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INCOME TAXES (Tables)

12 Months Ended

Jul. 31, 2020

The sources of earnings before income taxes are as follows:


	For the Fiscal Year Ended July 31,
	2020		2019		2018
United States	$	258,483	$	200,859	$	633,029
Foreign	14,413		(16,193)		—
Total	$	272,896	$	184,666	$	633,029

The components of the provision (benefit) for income taxes are as follows:


	For the Fiscal Year Ended July 31,
Income Taxes:	2020		2019		2018
U.S. Federal	$	49,494	$	48,757	$	166,402
U.S. state and local	9,891		5,921		21,025
Foreign	1,842		6,611		—
Total current expense	61,227		61,289		187,427
U.S. Federal	6,472		10,862		17,820
U.S. state and local	(197)		(36)		(2,369)
Foreign	(15,990)		(19,914)		—
Total deferred expense (benefit)	(9,715)		(9,088)		15,451
Total income tax expense	$	51,512	$	52,201	$	202,878

The differences between income tax expense at the federal statutory rate and the actual income tax expense are as follows:


	For the Fiscal Year Ended July 31,
	2020		2019		2018
Provision at federal statutory rate	$	57,308	$	38,779	$	170,095
Differences between U.S. federal statutory and foreign tax rates	(50,898)		1,478		—
Foreign currency remeasurement (gains) and losses	30,246		(12,942)		—
U.S. state and local income taxes, net of federal benefit	7,616		4,642		14,255
Nondeductible compensation	2,249		2,401		—
Nondeductible acquisition costs	—		3,031		—
Nondeductible foreign currency forward contract loss on acquisition	—		14,863		—
Federal income tax credits and incentives	(1,738)		(3,373)		(3,518)
Domestic production activities deduction	—		—		(16,175)
Change in uncertain tax positions	1,101		1,279		396
Effect of the U.S. Tax Act	—		—		38,620
Other	5,628		2,043		(795)
Total income tax expense	$	51,512	$	52,201	$	202,878

A summary of the deferred income tax balances is as follows:


	July 31,
	2020		2019
Deferred income tax asset (liability):
Inventory basis	$	1,000	$	807
Employee benefits	7,353		5,272
Self-insurance reserves	4,923		5,185
Accrued product warranties	53,586		62,563
Accrued incentives	4,316		6,144
Sales returns and allowances	1,027		1,516
Accrued expenses	6,733		3,617
Property, plant and equipment	(28,438)		(22,699)
Operating leases	9,110		—
Deferred compensation	15,876		15,247
Intangibles	(147,423)		(143,861)
Net operating loss and other carryforwards	32,877		15,725
Unrealized (gain)/loss	4,892		(4,546)
Unrecognized tax benefits	3,046		2,689
Other	4,558		2,759
Valuation allowance	(18,500)		(12,945)
Deferred income tax (liability), net	$	(45,064)	$	(62,527)

Changes in the unrecognized tax benefit during fiscal years 2020, 2019 and 2018 were as follows:


	2020		2019		2018
Beginning balance	$	13,848	$	13,004	$	12,671
Tax positions related to prior years:
Additions	73		—		353
Reductions	(129)		(263)		(2,203)
Tax positions related to current year:
Additions	1,966		2,062		3,629
Settlements	—		(773)		(192)
Lapses in statute of limitations	(1,520)		(918)		(1,254)
Tax positions acquired from EHG	—		736		—
Ending balance	$	14,238	$	13,848	$	13,004

The components of total unrecognized tax benefits are summarized as follows:


	July 31,
	2020		2019
Unrecognized tax benefits	$	14,238	$	13,848
Reduction to unrecognized tax benefits which offset tax credit and loss carryforwards	(809)		(1,916)
Accrued interest and penalties	2,516		1,758
Total unrecognized tax benefits	$	15,945	$	13,690

Short-term, included in “Income and other taxes”	$	3,180	$	2,891
Long-term	12,765		10,799
Total unrecognized tax benefits	$	15,945	$	13,690

The major tax jurisdictions we file in, with the years still subject to income tax examinations, are listed below: