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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Taxes [Abstract] |
Income Taxes |
16. | Income Taxes
The income tax provision (benefit) consists of the following (in thousands):
|  | Year Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Current: |  |  |  |  |  |  |  |  |
Domestic |  | $ | 33,156 |  |  | $ | 22,943 |  |  | $ | 30,415 |
Foreign |  |  | 3,628 |  |  |  | 4,324 |  |  |  | 3,740 |
Total current |  |  | 36,784 |  |  |  | 27,267 |  |  |  | 34,155 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Domestic |  |  | (387 | ) |  |  | (1,210 | ) |  |  | (4,732 | )
Foreign |  |  | (239 | ) |  |  | (74 | ) |  |  | (569 | )
Total deferred |  |  | (626 | ) |  |  | (1,284 | ) |  |  | (5,301 | )
Total income tax provision |  | $ | 36,158 |  |  | $ | 25,983 |  |  | $ | 28,854 |
We have not provided for U.S. income taxes on the undistributed earnings of our foreign subsidiaries that are deferred from U.S. income taxation and that we intend to be permanently reinvested. Provision has been made for U.S. income taxes on the current earnings of our Canadian subsidiary as dividends are expected to be received from Canada related to these earnings. Cumulative undistributed earnings of foreign subsidiaries on which no U.S. income tax has been provided were $46.4 million at the end of 2016, $41.5 million at the end of 2015 and $35.2 million at the end of 2014. Earnings before income taxes for foreign operations amounted to approximately $10.8 million, $14.7 million and $11.6 million in 2016, 2015 and 2014, respectively. Reconciliations between taxes at the U.S. Federal income tax rate and taxes at our effective income tax rate on earnings from continuing operations before income taxes are as follows (in thousands):
|  | Year Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
U.S. Federal income tax rate of 35% |  | $ | 34,500 |  |  | $ | 25,936 |  |  | $ | 28,614 |
Increase (decrease) in tax rate resulting from: |  |  |  |  |  |  |  |  |  |  |  |
State and local income taxes, net of federal income tax benefit |  |  | 2,944 |  |  |  | 1,857 |  |  |  | 2,309 |
Income tax (tax benefits) attributable to foreign income |  |  | (887 | ) |  |  | (1,705 | ) |  |  | (1,511 | )
Change in unrecognized tax benefits |  |  | — |  |  |  | — |  |  |  | (350 | )
Other non-deductible items, net |  |  | (464 | ) |  |  | (192 | ) |  |  | 134 |
Change in valuation allowance |  |  | 65 |  |  |  | 87 |  |  |  | (342 | )
Provision for income taxes |  | $ | 36,158 |  |  | $ | 25,983 |  |  | $ | 28,854 |
The following is a summary of the components of the net deferred tax assets and liabilities recognized in the accompanying consolidated balance sheets (in thousands):
|  | December 31, |
|  | 2016 |  |  | 2015 |
Deferred tax assets: |  |  |  |  |  |
Inventories |  | $ | 18,323 |  |  | $ | 17,651 |
Allowance for customer returns |  |  | 15,092 |  |  |  | 14,551 |
Postretirement benefits |  |  | 607 |  |  |  | 1,127 |
Allowance for doubtful accounts |  |  | 1,589 |  |  |  | 1,512 |
Accrued salaries and benefits |  |  | 11,482 |  |  |  | 9,683 |
Capital loss |  |  | 234 |  |  |  | 234 |
Tax credit carryforwards |  |  | 420 |  |  |  | 381 |
Deferred gain on building sale |  |  | 489 |  |  |  | 891 |
Accrued asbestos liabilities |  |  | 12,638 |  |  |  | 13,098 |
|  |  | 60,874 |  |  |  | 59,128 |
Valuation allowance (1) |  |  | (505 | ) |  |  | (440 | )
Total deferred tax assets |  |  | 60,369 |  |  |  | 58,688 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation |  |  | 7,410 |  |  |  | 7,054 |
Promotional costs |  |  | — |  |  |  | 230 |
Other |  |  | 1,832 |  |  |  | 41 |
Total deferred tax liabilities |  |  | 9,242 |  |  |  | 7,325 |
Net deferred tax assets |  | $ | 51,127 |  |  | $ | 51,363 |
| (1) | Current net deferred tax assets are $40.6 million in both 2016 and 2015. Non-current net deferred tax assets are $10.5 million and $10.7 million for 2016 and 2015, respectively. The tax valuation allowance was allocated to long term deferred tax assets in the amounts of $0.5 million and $0.4 million for 2016 and 2015, respectively. None of the valuation allowance was allocated to current deferred tax assets in 2016 and 2015.
In assessing the realizability of the deferred tax assets, we consider whether it is more likely than not that some portion or the entire deferred tax asset will be realized. Ultimately, the realization of the deferred tax asset is dependent upon the generation of sufficient taxable income in those periods in which temporary differences become deductible and/or net operating loss carryforwards can be utilized. We consider the level of historical taxable income, scheduled reversal of temporary differences, carryback and carryforward periods, tax planning strategies and projected future taxable income in determining whether a valuation allowance is warranted. We also consider cumulative losses in recent years as well as the impact of one-time events in assessing our pre-tax earnings. Assumptions regarding future taxable income require significant judgment. Our assumptions are consistent with estimates and plans used to manage our business. The valuation allowance of $0.5 million as of December 31, 2016 was intended to provide for uncertainty regarding the ultimate realization of our U.S. foreign tax credit carryovers and foreign net operating loss carryovers. Based on these considerations, we believed it was more likely than not that we would realize the benefit of the net deferred tax asset of $51.1 million as of December 31, 2016, which was net of the remaining valuation allowance. At December 31, 2016, we have foreign tax credit carryforwards of approximately $0.4 million that will expire in varying amounts by 2024. In accordance with generally accepted accounting practices, we recognize in our financial statements only those tax positions that meet the more-likely-than-not recognition threshold. We establish tax reserves for uncertain tax positions that do not meet this threshold. During the years ended December 31, 2016 and 2015 we did not establish a liability for uncertain tax provisions. The amount of uncertain tax positions recognized in 2014 of $0.4 million reduced our 2014 annual effective tax rate by 0.43%. We are subject to taxation in the U.S. and various state, local and foreign jurisdictions. As of December 31, 2016, the Company is no longer subject to U.S. Federal tax examinations for years before 2013. We remain subject to examination by state and local tax authorities for tax years 2012 through 2015. Foreign jurisdictions have statutes of limitations generally ranging from 2 to 6 years. Years still open to examination by foreign tax authorities in major jurisdictions include Canada (2012 onward), Hong Kong (2011 onward), Mexico (2012 onward) and Poland (2011 onward). We do not presently anticipate that our unrecognized tax benefits will significantly increase or decrease over the next 12 months; however, actual developments in this area could differ from those currently expected.

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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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