Page 32 - 2019 Annual Report

NOTES TO FINANCIAL STATEMENTS (continued)

Texas, Colorado, North Carolina, Georgia and Iowa. The estimated fair values of accounts receivable approximate their
carrying amounts.
Notes receivable are primarily promissory notes with customers and are not publicly traded. Management estimates that the
fair value of notes receivable approximates its carrying amount.
Accounts payable represent amounts owed to suppliers and vendors. The estimated fair value of accounts payable
approximates its carrying amount due to the short‐term nature of the payables.
The carrying values and fair values of the Company’s long‐term debt were $2.77 billion and $2.94 billion, respectively, at
December 31, 2019 and $3.12 billion and $3.01 billion, respectively, at December 31, 2018. The estimated fair value of the
Company’s publicly‐registered long‐term debt was estimated based on Level 2 of the fair value hierarchy using quoted market
prices. The estimated fair values of other borrowings, which primarily represent variable‐rate debt, approximate their carrying
amounts as the interest rates reset periodically.

Note J: Income Taxes
The components of the Company’s income tax expense (benefit) are as follows:

years ended December 31
(in millions) 2019 2018 2017
Federal income taxes:
Current $ 83.9 $ 15.3 $ 129.2
Deferred 31.1 69.6 (239.3 )
Total federal income taxes 115.0 84.9 (110.1 )
State income taxes:
Current 20.5 6.0 14.8
Deferred (1.5 ) 14.1 (0.9 )
Total state income taxes 19.0 20.1 13.9
Foreign income taxes:
Current 2.8 (1.4 ) 1.2
Deferred (0.5 ) 2.1 0.5
Total foreign income taxes 2.3 0.7 1.7
Income tax expense (benefit) $ 136.3 $ 105.7 $ (94.5 )

On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act of 2017 (the 2017 Tax Act). The 2017 Tax Act
included provisions that lowered the federal statutory corporate income tax rate from 35% to 21% beginning in 2018, imposed
a one‐time transition tax on mandatory deemed repatriation of undistributed net earnings and changed how foreign earnings
are subject to U.S. tax. U.S. GAAP generally requires the effects of a tax law change to be recorded as a component of income
tax expense in the period of enactment. However, the SEC staff issued Staff Accounting Bulletin No. 118 (SAB 118), which
allowed companies to record provisional amounts during a measurement period of up to one year from enactment where the
necessary information was not available to complete the accounting for certain income tax effects of the 2017 Tax Act.
The Company recognized, on a provisional basis, a net tax benefit of $258.1 million related to the 2017 Tax Act for the
remeasurement of deferred tax assets and liabilities in its consolidated financial statements for the year ended December 31,
2017. In accordance with the provisions of SAB 118, the Company completed the accounting for the impact of the 2017 Tax
Act during the year ended December 31, 2018, and as a result recognized income tax expense of $1.1 million for the transition
tax on mandatory deemed repatriation of undistributed foreign earnings; income tax expense of $1.5 million for the write‐off
of deferred tax assets that will not be realized due to changes in the deductibility of executive compensation; and an income
tax benefit of $21.5 million primarily related to the accelerated deductions for pension funding, inventory and insurance
prepayments that were claimed on the Company’s 2017 income tax returns.
For the year ended December 31, 2018, the benefit related to the utilization of federal net operating loss (NOL) carryforwards,
reflected in current tax expense, was $5.8 million.
For the years ended December 31, 2019, 2018 and 2017, foreign pretax earnings were $15.1 million, $5.7 million and $10.6
million, respectively.

Page 30 ♦ Annual Report Celebrating 25 Years as a Public Company