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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | 9. Income Taxes The provisions for taxes on income and the related income before taxes for the years ended December 31, 2016, 2015 and 2014, were as follows:
(In thousands) |  | 2016 |  |  | 2015 |  |  | 2014 |
Taxes on Income |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 18,811 |  |  | $ | 7,697 |  |  | $ | 3,362 |
Deferred |  |  | (3,192 | ) |  |  | 3,890 |  |  |  | 4,338 |
State |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 2,273 |  |  |  | 1,559 |  |  |  | 782 |
Deferred |  |  | (1,171 | ) |  |  | (225 | ) |  |  | 643 |
Foreign |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 14,960 |  |  |  | 14,562 |  |  |  | 9,004 |
Deferred |  |  | (4,063 | ) |  |  | (664 | ) |  |  | 325 |
Total |  | $ | 27,618 |  |  | $ | 26,819 |  |  | $ | 18,454 |
Income before Taxes |  |  |  |  |  |  |  |  |  |  |  |
Domestic |  | $ | 64,675 |  |  | $ | 48,721 |  |  | $ | 34,091 |
Foreign |  |  | 49,141 |  |  |  | 54,135 |  |  |  | 41,444 |
Total |  | $ | 113,816 |  |  | $ | 102,856 |  |  | $ | 75,535 |
The variations between the effective and statutory U.S. federal income tax rates are summarized as follows:
(In thousands) |  | 2016 Amount |  |  | % |  |  | 2015 Amount |  |  | % |  |  | 2014 Amount |  |  | % |
Federal income tax provision at statutory tax rate |  | $ | 39,836 |  |  |  | 35.0 |  |  | $ | 36,000 |  |  |  | 35.0 |  |  | $ | 26,437 |  |  |  | 35.0 |
State tax provision on income less applicable federal tax benefit |  |  | 716 |  |  |  | 0.6 |  |  |  | 867 |  |  |  | 0.8 |  |  |  | 926 |  |  |  | 1.2 |
Foreign income taxed at different rates |  |  | (6,325 | ) |  |  | (5.6 | ) |  |  | (5,060 | ) |  |  | (4.9 | ) |  |  | (5,416 | ) |  |  | (7.2 | )
Unrecognized tax benefits |  |  | 23 |  |  |  | 0.0 |  |  |  | 1,536 |  |  |  | 1.5 |  |  |  | 241 |  |  |  | 0.3 |
Domestic production activities deduction |  |  | (1,633 | ) |  |  | (1.4 | ) |  |  | (884 | ) |  |  | (0.9 | ) |  |  | (312 | ) |  |  | (0.4 | )
Nontaxable foreign interest income |  |  | (2,030 | ) |  |  | (1.8 | ) |  |  | (2,106 | ) |  |  | (2.0 | ) |  |  | (2,435 | ) |  |  | (3.2 | )
Stock based compensation, excess tax benefits(a) |  |  | (1,878 | ) |  |  | (1.7 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
U.S. tax credits |  |  | (1,100 | ) |  |  | (1.0 | ) |  |  | (3,465 | ) |  |  | (3.4 | ) |  |  | (1,086 | ) |  |  | (1.4 | )
Non-deductible expenses and other items, net(b) |  |  | 9 |  |  |  | 0.2 |  |  |  | (69 | ) |  |  | 0.0 |  |  |  | 99 |  |  |  | 0.1 |
Total income tax provision |  | $ | 27,618 |  |  |  | 24.3 |  |  | $ | 26,819 |  |  |  | 26.1 |  |  | $ | 18,454 |  |  |  | 24.4 |
(a) | Excess tax benefits related to employee share-based payment transactions recognized in 2016 resulting from early adoption of ASU No. 2016-9, as described in Note 1. There is no effect for 2014 and 2015 because the recognition of excess tax benefits in the tax provision is to be done only on a prospective basis, beginning with the year of adopting the new guidance.
(b) | Certain 2014 amounts have been reclassified to conform to the current year presentation.
