

	2019			2018			2017
Current:
Federal	$	152		$	(202	)	$	(125	)
State	(90		)	147			(437		)
Foreign	10,070			12,675			15,223
	10,132			12,620			14,661
Deferred:
Federal	(148		)	(2,073		)	(2,164		)
State	—			—			—
Foreign	(682		)	(727		)	(2,206		)
	(830		)	(2,800		)	(4,370		)
Income Taxes	$	9,302		$	9,820		$	10,291

Included in the 2018 Federal deferred taxes is a benefit of $680,000 related to an intra-period allocation to continuing operations. A charge in an equal amount is in other comprehensive income. In addition, included in deferred federal taxes is a benefit of $148,000 and $2,023,000 in 2019 and 2018, respectively, which resulted from the effective of indefinite intangibles and a related 2018 indefinite loss carryforward created, due to the U.S. tax reform legislation, resulting in a deferred tax benefit.

The US Tax Cuts and Jobs Act of 2017 ("Tax Act") was enacted on December 22, 2017. The Tax Act subjects a US shareholder to current tax on global intangible low-taxed income (GILTI) earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. The company has elected to recognize the tax on GILTI as a period expense in the period the tax is incurred.

The SEC staff issued SAB 118, which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income

tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company's accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements.

Reduction of U.S. federal corporate tax rate: The US Tax Cuts and Jobs Act of 2017 reduces the corporate rate to 21%, effective January 1, 2018. Consequently, the company has provisionally recorded a decrease related to deferred tax assets and liabilities of $64,440,000 and $20,034,000, respectively, and has recorded a decrease to the valuation allowance of $45,986,000 with a corresponding net adjustment to deferred tax benefit of $1,580,000 for the year-ended December 31, 2017.

Deemed Repatriation Transition Tax: The Deemed Repatriation Transition tax (Transition Tax) is a tax on previously untaxed accumulated and current earnings and profit (E&P) of certain of our foreign subsidiaries. To determine the amount of Transition Tax, a company must determine, in addition to other factors, the amount of post-1986 E&P of the relevant subsidiaries as well as the amount of non-U.S. income taxes paid on such earnings. The company believed it had an overall foreign E&P deficit and accordingly did not record any provisional Transition Tax obligation as of December 31, 2017. During 2018, the company concluded it did not have a transitional tax liability.

The company determined at December 31, 2017 the provisional calculations would be finalized after the underlying timing differences and foreign earnings and profits were finalized with the company's 2017 federal tax return filing. The provision calculations were finalized in 2018 with the company's federal tax return.

The company has historically considered the undistributed earnings of the company's foreign subsidiaries to be indefinitely reinvested, and, accordingly, no taxes have been provided on such earnings (other than earnings of our Chinese subsidiary). The company continues to evaluate its plans for reinvestment or repatriation of unremitted foreign earnings and has not changed its previous indefinite reinvestment determination following the enactment of the Tax Act. As a result of U.S. tax reform legislation,

distributions of profits from non-U.S. subsidiaries are not expected to cause a significant incremental U.S. tax impact in the future. However, these distributions may be subject to non-U.S. withholding taxes if profits are distributed from certain jurisdictions. Undistributed profits of non-U.S. subsidiaries of approximately $36.3 million are considered indefinitely reinvested. Determination of the amount of unrecognized deferred tax liability related to indefinitely reinvested profits is not practicable.

The company regularly reviews its cash positions and its determination of permanent reinvestment of foreign earnings. If the company determines all or a portion of such foreign earnings are no longer indefinitely reinvested, the company may be subject to additional foreign withholding taxes and U.S. state income taxes.



