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INCOME TAXES: | 12 Months Ended
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Dec. 31, 2015
Income Taxes |
Income Taxes | NOTE 4—INCOME TAXES: The domestic and foreign components of pretax income are as follows:
|  | 2015 |  | 2014 |  | 2013 |
Domestic |  | $ | 82,276 |  | $ | 81,255 |  | $ | 73,362 |
Foreign |  |  | 10,302 |  |  | 10,039 |  |  | 11,121 |
|  | $ | 92,578 |  | $ | 91,294 |  | $ | 84,483 |
The provision for income taxes is comprised of the following:
|  | 2015 |  | 2014 |  | 2013 |
Current: |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 26,259 |  | $ | 25,173 |  | $ | 16,192 |
Foreign |  |  | (596) |  |  | 549 |  |  | 219 |
State |  |  | 785 |  |  | 1,538 |  |  | 891 |
|  |  | 26,448 |  |  | 27,260 |  |  | 17,302 |
Deferred: |  |  |  |  |  |  |  |  |  |
Federal |  |  | (1,189) |  |  | (172) |  |  | 4,286 |
Foreign |  |  | 2,106 |  |  | 2,032 |  |  | 1,823 |
State |  |  | (914) |  |  | (686) |  |  | 223 |
|  |  | 3 |  |  | 1,174 |  |  | 6,332 |
|  | $ | 26,451 |  | $ | 28,434 |  | $ | 23,634 |
Significant components of the Company’s net deferred tax liability at year end were as follows:
|  | December 31, |
|  | 2015 |  | 2014 |
Deferred tax assets: |  |  |  |  |  |  |
Accrued customer promotions |  | $ | 3,907 |  | $ | 3,219 |
Deferred compensation |  |  | 23,842 |  |  | 28,099 |
Postretirement benefits |  |  | 4,543 |  |  | 4,895 |
Other accrued expenses |  |  | 8,324 |  |  | 7,660 |
Foreign subsidiary tax loss carry forward |  |  | 9,956 |  |  | 12,972 |
Tax credit carry forward |  |  | 2,319 |  |  | 1,530 |
|  |  | 52,891 |  |  | 58,375 |
Valuation allowance |  |  | (2,077) |  |  | (2,478) |
Total deferred tax assets |  | $ | 50,814 |  | $ | 55,897 |
Deferred tax liabilities: |  |  |  |  |  |  |
Depreciation |  | $ | 29,062 |  | $ | 31,520 |
Deductible goodwill and trademarks |  |  | 44,255 |  |  | 43,960 |
Accrued export company commissions |  |  | 5,897 |  |  | 5,555 |
Employee benefit plans |  |  | 2,403 |  |  | 3,907 |
Inventory reserves |  |  | 3,793 |  |  | 3,422 |
Prepaid insurance |  |  | 1,065 |  |  | 867 |
Unrealized capital gain |  |  | 362 |  |  | 2,364 |
Deferred gain on sale of real estate |  |  | 8,154 |  |  | 8,168 |
Total deferred tax liabilities |  | $ | 94,991 |  | $ | 99,763 |
Net deferred tax liability |  | $ | 44,177 |  | $ | 43,866 |
At December 31, 2015, the Company has $289 of benefits related to its Mexican and Canadian subsidiaries tax credit carry-forwards. The carry-forward credits expire in 2017. A valuation allowance has been established for the carry-forward losses to reduce the future income tax benefits to amounts expected to be realized. The Company also has $2,030 of benefits related to state tax credit carry-forwards. The state credit carry-forward expires in 2021. The Company expects that these state credit carry-forwards will be utilized before their expiration. At December 31, 2015, the tax benefits of the Company’s Canadian subsidiary tax loss carry-forwards expiring by year are as follows: $4,081 in 2028, $3,439 in 2029 and $602 in 2031. The Company expects that these carry-forwards will be realized before their expiration. At December 31, 2015, the amounts of the Company’s Spanish subsidiary loss carry-forwards expiring by year are as follows: $273 in 2026, $58 in 2027, $200 in 2028, $99 in 2029, $306 in 2030, $399 in 2031, $288 in 2032 and $211 in 2033. A full valuation allowance has been provided for these Spanish loss carry-forwards as the Company expects that the losses will not be utilized before their expiration. The effective income tax rate differs from the statutory rate as follows:
