Page 56 - 2018 Annual Report
P. 56

                 Table of Contents
 The exercise of non-qualified stock appreciation rights and options during fiscal 2018, 2017 and 2016 resulted in $419, $1,921 and $212, respectively, of income tax benefits to the Company derived from the difference between the market and option price of the shares at the date of exercise and the fair value of the options on the grant date. Vesting of stock awards and other stock compensation in fiscal 2018, 2017 and 2016 resulted in $430, $482 and $(4), respectively, of incremental income tax benefits (expense) over the amounts previously reported for financial reporting purposes. Due to the adoption of ASU 2016-09 in fiscal 2017, the tax benefits for fiscal 2018 and 2017 were recorded in income tax expense in the statements of consolidated income, while the fiscal 2016 tax expense was recorded in additional paid-in capital.
Effective Tax Rates
The following reconciles the U.S. federal statutory income tax rate to the Company’s effective income tax rate:
Year Ended June 30, 2017 Statutory income tax rate 35.0% Effects of:
State and local taxes 2.8 U.S. federal tax reform — Worthless stock deduction (13.9) Stock compensation (1.4) Goodwill impairment — Impact of foreign operations (2.3) Deductible dividend (0.4) Valuation allowance 0.3 Other, net (0.3)
Effective income tax rate         19.8%
Consolidated Balance Sheets
Significant components of the Company’s deferred tax assets and liabilities are as follows:
June 30,
Deferred tax assets:
Compensation liabilities not currently deductible
Other expenses and reserves not currently deductible Goodwill and intangibles
Foreign tax credit (expiring in years 2025-2026)
Net operating loss carryforwards (expiring in years 2023-2038) Other
Total deferred tax assets
Less: Valuation allowance
Deferred tax assets, net of valuation allowance Deferred tax liabilities:
Inventories
Goodwill and intangibles
Depreciation and differences in property bases
$
2016 35.0%
5.2 — — — 27.1
(3.0) (0.9) 0.5 (1.3)
62.6%
2017
26,873 11,601 5,661 709 5,729 119 50,692
(1,831) 48,861
(7,447) (30,482) (10,122) (48,051)
810
8,985 (8,175)
810
 2018
  28.1%
3.1 3.1 — (0.4) — (1.3) (0.3) (0.9) (0.6)
30.8%
              2018
 $ 19,334 13,169 3,197 413 11,315 199
47,627 (38)
 47,589
  (8,196) (86,176) (9,294)
(103,666)
 $ (56,077)
 $ 2,103 (58,180)
$ (56,077)
               Total deferred tax liabilities
Net deferred tax (liabilities) assets         $ Net deferred tax (liabilities) assets are classified as follows:
     $ Net deferred tax (liabilities) assets         $
Other assets
Other liabilities
   Valuation allowances are provided against deferred tax assets where it is considered more-likely-than-not that the Company will not realize the benefit of such assets. The remaining net deferred tax asset is the amount
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