| Reconciliation of Statutory Federal Income Tax Rate to Effective Rate |
The following is a reconciliation of the statutory federal income tax rate to the effective rate reported in the financial statements:
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Year Ended December 31, |
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2019 |
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2018 |
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2017 |
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(percent of income) |
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| Provision for federal income taxes at the statutory rate |
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21.0 |
% |
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21.0 |
% |
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35.0 |
% |
| State and local income taxes, net of federal benefit |
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1.7 |
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2.0 |
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0.4 |
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| Non-United States income taxed at different rates |
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(0.1) |
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(0.1) |
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(7.8) |
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| Foreign tax credits |
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(0.1) |
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— |
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(0.1) |
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| Adjustment to deferred taxes |
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(2.1) |
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— |
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(3.0) |
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| Global Intangible Low-Taxed Income |
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— |
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0.4 |
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— |
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| Research credits |
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(0.5) |
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(0.6) |
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(0.7) |
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| Withholding taxes |
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0.3 |
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0.4 |
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— |
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| Excess tax benefits from stock plans |
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(1.6) |
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(1.4) |
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(2.3) |
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| Other |
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(0.1) |
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0.7 |
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0.5 |
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| Actual provision for income taxes, pre-provisional TCJA expense |
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18.5 |
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22.4 |
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22.0 |
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| Effects of the TCJA: |
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| Reduction of United States federal corporate tax rate |
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— |
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(0.4) |
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5.6 |
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| Transition tax on foreign earnings |
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— |
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1.5 |
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18.7 |
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| Deferred tax liability associated with future repatriations |
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— |
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0.5 |
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8.9 |
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| Foreign tax credits |
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— |
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(0.2) |
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2.7 |
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| Provision for income taxes related to the TCJA |
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— |
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1.4 |
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35.9 |
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| Actual provision for income taxes |
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18.5 |
% |
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23.8 |
% |
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57.9 |
% |
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| Significant Components of Deferred Taxes |
Significant components of the Company's deferred taxes consisted of the following (in thousands):
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December 31, |
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(in thousands) |
|
2019 |
|
2018 |
| Deferred tax assets: |
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| Accruals and allowances |
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$ |
38,532 |
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$ |
39,276 |
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| Capitalized inventory costs |
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34,389 |
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34,548 |
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| Stock compensation |
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5,013 |
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4,318 |
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| Net operating loss carryforwards |
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23,660 |
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18,800 |
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| Depreciation and amortization |
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32,293 |
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39,511 |
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| Tax credits |
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2,329 |
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1,353 |
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| Other |
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2,258 |
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1,570 |
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| Gross deferred tax assets |
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138,474 |
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139,376 |
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| Valuation allowance |
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(24,130) |
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(18,550) |
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| Net deferred tax assets |
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114,344 |
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120,826 |
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| Deferred tax liabilities: |
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| Depreciation and amortization |
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(15,738) |
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(22,048) |
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| Prepaid expenses |
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(2,661) |
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(2,301) |
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| Deferred tax liability associated with future repatriations |
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(19,847) |
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(21,323) |
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| Foreign currency loss |
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(3,610) |
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(6,520) |
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| Gross deferred tax liabilities |
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(41,856) |
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(52,192) |
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| Total net deferred taxes |
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$ |
72,488 |
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$ |
68,634 |
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| Reconciliation of Unrecognized Tax Benefits |
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:
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December 31, |
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(in thousands) |
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2019 |
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2018 |
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2017 |
| Balance at beginning of year |
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$ |
11,064 |
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$ |
10,512 |
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$ |
9,998 |
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| Increases related to prior year tax positions |
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4,374 |
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|
490 |
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|
858 |
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| Decreases related to prior year tax positions |
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(5,423) |
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(1,093) |
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(2,895) |
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| Increases related to current year tax positions |
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4,991 |
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1,818 |
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2,714 |
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| Settlements |
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(1,464) |
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|
319 |
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— |
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| Expiration of statute of limitations |
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(1,064) |
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(982) |
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(163) |
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| Balance at end of year |
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$ |
12,478 |
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$ |
11,064 |
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$ |
10,512 |
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