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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 provision (benefit) for income taxes for the years ended December 31, 2017, 2016 and 2015 consists of the following:
| 2017 |  | 2016 |  | 2015
Current tax expense: |  |  |  |  |
Federal | $ | 1,744 |  |  | $ | 312 |  |  | $ | 4,208 |
State | 2,101 |  |  | 159 |  |  | 1,238 |
Foreign | 9,421 |  |  | 7,111 |  |  | 6,949 |
| 13,266 |  |  | 7,582 |  |  | 12,395 |
Deferred income tax expense (benefit) | (40,021 | ) |  | (2,871 | ) |  | 2,251 |
Provision (benefit) for income taxes | $ | (26,755 | ) |  | $ | 4,711 |  |  | $ | 14,646 |
A reconciliation between income taxes computed at the statutory federal rate and the provision (benefit) for income taxes for the years ended December 31, 2017, 2016 and 2015 follows:
| 2017 |  | 2016 |  | 2015
Tax provision at statutory rate based on income before income taxes | 35.0 | % |  | 35.0 | % |  | 35.0 | %
Tax reform | (111.0 | ) |  | — |  |  | — |
Consolidated group restructuring | (7.4 | ) |  | — |  |  | — |
Foreign income taxes | (5.3 | ) |  | (6.8 | ) |  | (3.6 | )
Federal research credit | (2.8 | ) |  | (5.6 | ) |  | (2.0 | )
Settlement of taxing authority examinations | (2.1 | ) |  | (3.5 | ) |  | (0.6 | )
Stock-based compensation | (2.1 | ) |  | — |  |  | — |
European permanent deduction | (0.5 | ) |  | (3.4 | ) |  | (2.1 | )
Non deductible/non-taxable items | (0.5 | ) |  | 7.2 |  |  | 1.8 |
State income taxes, net of federal tax benefit | 2.8 |  |  | 1.7 |  |  | 3.2 |
Impact of repatriation of foreign earnings | — |  |  | — |  |  | 2.5 |
Other, net | 0.8 |  |  | (0.3 | ) |  | (1.8 | )
| (93.1 | )% |  | 24.3 | % |  | 32.4 | %
The 2017 Tax Cuts and Jobs Act ("Tax Reform") was enacted on December 22, 2017. The Tax Reform includes a number of changes in existing tax law impacting businesses, including a one-time deemed repatriation of cumulative undistributed foreign earnings and a permanent reduction in the U.S. federal statutory rate from 35% to 21%, effective on January 1, 2018. Under U.S. GAAP, changes in tax rates and tax law are accounted for in the period of enactment and deferred tax assets and liabilities are measured at the enacted tax rate. The rate reconciliation includes the Company’s assessment of the accounting under the Tax Reform which is preliminary and is based on information that was available to management at the time the consolidated financial statements were prepared. Estimated provisional amounts were recorded for the deemed repatriation toll charge implemented by the Tax Reform, related foreign tax credits, deferred tax revaluation amounts and deferred tax liabilities on unremitted earnings. Accordingly, the Company has determined a preliminary $31.9 million of tax benefit related to Tax Reform. This initial assessment is subject to adjustment in future periods for factors including the completion of federal and state tax returns for 2017 and finalization of gross deferred tax differences, future interpretive guidance expected to be issued by U.S. Treasury, future interpretive guidance issued by states regarding conformity with the Internal Revenue Code provisions as of December 31, 2017, ongoing IRS examinations and the additional time required to refine calculations. Further, additional time is required to complete the accounting for deferred taxes on permanently reinvested earnings and valuation allowance assessments. Adjustments will be completed within the measurement period prescribed by Staff Accounting Bulletin No. 118. The tax effects of the significant temporary differences which comprise the deferred income tax assets and liabilities at December 31, 2017 and 2016 are as follows:
| 2017 |  | 2016
Assets: |  |  |
Inventory | $ | 2,420 |  |  | $ | 3,769 |
Net operating losses | 11,091 |  |  | 34,669 |
Capitalized research and development | 8,557 |  |  | 6,257 |
Deferred compensation | 1,749 |  |  | 2,544 |
Accounts receivable | 1,855 |  |  | 3,186 |
Compensation and benefits | 4,138 |  |  | 6,645 |