At December 31, 2016 and 2015, the tax effects of significant temporary differences representing deferred tax assets and liabilities were as follows:
(In thousands) |  | 2016 |  |  | 2015 |
Deferred Tax Liabilities: |  |  |  |  |  |  |  |
Depreciation |  | $ | (75,973 | ) |  | $ | (69,975 | )
Unrealized foreign exchange loss |  |  | (631 | ) |  |  | (614 | )
Other |  |  | (2,756 | ) |  |  | (950 | )
|  | $ | (79,360 | ) |  | $ | (71,539 | )
Deferred Tax Assets: |  |  |  |  |  |  |  |
Pensions |  | $ | 12,077 |  |  | $ | 16,698 |
Deferred revenue |  |  | 940 |  |  |  | 1,377 |
Other accruals and reserves |  |  | 20,590 |  |  |  | 17,171 |
Inventories |  |  | 1,815 |  |  |  | 1,833 |
Legal and environmental accruals |  |  | 11,503 |  |  |  | 9,303 |
Deferred compensation |  |  | 24,485 |  |  |  | 17,828 |
Bad debt and rebate reserves |  |  | 4,195 |  |  |  | 3,685 |
Subsidiaries net operating loss carryforwards |  |  | 1,201 |  |  |  | 602 |
Tax credit carryforwards |  |  | 1,599 |  |  |  | 1,120 |
|  | $ | 78,405 |  |  | $ | 69,617 |
Valuation Allowance |  | $ | (1,815 | ) |  | $ | (1,443 | )
Net Deferred Tax Liabilities |  | $ | (2,770 | ) |  | $ | (3,365 | )
Reconciliation to Consolidated Balance Sheet: |  |  |  |  |  |  |  |
Non-current deferred tax assets (in other non-current assets) |  |  | 9,727 |  |  |  | 6,090 |
Non-current deferred tax liabilities |  |  | (12,497 | ) |  |  | (9,455 | )
Net Deferred Tax Liabilities |  | $ | (2,770 | ) |  | $ | (3,365 | )
Undistributed earnings of foreign subsidiaries and related companies that are deemed to be permanently reinvested amounted to $309,047,000 at December 31, 2016, compared to $266,317,000 at December 31, 2015. In general, the Company reinvests earnings of foreign subsidiaries in their operations indefinitely. However, the Company will repatriate earnings from a subsidiary where excess cash has accumulated and it is advantageous for tax or foreign exchange reasons. Because of the probable availability of foreign tax credits, it is not practicable to estimate the amount, if any, of the deferred tax liability on earnings reinvested indefinitely. The Company has tax loss carryforwards of $4,655,000 (pretax) as of December 31, 2016, and $2,224,000 as of December 31, 2015, that are available for use by the Company between 2017 and 2024. The Company has tax credit carryforwards of $1,599,000 as of December 31, 2016, and $1,120,000 as of December 31, 2015, that are available for use by the Company between 2017 and 2026. At December 31, 2016, the Company had valuation allowances of $1,815,000, which were primarily attributable to deferred tax assets in China, India and the Philippines. The realization of deferred tax assets is dependent on the generation of sufficient taxable income in the appropriate tax jurisdictions. The Company believes that it is more likely than not that the related deferred tax assets will not be realized. As of December 31, 2016 and 2015, unrecognized tax benefits totaled $1,931,000 and $1,958,000, respectively. The amount of unrecognized tax benefits that, if recognized, would favorably affect the Company’s effective income tax rate in any future periods, net of the federal benefit on state issues, was approximately $1,921,000, $1,948,000 and $454,000 at December 31, 2016, 2015 and 2014, respectively. The Company believes it is reasonably possible that the amount of unrecognized tax benefits related to its current uncertain tax positions could decrease by a range of approximately $0 to $1,500,000 over the next 12 months as a result of ongoing audits. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. In 2016, the Company recognized net interest and penalty expense of $9,000 compared to $6,000 of net interest and penalty expense in 2015 and $6,000 of net interest and penalty income in 2014. At December 31, 2016 the liability for interest and penalties was $53,000 compared to $44,000 at December 31, 2015. The Company files income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company is not subject to U.S. federal income tax examinations by tax authorities for years before 2011. In addition, 2013 is no longer subject to U.S. federal income tax examinations. Some foreign jurisdictions and various U.S. states jurisdictions may be subject to examination back to 2010. During 2016, the Internal Revenue Service started its audit of the 2011 and 2012 tax years. As of December 31, 2016, these audits were still open and the Company had not been notified of any significant proposed adjustments. Below are reconciliations of the January 1 and December 31 balances of unrecognized tax benefits for 2016, 2015 and 2014:
(In thousands) |  | 2016 |  |  | 2015 |  |  | 2014 |
Unrecognized tax benefits, opening balance |  | $ | 1,958 |  |  | $ | 464 |  |  | $ | 240 |
Gross increases – tax positions in prior period |  |  | — |  |  |  | 1,526 |  |  |  | — |
Gross increases – current period tax positions |  |  | 35 |  |  |  | 29 |  |  |  | 261 |
Foreign currency translation |  |  | (43 | ) |  |  | (37 | ) |  |  | (13 | )
Lapse of statute of limitations |  |  | (19 | ) |  |  | (24 | ) |  |  | (24 | )
Unrecognized tax benefits, ending balance |  | $ | 1,931 |  |  | $ | 1,958 |  |  | $ | 464 |

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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=65882285&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=65882285&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=65882285&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=65882285&loc=d3e32537-109319 + Details
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