Note 8 - Income Taxes

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

8

– Income Taxes

The Company had unrecognized income tax benefits totaling

$2.6

million as a component of accrued liabilities on

September 30, 2018

and

December 31, 2017,

the total of which, if recognized, would impact the Company’s effective tax rate. An unfavorable settlement

may

require a charge to income tax expense and a favorable resolution would be recognized as a reduction to income tax expense. The Company recognizes interest accrued related to unrecognized tax benefits in income tax expense.

No

amounts were accrued for penalties. The Company had approximately

$166,000

accrued for the payment of interest on

September 30, 2018

and

December 31, 2017.

On

December 22, 2017,

the United States Congress enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (“the Tax Act”). The Tax Act included, among other items, a reduction of the U.S. federal corporate tax rate from

35%

to

21%

effective

January 1, 2018.

The Tax Act made broad and complex changes to the U.S. tax code, some of which affected the Company’s

2017

year end results. Staff Accounting Bulletin

No.

118

(SAB

118

) provided guidance that allowed registrants to provide a reasonable estimate of the effects of the Tax Act in their financial statements and adjust the reported impact in a measurement period

not

to exceed

one

year. The Company made a reasonable estimate of the effects of the Tax Act on its existing deferred tax balances and recognized a provisional net tax benefit of

$82.9

million which was recognized effective

December 31, 2017.

The provisional benefit recorded was primarily a result of the remeasurement of the Company’s deferred tax assets and liabilities at the tax rate in which they will reverse when they are recognized. The Company will continue to refine its calculations as additional analysis is completed. In addition, the Company’s estimates

may

also be affected as it gains a more thorough understanding of the Tax Act.

The Company does

not

anticipate a significant change in the amount of unrecognized tax benefits in the next

twelve

months. As of

September 30, 2018,

the tax years ended

December 31,

2014

through

2017

remain subject to audit by federal tax authorities and the tax years ended

December 31,

2013

through

2017

remain subject to audit by state tax authorities. In

June 2018,

the Company was notified of an examination of its federal income tax return for

2015.

The Company cannot predict the timing regarding resolution of this tax examination, however, the Company does

not

expect the examination to have a material impact on its financial statements.

The Company adopted ASU

2016

-

09

on

January 

1,

2017,

which requires excess tax benefits and tax deficiencies to be recognized as income tax benefit or expense in the income statement and presented as an operating activity in the statement of cash flows when the awards are vested or are settled. The Company recorded excess tax benefits of

$92,000

in the

three

months ended

September 30, 2018

and $

1.9

million in the

three

months ended

September 30, 2017,

which was recorded in the Consolidated Statements of Income and Comprehensive Income. The Company recorded excess tax benefits of

$0.3

million in the

nine

months ended

September 30, 2018

and

$3.9

million in the

nine

months ended

September 30, 2017,

which were recorded in the Consolidated Statements of Income and Comprehensive Income.