954)
Total deferred provision (benefit)2,067 (9,277)(3,279)
Provision for income taxes$18,809 $130,481 $94,305 
The Company had cash and cash equivalents of approximately $66.2 million and $47.5 million at December 31, 2023 and 2022, respectively, of which approximately 19 percent and 49 percent was held by subsidiaries in foreign countries. The Company examined the potential liabilities related to investments in foreign subsidiaries and concluded that there are 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 2023, 2022, and 2021 to income before income taxes for the following reasons for the years ended December 31:
(In thousands)202320222021
Income tax at federal statutory rate$17,431 $110,345 $80,229 
State income tax, net of federal income tax impact2,035 17,944 13,056 
Section 162(m) permanent addback1,896 3,784 6,153 
Federal tax credits(1,219)(1,638)(1,230)
Share-based payment compensation excess tax benefit(242)(509)(1,191)
Other(1,092)555 (2,712)
Provision for income taxes$18,809 $130,481 $94,305 
At December 31, 2023, the Company had domestic federal income taxes receivable of $7.7 million, domestic state income taxes receivable of $5.8 million, and foreign taxes receivable of $3.2 million recorded. At December 31, 2022, the Company had domestic federal income taxes payable of $16.6 million, domestic state income taxes payable of $5.4 million, and foreign taxes receivable of $1.2 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)20232022
Deferred tax assets:
Stock-based compensation$1,840 $2,268 
Pension1,133 1,271 
Deferred compensation10,223 15,091 
Warranty13,936 11,517 
Convertible debt bond hedge12,289 17,237 
Inventory20,811 20,758 
Research and experimental costs6,845 4,986 
Other7,043 6,630 
Lease obligation asset62,460 63,146 
Net operating loss, interest, and tax credit carryforwards13,231 12,924 
Total deferred tax assets before valuation allowance149,811 155,828 
Less valuation allowance(7,300)(8,750)
Total deferred tax assets net of valuation allowance142,511 147,078 
Deferred tax liabilities:
Lease obligation liability(59,212)(60,487)
Fixed assets(45,995)(45,634)
Intangible assets(66,398)(67,640)
Total deferred tax liabilities(171,605)(173,761)
Net deferred tax liabilities$(29,094)$(26,683)
At December 31, 2023 and 2022, the Company had net foreign deferred tax liabilities of $15.4 million and $19.2 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, 2023, the Company had deferred tax assets recorded related to foreign net operating losses and tax credit carryforwards of $12.0 million, net. This includes $1.4 million related to U.K. entities, $3.4 million related to Italian entities, and $7.2 million related to Hong Kong entities. The net operating losses and tax credit carryforwards have indefinite lives.

Due to improved results, the Company released its U.K. valuation allowance in 2023. The foreign valuation allowance for U.K. deferred tax assets as of each of December 31, 2023 and 2022 was $0.0 million and $0.9 million, respectively. The foreign valuation allowance for Hong Kong deferred tax assets as of December 31, 2023 and 2022 was $7.2 million and $7.7 million, respectively. Based upon historical results and estimated future results, it is the judgment of management that these tax carryforward attributes related to 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)202320222021
Balance at beginning of period$23,376 $20,462 $8,921 
Changes in tax positions of prior years218 — (69)
Additions based on tax positions related to the current year1,195 5,758 12,826 
Decreases due to settlements of liabilities— (904)— 
Closure of tax years(394)(1,940)(1,216)
Balance at end of period$24,395 $23,376 $20,462 
In addition, the total amount of accrued interest and penalties related to taxes, recognized as a liability, was $7.2 million, $5.1 million, and $0.8 million at December 31, 2023, 2022, and 2021, respectively.

The total amount of unrecognized tax benefits, net of federal income tax benefits, of $30.8 million, $27.5 million, and $20.5 million at December 31, 2023, 2022, and 2021, 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 income tax purposes, tax years 2022 and 2021 remain subject to examination. For U.S. state income tax purposes, tax years 2022, 2021, and 2020 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 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.