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Income Taxes
 12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Provision for income taxes for the years ended December 31, consists of the following (in thousands): 
 
2019
 
2018
 
2017
Current:
 
 
 
 
 
Federal
$
82,484

 
$
136,202

 
$
245,189

State
6,421

 
23,134

 
24,898

Foreign
23,328

 
29,823

 
21,138

 
112,233

 
189,159

 
291,225

Deferred:
 
 
 
 
 
Federal
18,760

 
(23,181
)
 
47,046

State
402

 
(6,787
)
 
2,688

Foreign
2,385

 
(4,013
)
 
1,121

 
21,547

 
(33,981
)
 
50,855

 
$
133,780

 
$
155,178

 
$
342,080


During 2017, the Company recorded income tax expense of $53.1 million in connection with the enactment of the “Tax Cuts and Jobs Act” (2017 Tax Act). The Company completed its accounting for all of the initial income tax effects of the 2017 Tax Act during 2018 which resulted in a reduction to income tax expense during 2018 of $1.5 million.
The 2017 Tax Act subjects U.S. shareholders to current tax on global intangible low-taxed income (GILTI) earned by certain foreign subsidiaries for which a company can elect to either recognize deferred taxes or to provide tax expense in the year incurred. The Company has elected to account for GILTI in the year the tax is incurred.
The components of Income before provision for income taxes for the years ended December 31, were as follows (in thousands): 
 
2019
 
2018
 
2017
Domestic
$
465,798

 
$
593,099

 
$
788,878

Foreign
91,617

 
93,530

 
74,961

 
$
557,415

 
$
686,629

 
$
863,839


The Provision for income taxes differs from the amount that would be provided by applying the statutory U.S. corporate income tax rate for the years ended December 31, due to the following items: 
 
2019
 
2018
 
2017
Provision at statutory rate
21.0
 %
 
21.0
 %
 
35.0
 %
State taxes, net of federal benefit
2.5

 
2.6

 
1.9

Foreign rate differential
0.3

 
0.4

 
(0.8
)
Domestic manufacturing deduction
—

 
—

 
(2.2
)
Foreign derived intangible income
(0.6
)
 
(1.2
)
 
—

Research and development credit
(1.5
)
 
(1.1
)
 
(0.7
)
Unrecognized tax benefits including interest and penalties
0.1

 
(0.6
)
 
2.3

Valuation allowance adjustments
1.4

 
0.1

 
(0.1
)
State credits
(0.8
)
 
—

 
—

Deferred tax balance remeasurement for rate change
—

 
(1.2
)
 
5.5

Territorial tax
—

 
1.4

 
(0.1
)
Global intangible low-taxed income
0.2

 
0.4

 
—

Adjustments for previously accrued taxes
(0.3
)
 
(1.0
)
 
(1.2
)
Rate differential on intercompany transfers
—

 
0.9

 
—

Executive compensation limitation
0.5

 
0.5

 
—

Other foreign inclusions
0.8

 
—

 
—

Other
0.4

 
0.4

 
—

Provision for income taxes
24.0
 %
 
22.6
 %
 
39.6
 %

The principal components of the Company’s deferred income tax assets and liabilities as of December 31, include the following (in thousands): 
 
2019
 
2018
Deferred income tax assets:
 
 
 
Accruals not yet tax deductible
$
95,746

 
$
108,284

Pension and postretirement healthcare plan obligations
17,685

 
48,347

Stock compensation
11,867

 
13,295

Net operating loss carryforward
45,279

 
34,842

Valuation allowance
(29,024
)
 
(21,868
)
Other, net
64,833

 
43,870

 
206,386

 
226,770

Deferred income tax liabilities:
 
 
 
Depreciation, tax in excess of book
(83,477
)
 
(79,326
)
Other
(29,840
)
 
(5,980
)
 
(113,317
)
 
(85,306
)
 
$
93,069

 
$
141,464


The Company reviews its deferred income tax asset valuation allowances on a quarterly basis, or whenever events or changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred income tax asset is considered, along with any positive or negative evidence including tax law changes. Since future financial results and tax law may differ from previous estimates, periodic adjustments to the Company’s valuation allowances may be necessary.
The Company's gross state operating loss carryforwards were as follows as of December 31, (in thousands):
Year of Expiration
 
2019
2031
 
$
256,956

2033
 
166

2034
 
1,915

2038
 
4,460

2039
 
9,922

 
 
$
273,419


The Company also had Wisconsin research and development credit carryforwards of $18.1 million at December 31, 2019, expiring in 2024-2033.
At December 31, 2019, the Company had a deferred tax asset of $31.4 million related to its state operating loss and Wisconsin research and development credit carryforwards and a deferred tax asset of $13.8 million related to foreign net operating losses.
The Company's valuation allowance was $29.0 million at December 31, 2019 and included $9.6 million related to state operating loss and Wisconsin research and development credit carryforwards, $9.8 million related to foreign net operating losses and $9.6 million related to other deferred tax assets. The increase in the valuation allowance from prior year included $6.7 million related to state operating loss and Wisconsin research and development credit carryforwards and $0.4 million related to foreign net operating losses.
The Company recognizes interest and penalties related to unrecognized tax benefits in Provision for income taxes. Changes in the Company’s gross liability for unrecognized tax benefits, excluding interest and penalties, were as follows (in thousands): 
 
2019
 
2018
Unrecognized tax benefits, beginning of period
$
61,411

 
$
72,230

Increase in unrecognized tax benefits for tax positions taken in a prior period
1,067

 
940

Decrease in unrecognized tax benefits for tax positions taken in a prior period
(5,608
)
 
(9,783
)
Increase in unrecognized tax benefits for tax positions taken in the current period
4,576

 
3,355

Statute lapses
(325
)
 
—

Settlements with taxing authorities
(1,009
)
 
(5,331
)
Unrecognized tax benefits, end of period
$
60,112

 
$
61,411


The amount of unrecognized tax benefits as of December 31, 2019 and 2018 that, if recognized, would affect the effective tax rate was $53.1 million and $53.7 million, respectively.
The total gross amount of benefit related to interest and penalties associated with unrecognized tax benefits recognized during 2019, 2018 and 2017 in the Consolidated statements of income was $0.1 million, $3.2 million and $2.8 million, respectively.
The total gross amount of interest and penalties associated with unrecognized tax benefits recognized at December 31, 2019 and 2018 in the Consolidated balance sheets was $27.6 million and $27.7 million, respectively.
The Company does not expect a significant change to the total amounts of unrecognized tax benefits related to continuing operations during the fiscal year ending December 31, 2020. However, the Company is under regular audit by tax authorities. The Company believes that it has appropriate support for the positions taken on its tax returns and that its annual tax provision includes amounts sufficient to pay any assessments. Nonetheless, the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year.
The Company or one of its subsidiaries files income tax returns in the U.S. federal and Wisconsin state jurisdictions and various other state and foreign jurisdictions. The Company is no longer subject to income tax examinations for Wisconsin state income taxes before 2015 or for U.S. federal income taxes before 2014. The Company is currently under audit for U.S. federal income taxes for years 2015 and 2016.