Graco Inc.

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SEC Filings

10-K
GRACO INC filed this Form 10-K on 02/16/2016
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Earnings before income tax expense consist of (in thousands):
 
2015
 
2014
 
2013
Domestic
$
402,453

 
$
266,627

 
$
238,928

Foreign
72,260

 
48,446

 
49,894

Total
$
474,713

 
$
315,073

 
$
288,822


Income tax expense consists of (in thousands):
 
2015
 
2014
 
2013
Current
 
 
 
 
 
Domestic
 
 
 
 
 
Federal
$
117,883

 
$
73,584

 
$
64,753

State and local
4,576

 
2,775

 
2,470

Foreign
18,115

 
12,263

 
11,569

 
140,574

 
88,622

 
78,792

Deferred
 
 
 
 
 
Domestic
(10,175
)
 
2,497

 
(553
)
Foreign
(1,399
)
 
(1,619
)
 
(239
)
 
(11,574
)
 
878

 
(792
)
Total
$
129,000

 
$
89,500

 
$
78,000


Income taxes paid were $150.5 million in 2015, $92.1 million in 2014 and $78.0 million in 2013.

A reconciliation between the U.S. federal statutory tax rate and the effective tax rate follows:
 
2015
 
2014
 
2013
Statutory tax rate
35
 %
 
35
 %
 
35
 %
Tax effect of international operations
(3
)
 
(1
)
 
(1
)
State taxes, net of federal effect
1

 
1

 
1

U.S. general business tax credits
(1
)
 
(1
)
 
(2
)
Domestic production deduction
(2
)
 
(3
)
 
(3
)
Dividends from Liquid Finishing
(3
)
 
(3
)
 
(3
)
Effective tax rate
27
 %
 
28
 %
 
27
 %

Deferred income taxes are provided for temporary differences between the financial reporting and the tax basis of assets and liabilities. The deferred tax assets (liabilities) resulting from these differences were as follows (in thousands):
 
2015
 
2014
Inventory valuations
$
8,455

 
$
9,163

Self-insurance retention accruals
1,918

 
2,098

Warranty reserves
2,191

 
2,074

Vacation accruals
3,055

 
3,023

Bad debt reserves
3,268

 
2,409

Unremitted earnings of consolidated foreign subsidiaries

 
(7,316
)
Excess of tax over book depreciation
(52,667
)
 
(50,664
)
Pension liability
35,916

 
35,247

Postretirement medical
6,882

 
7,743

Acquisition costs
3,378

 
3,369

Stock compensation
20,817

 
16,657

Deferred compensation
1,372

 
1,350

Other
88

 
(399
)
Net deferred tax assets
$
34,673

 
$
24,754



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