|  | 2015 |  | 2014 |  | 2013 |
U.S. statutory rate |  | 35.0 | % | 35.0 | % | 35.0 | %
State income taxes, net |  | 1.1 |  | 1.0 |  | 1.0 |
Exempt municipal bond interest |  | (0.1) |  | (0.5) |  | (0.4) |
Foreign tax rates |  | (1.3) |  | (1.5) |  | (2.0) |
Qualified domestic production activities deduction |  | (2.6) |  | (2.8) |  | (2.2) |
Tax credits receivable |  | (1.2) |  | (0.6) |  | (0.9) |
Adjustment of deferred tax balances |  | 0.2 |  | 1.9 |  | (1.1) |
Reserve for uncertain tax benefits |  | (2.1) |  | — |  | (0.7) |
Other, net |  | (0.4) |  | (1.4) |  | (0.7) |
Effective income tax rate |  | 28.6 | % | 31.1 | % | 28.0 | %
The Company has not provided for U.S. federal or foreign withholding taxes on $3,529 and $5,393 of a foreign subsidiary undistributed earnings as of December 31, 2015 and December 31, 2014, respectively, because such earnings are considered to be permanently reinvested. The Company estimates that the federal income tax liability on such remittances would approximate 30%. This foreign subsidiary holds $15,265 and $15,986 of cash and short term investments as of December 31, 2015 and 2014, respectively. At December 31, 2015 and 2014, the Company had unrecognized tax benefits of $4,680 and $6,993, respectively. Included in this balance is $2,737 and $4,805, respectively, of unrecognized tax benefits that, if recognized, would favorably affect the annual effective income tax rate. As of December 31, 2015 and 2014, $421 and $1,591, respectively, of interest and penalties were included in the liability for uncertain tax positions. A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows:
|  | 2015 |  | 2014 |  | 2013 |
Unrecognized tax benefits at January 1 |  | $ | 6,993 |  | $ | 6,010 |  | $ | 6,677 |
Increases in tax positions for the current year |  |  | 812 |  |  | 1,827 |  |  | 1,163 |
Increases in tax positions for new uncertain tax position |  |  | — |  |  | 609 |  |  | — |
Reductions in tax positions for lapse of statute of limitations |  |  | (865) |  |  | (1,050) |  |  | (867) |
Reductions in tax positions relating to settlements with taxing authorities |  |  | (772) |  |  | (403) |  |  | (140) |
Decreases in prior period unrecognized tax benefits |  |  | (1,488) |  |  | — |  |  | — |
Reductions in tax positions for effective settlements |  |  | — |  |  | — |  |  | (823) |
Unrecognized tax benefits at December 31 |  | $ | 4,680 |  | $ | 6,993 |  | $ | 6,010 |
The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes on the Consolidated Statements of Earnings and Retained Earnings. The Company is subject to taxation in the U.S. and various state and foreign jurisdictions. The Company remains subject to examination by U.S. federal and state and foreign tax authorities for the years 2012 through 2014. With few exceptions, the Company is no longer subject to examinations by tax authorities for the years 2011 and prior. The Company’s Canadian subsidiary is currently subject to examination by the Canada Revenue Agency for tax years 2005 and 2007. In addition, the Company is currently subject to various state tax examinations. Although the Company is unable to determine the ultimate outcome of the ongoing examinations, the Company believes that its liability for uncertain tax positions relating to these jurisdictions for such years is adequate.

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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 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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