Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Provision for Taxes on Income and Other Related Income Before Taxes

The provisions for taxes on income and the related income before taxes for the years ended December 31, 2019, 2018 and 2017, were as follows:

(In thousands)	2019			2018 As Adjusted			2017 As Adjusted
Taxes on Income
Federal
Current	$	9,998		$	(296	)	$	32,299
Deferred ⁽¹⁾		(2,879	)		8,876			(3,690	)
State
Current		2,248			2,095			1,764
Deferred ⁽¹⁾		(1,783	)		1,821			587
Foreign
Current		15,568			14,510			13,077
Deferred		(354	)		(342	)		2,102
Total ⁽¹⁾	$	22,798		$	26,664		$	46,139
Income before Taxes
Domestic ⁽¹⁾	$	63,399		$	86,368		$	80,307
Foreign		62,500			51,401			66,575
Total ⁽¹⁾	$	125,899		$	137,769		$	146,882

(1)

The 2018 and 2017 amounts for the noted line items have been retrospectively changed from the amounts originally reported as a result of the Company’s first quarter 2019 change in method of accounting for U.S. inventory valuation from LIFO to FIFO.

Summary of Variations Between the Effective and Statutory U.S. Federal Income Tax Rates

The variations between the effective and statutory U.S. federal income tax rates are summarized as follows:

(In thousands)	2019 Amount			%			2018 Amount As Adjusted			%			2017 Amount As Adjusted			%
Federal income tax provision at statutory tax rate ⁽¹⁾	$	26,439			21.0		$	28,931			21.0		$	51,409			35.0
State income tax provision, less applicable federal tax benefit ⁽¹⁾⁽²⁾		367			0.3			3,094			2.2			1,528			1.0
Foreign income taxed at different rates		623			0.5			864			0.6			(8,075	)		(5.5	)
U.S. taxation of foreign earnings ⁽³⁾		2,349			1.9			2,348			1.7			(1,054	)		(0.7	)
Unrecognized tax benefits		2,954			2.3			(460	)		(0.3	)		(47	)		—
Domestic production activities deduction		—			—			—			—			(1,339	)		(0.9	)
Nontaxable foreign interest income		—			—			(1,179	)		(0.9	)		(2,073	)		(1.4	)
U.S. tax reform, net impact ⁽⁴⁾		—			—			(375	)		(0.3	)		10,323			7.0
Change in accounting methods ⁽⁵⁾		—			—			(3,383	)		(2.5	)		(893	)		(0.6	)
Prior years return to provision true-up ⁽⁶⁾		(1,740	)		(1.4	)		(508	)		(0.4	)		(266	)		(0.2	)
Stock based compensation, excess tax benefits		(1,633	)		(1.3	)		(1,648	)		(1.2	)		(2,254	)		(1.5	)
U.S. tax credits ⁽⁷⁾		(6,412	)		(5.1	)		(1,324	)		(1.0	)		(1,204	)		(0.8	)
Non-deductible expenses and other items, net		(149	)		(0.1	)		304			0.5			84			0.0
Total income tax provision ⁽¹⁾	$	22,798			18.1		$	26,664			19.4		$	46,139			31.4

(1)	The 2018 and 2017 amounts for the noted line items have been retrospectively changed from the amounts originally reported as a result of the Company’s first quarter 2019 change in method of accounting for U.S. inventory valuation from LIFO to FIFO.

(2)	Includes incremental state research credits for the tax years 2015 - 2019 that were identified as part of a research and development tax credit study.

(3)	Includes cost of global intangible low-taxed income (GILTI) in 2019 and 2018 plus other taxes paid or withheld on cash repatriated from foreign countries in 2019 and 2018.

(4)	Does not include state tax impacts, which are included in state income tax provision, less applicable federal tax benefit.

(5)	For 2018, amount represents the federal tax rate change due to certain accounting methods that were adopted on the 2017 federal income tax return. For 2017, amount represents an accounting method change for depreciation.

(6)	Certain 2018 and 2017 amounts have been reclassified to conform to the 2019 presentation.

(7)	Includes incremental federal research credits for 2015 - 2019 that were identified as part of a research and development tax credit study. Also includes a federal tax rate change due to the classification of certain 2016 and 2017 depreciable fixed assets as deductible research costs.

Schedule Showing Tax Effects of Significant Temporary Differences Representing Deferred Tax Assets and Liabilities

At December 31, 2019 and 2018, the tax effects of significant temporary differences representing deferred tax assets and liabilities were as follows:

(In thousands)	2019			2018 As Adjusted
Deferred Tax Liabilities:
Depreciation	$	(59,574	)	$	(57,665	)
Unrealized foreign exchange loss		(1,479	)		(980	)
Amortization of intangibles		(835	)		(1,016	)
Inventories ⁽¹⁾		(5,855	)		(8,429	)
Other		(307	)		(301	)
	$	(68,050	)	$	(68,391	)
Deferred Tax Assets:
Pensions	$	5,855		$	7,971
Deferred revenue		161			208
Other accruals and reserves		12,171			13,123
Legal and environmental accruals		7,758			7,143
Deferred compensation		15,816			14,214
Bad debt and rebate reserves		2,604			2,916
Non-U.S. subsidiaries net operating loss carryforwards		3,966			3,869
Tax credit carryforwards		5,200			2,141
	$	53,531		$	51,585
Valuation Allowance	$	(2,994	)	$	(3,701	)
Net Deferred Tax Liabilities	$	(17,513	)	$	(20,507	)
Reconciliation to Consolidated Balance Sheet:
Non-current deferred tax assets (in other non-current assets) ⁽¹⁾		5,878			4,454
Non-current deferred tax liabilities		(23,391	)		(24,961	)
Net Deferred Tax (Liabilities) Assets	$	(17,513	)	$	(20,507	)

(1)

The 2018 amounts for the noted line items have been retrospectively changed from the amounts originally reported as a result of the Company’s first quarter 2019 change in method of accounting for U.S. inventory valuation from LIFO to FIFO.

Schedule of Reconciliations of Unrecognized Tax Benefits

Below are reconciliations of the January 1 and December 31 balances of unrecognized tax benefits for 2019, 2018 and 2017:

(In thousands)	2019			2018			2017
Unrecognized tax benefits, opening balance	$	168		$	1,927		$	1,931
Gross increases – tax positions in prior period		2,760			29			—
Gross increases – current period tax positions		355			26			20
Foreign currency translation		7			1			69
Settlement		—			(1,526	)		—
Lapse of statute of limitations		(17	)		(289	)		(93	)
Unrecognized tax benefits, ending balance	$	3,273		$	168		$	1,927