Astronics Corporation Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

The provision (benefit) for income taxes at December 31 consists of the following:

The effective tax rates differ from the statutory federal income tax rate as follows:


	2018		2017		2016
Statutory Federal Income Tax Rate	21.0	%	35.0	%	35.0	%
Permanent Items
Stock Compensation Expense	(0.9)	%	1.1	%	1.1	%
Domestic Production Activity Deduction	—	%	(4.7)	%	(3.3)	%
Other	0.4	%	0.5	%	0.2	%
Foreign Tax Benefits	0.5	%	(5.6)	%	(1.1)	%
State Income Tax, Net of Federal Income Tax Effect	2.8	%	4.5	%	1.8	%
Revised State Filing Tax Benefit, Net of Federal Income Tax Effect, Net of Reserve	(6.7)	%	—	%	—	%
Research and Development Tax Credits	(6.2)	%	(11.5)	%	(3.7)	%
Tax Expense on Deemed Repatriation of Foreign Earnings	(0.8)	%	5.6	%	—	%
Revaluation of Deferred Taxes for Federal Tax Rate Change	(0.1)	%	(3.5)	%	—	%
Other	0.5	%	(0.1)	%	(0.4)	%
Effective Tax Rate	10.5	%	21.3	%	29.6	%

Significant components of the Company’s deferred tax assets and liabilities at December 31, are as follows:


(In thousands)	2018		2017
Deferred Tax Assets:
Asset Reserves	$	8,808	$	7,596
Deferred Compensation	5,628		6,091
Capital Lease Basis Difference	1,743		1,002
State Investment and Research and Development Tax Credit Carryforwards, Net of Federal Tax	1,066		1,379
Customer Advanced Payments and Deferred Revenue	875		1,007
State Net Operating Loss Carryforwards and Other	8,281		8,115
Total Gross Deferred Tax Assets	26,401		25,190
Valuation Allowance for Foreign Tax Credit, State Deferred Tax Assets and Tax Credit Carryforwards, Net of Federal Tax	(8,098)		(7,823)
Deferred Tax Assets	18,303		17,367
Deferred Tax Liabilities:
Depreciation	11,687		9,267
Goodwill and Intangible Assets	4,438		7,275
Other	3,812		3,130
Deferred Tax Liabilities	19,937		19,672
Net Deferred Tax Liabilities	$	(1,634)	$	(2,305)

The net deferred tax assets and liabilities presented in the Consolidated Balance Sheets are as follows at December 31:


(In thousands)	2018		2017
Other Assets — Long-term	$	3,999	$	2,816
Assets Held for Sale	(1,528)		—
Deferred Tax Liabilities — Long-term	(3,199)		(5,121)
Liabilities Held for Sale	(906)		—
Net Deferred Tax Liabilities	$	(1,634)	$	(2,305)

A reconciliation of the total amounts of unrecognized tax benefits, excluding interest and penalties, is as follows:


(in thousands)	2018		2017		2016
Balance at Beginning of the Year	$	—	$	—	$	—
Decreases as a Result of Tax Positions Taken in Prior Years	—		—		—
Increases as a Result of Tax Positions Taken in the Current Year	2,197		—		—
Balance at End of the Year	2,197		$	—	$	—