Graco Inc.

    Print Page | Close Window

SEC Filings

10-K
GRACO INC filed this Form 10-K on 02/21/2017
Entire Document
 << Previous Page | Next Page >>


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):
 
2016
 
2015
Inventory valuations
$
9,845

 
$
8,455

Self-insurance retention accruals
1,836

 
1,918

Warranty reserves
2,390

 
2,191

Vacation accruals
3,343

 
3,055

Bad debt reserves
3,824

 
3,268

Excess of tax over book depreciation and amortization
(31,849
)
 
(52,667
)
Pension liability
43,924

 
35,916

Postretirement medical
6,856

 
6,882

Acquisition costs
1,052

 
3,378

Stock compensation
24,521

 
20,817

Deferred compensation
1,495

 
1,372

Other
1,744

 
88

Net deferred tax assets
$
68,981

 
$
34,673


Total deferred tax assets were $103.4 million and $99.3 million, and total deferred tax liabilities were $34.5 million and $64.6 million on December 30, 2016 and December 25, 2015. The difference between the deferred income tax provision and the change in net deferred income taxes is due to the change in other comprehensive income (loss) items and the impact of acquisitions.

The Company files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2010.

The Company records penalties and accrued interest related to uncertain tax positions in income tax expense. Total reserves for uncertain tax positions were not material.

F. Debt

A summary of debt follows (dollars in thousands):
 
Average Interest Rate
 
 
 
 
 
 
 
December 30, 2016
 
Maturity
 
2016
 
2015
Private placement unsecured fixed-rate notes
 
 
 
 
 
 
 
Series A
4.00%
 
March 2018
 
$
75,000

 
$
75,000

Series B
5.01%
 
March 2023
 
75,000

 
75,000

Series C
4.88%
 
January 2020
 
75,000

 
75,000

Series D
5.35%
 
July 2026
 
75,000

 
75,000

Unsecured revolving credit facility
1.77%
 
December 2021
 
5,685

 
92,695

Notes payable to banks
0.68%
 
2017
 
8,913

 
15,901

Total debt, including current portion
 
 
 
 
$
314,598

 
$
408,596


The estimated fair value of the fixed interest rate private placement debt was $325 million on December 30, 2016 and $320 million on December 25, 2015. The fair value of variable rate borrowings approximates carrying value. The Company uses significant other observable inputs to estimate fair value (level 2 of the fair value hierarchy) based on the present value of future cash flows and rates that would be available for issuance of debt with similar terms and remaining maturities.

On December 15, 2016, the Company executed an amendment to its revolving credit agreement, extending the expiration date to December 15, 2021 and decreasing certain interest rates and fees. The amended agreement with a syndicate of lenders provides up to $500 million of committed credit, available for general corporate purposes, working capital needs, share repurchases and acquisitions. The Company may borrow up to $50 million under the swingline portion of the facility for daily working capital needs.

43

 << Previous Page | Next Page >>