	2019		2018		2017
Statutory federal income tax rate (benefit)	(21.0	)%	(21.0	)%	(35.0	)%
State and local income taxes, net of federal income tax benefit	(0.2	)	0.3		(0.4	)
Tax credits	—		—		(0.2	)
Expiring foreign tax credits	40.2		4.7		2.1
Foreign taxes at other than the federal statutory rate (including tax holidays)	5.1		12.9		(1.3	)
Federal and foreign valuation allowance	(20.4	)	35.6		46.2
Withholding taxes	0.1		0.2		0.1
Unremitted earnings	0.1		—		(1.1	)
Dividends	—		—		5.7
Debt repurchase	1.7		—		—
Foreign branch activity	12.4		0.1		(1.2	)
Uncertain tax positions	1.4		(1.9	)	0.1
Effects of US Tax Reform	—		—		(2.4	)
Intraperiod allocations to OCI	—		(2.0	)	—
Other, net	1.7		(0.1	)	2.9
Effective federal income tax rate	21.1	%	28.8	%	15.5	%

At December 31, 2019, total deferred tax assets were $178,632,000, total deferred tax liabilities were $38,290,000 and the tax valuation allowance total was $162,790,000 for a net deferred income tax liability of $22,448,000 compared to total deferred tax assets of $178,301,000, total deferred tax liabilities of $27,971,000 and a tax valuation allowance total of $174,659,000 for a net deferred income tax liability of $24,329,000 at December 31, 2018. The company recorded a valuation allowance for its U.S. and certain foreign country net deferred tax assets where it is or is projected to be in a three-year cumulative loss.



	2019			2018
Bad Debt	$	841		$	954
Warranty	1,391			2,134
Other accrued expenses and reserves	1,515			511
Inventory	2,993			2,878
Goodwill and intangibles	(22,686		)	(23,589		)
Convertible debt	(1,530		)	(1,225		)
Fixed assets	(13,421		)	(3,107		)
Compensation and benefits	5,965			6,268
Loss and credit carryforwards	121,602			131,896
Product liability	3,113			2,315
State and local taxes	31,499			31,345
Valuation allowance	(162,790		)	(174,659		)
Lease liability	9,713			—
Other, net	(653		)	(50		)
Net Deferred Income Taxes	$	(22,448	)	$	(24,329	)

The company made net payments for income taxes of $12,463,000, $15,820,000, and $15,377,000 during the years ended December 31, 2019, 2018 and 2017, respectively.

The company has a federal domestic net operating loss carryforward of $360,749,000 of which $287,360,000 expires between 2034 and 2037 and the remaining are non-expiring; domestic interest carryforward of $49,656,000 which is non-expiring and federal tax credit carryforwards of $15,838,000 of which $4,906,000 expire between 2020 and 2022 and $9,070,000 expire between 2023 and 2027, $1,862,000 expire between 2031 and 2037.

At December 31, 2019, the company also had $665,139,000 of domestic state and local tax loss carryforwards, of which $179,438,000 expire between 2020 and 2023, $229,018,000 expire between 2024 and 2033 and $235,221,000 expire after 2033 and $21,462,000 have an unlimited carryover.

At December 31, 2019, the company had foreign tax loss carryforwards of approximately $76,800,000 of which $16,069,000 expire by 2026 and the remaining are non-expiring all of which are offset by valuation allowances except for $582,000.

As of December 31, 2019 and 2018, the company had a liability for uncertain tax positions, excluding interest and penalties of $2,082,000 and $1,623,000, respectively. The total liabilities associated with unrecognized tax benefits that, if recognized, would impact the effective tax rates were $2,082,000 and $1,623,000 at December 31, 2019 and 2018, respectively.



	2019			2018
Balance at beginning of year	$	2,355		$	2,865
Additions to:
Positions taken during the current year	641			58
Positions taken during a prior year	52			163
Exchange rate impact	14			—
Deductions due to:
Exchange rate impact	—			(22		)
Positions taken during a prior year	—			(546		)
Lapse of statute of limitations	(190		)	(163		)
Balance at end of year	$	2,872		$	2,355

The company recognizes interest and penalties associated with uncertain tax positions in income tax expense. During 2019, 2018 and 2017 the expense (benefit) for interest and penalties was $13,000, $(322,000) and $30,000, respectively. The company had approximately $530,000 and $517,000 of accrued interest and penalties as of December 31, 2019 and 2018, respectively.

The company and its subsidiaries file income tax returns in the U.S. and certain foreign jurisdictions. The company is subject to U.S. federal income tax examinations for calendar years 2016 to 2019 with limited exceptions, and is subject to various U.S. state income tax examinations for 2015 to 2019. With regards to foreign income tax jurisdictions, the company is generally subject to examinations for the periods 2013 to 2019.