Accrued pension | 2,695 |  |  | 4,530 |
Research and development credit | 8,957 |  |  | 8,164 |
Other | 9,342 |  |  | 2,001 |
Foreign tax credit | — |  |  | 1,112 |
Less: valuation allowances | (570 | ) |  | (441 | )
| 50,234 |  |  | 72,436 |
Liabilities: |  |  |  |
Goodwill and intangible assets | 102,099 |  |  | 168,509 |
Depreciation | 3,333 |  |  | 9,099 |
State taxes | 11,709 |  |  | 10,123 |
Unremitted foreign earnings | 6,000 |  |  | — |
Contingent interest | 40 |  |  | 136 |
| 123,181 |  |  | 187,867 |
Net liability | $ | (72,947 | ) |  | $ | (115,431 | )
Income before income taxes consists of the following U.S. and foreign income:
| 2017 |  | 2016 |  | 2015
U.S. income (loss) | $ | 1,492 |  |  | $ | (6,128 | ) |  | $ | 18,119 |
Foreign income | 27,240 |  |  | 25,503 |  |  | 27,025 |
Total income | $ | 28,732 |  |  | $ | 19,375 |  |  | $ | 45,144 |
As of December 31, 2017, the amount of federal net operating loss carryforward was $50.1 million and begins to expire in 2026. As of December 31, 2017, the amount of federal research credit carryforward available was $9.0 million. These credits begin to expire in 2027. During the fourth quarter of 2015, the Company repatriated $9.3 million of 2015 foreign earnings and recorded a tax charge of $1.1 million. The repatriated earnings represented a portion of the 2015 earnings of certain foreign subsidiaries and affiliates and thus were not previously permanently reinvested. There had been no change in our longer term international plans as our intent to indefinitely reinvest the remaining foreign earnings accumulated through the year ended December 31, 2016 had not changed. In accordance with Tax Reform, estimated provisional federal and state tax liabilities have been accrued on cumulative foreign subsidiary earnings at December 31, 2017. In addition, we have accrued an estimated provisional liability for foreign withholding taxes related to the amount of unremitted earnings at December 31, 2017 as they are not considered permanently reinvested. However, as previously noted, additional time is required to complete the accounting for deferred taxes on permanently reinvested earnings. Adjustments will be completed within the measurement period prescribed by Staff Accounting Bulletin No. 118. The Company is subject to taxation in the United States and various states and foreign jurisdictions. Taxing authority examinations can involve complex issues and may require an extended period of time to resolve. Our federal income tax returns have been examined by the Internal Revenue Service (“IRS”) for calendar years ending through 2016. We recognize tax liabilities in accordance with the provisions for accounting for uncertainty in income taxes. Such guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The following table summarizes the activity related to our unrecognized tax benefits for the years ending December 31,:
| 2017 |  | 2016 |  | 2015
Balance as of January 1, | $ | 1,839 |  |  | $ | 616 |  |  | $ | 581 |
Increases (decreases) for positions taken in prior periods | (246 | ) |  | — |  |  | 100 |
Increases for positions taken in current periods | 1,957 |  |  | 1,584 |  |  | — |
Decreases in unrecorded tax positions related to settlement with the taxing authorities | (607 | ) |  | (361 | ) |  | — |
Decreases in unrecorded tax positions related to lapse of statute of limitations | — |  |  | — |  |  | (65 | )
Balance as of December 31, | $ | 2,943 |  |  | $ | 1,839 |  |  | $ | 616 |
If the total unrecognized tax benefits of $2.9 million at December 31, 2017 were recognized, it would reduce our annual effective tax rate. The amount of interest accrued in 2015, 2016 and 2017 related to these unrecognized tax benefits was not material and is included in the provision (benefit) for income taxes in the consolidated statements of comprehensive income.

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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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