Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Components of Income Tax Expense Benefit

Income before income taxes and equity in net income of unconsolidated investments, and current and deferred income tax expense (benefit) are composed of the following (in thousands):

	Year Ended December 31,
	2019			2018			2017
Income before income taxes and equity in net income of unconsolidated investments:
Domestic	$	190,195		$	223,702		$	(8,293	)
Foreign	372,755			570,999			455,091
Total	$	562,950		$	794,701		$	446,798
Current income tax expense (benefit):
Federal	$	21,258		$	(2,712	)	$	394,747
State	5,453			6,793			323
Foreign	47,056			91,581			78,688
Total	$	73,767		$	95,662		$	473,758
Deferred income tax (benefit) expense:
Federal	$	13,255		$	15,573		$	(58,640	)
State	(7,369		)	1,614			(2,288		)
Foreign	8,508			31,977			18,987
Total	$	14,394		$	49,164		$	(41,941	)
Total income tax expense	$	88,161		$	144,826		$	431,817

Significant Differences Between United States Federal Statutory Rate and Effective Income Tax Rate

The reconciliation of the U.S. federal statutory rate to the effective income tax rate is as follows:

	% of Income Before Income Taxes
	2019		2018		2017
Federal statutory rate	21.0	%	21.0	%	35.0	%
State taxes, net of federal tax benefit	(0.5	)	0.9		(0.5	)
Change in valuation allowance (a)	1.9		0.7		(1.4	)
Impact of foreign earnings, net(b)	(3.7	)	(0.3	)	(13.5	)
Global intangible low tax inclusion	1.8		0.8		—
Change in U.S. federal statutory rate(c)	—		0.1		(14.0	)
Transition tax on deferred foreign earnings(d)	—		(5.3	)	96.1
Subpart F income	0.6		0.9		2.0
Undistributed earnings of foreign subsidiaries	—		—		(2.2	)
Stock-based compensation	(0.6	)	(0.7	)	(1.9	)
Depletion	(0.7	)	(0.6	)	(1.4	)
Revaluation of unrecognized tax benefits/reserve requirements	(2.7	)	—		(0.7	)
Other items, net	(1.4	)	0.7		(0.9	)
Effective income tax rate	15.7	%	18.2	%	96.6	%

(a) The year ended December 31, 2019 includes a $2.1 million benefit due to the release of a foreign valuation allowance due to changes in expected profitability. 2018 includes an $8.2 million expense due to the establishment of a valuation allowance due to a foreign restructuring plan and a $1.5 million benefit due to the release of a foreign valuation allowance due to changes in expected profitability. 2017 includes a $10.9 million benefit from the release of valuation allowances due to a foreign restructuring plan.

(b) Our statutory rate is decreased by of our share of the income of JBC, a Free Zones company under the laws of the Hashemite Kingdom of Jordan. The applicable provisions of the Jordanian law, and applicable regulations thereunder, do not have a termination provision and the exemption is indefinite. As a Free Zones company, JBC is not subject to income taxes on the profits of products exported from Jordan, and currently, substantially all of the profits are from exports. This resulted in a rate benefit of 8.0%, 3.3%, and 8.9% for 2019, 2018, and 2017, respectively.

(c) At December 31, 2017 we made a reasonable estimate of the tax impact of the U.S. enacted tax law on our business and our consolidated financial statements and recorded a provisional tax benefit of $62.3 million related to the remeasurement of our deferred tax assets and liabilities for the reduction in the Federal statutory tax rate from 35% to 21%. In 2018, the updates to our calculation of the remeasurement of deferred tax assets and liabilities resulted in income tax expense of $0.4 million.

(d) At December 31, 2017 we made a reasonable estimate of the tax impact of the U.S. enacted tax law on our business and our consolidated financial statements and recognized a provisional tax expense of $429.2 million for the one-time transition tax. During 2018, the impact of the refined one-time transition tax calculation was an income tax benefit of $42.3 million.

Deferred Income Tax Assets and Liabilities Recorded on Consolidated Balance Sheets

Deferred income tax assets and liabilities recorded on the consolidated balance sheets as of December 31, 2019 and 2018 consist of the following (in thousands):

	December 31,
	2019			2018
Deferred tax assets:
Accrued employee benefits	$	17,462		$	18,462
Operating loss carryovers	1,134,410			1,210,377
Pensions	64,230			61,308
Tax credit carryovers	1,497			1,270
Other	64,955			35,895
Gross deferred tax assets	1,282,554			1,327,312
Valuation allowance	(1,148,268		)	(1,213,750		)
Deferred tax assets	134,286			113,562
Deferred tax liabilities:
Depreciation	(349,264		)	(337,503		)
Intangibles	(88,934		)	(88,871		)
Hedge of net investment of foreign subsidiary	(23,498		)	(21,854		)
Other	(55,173		)	(31,287		)
Deferred tax liabilities	(516,869		)	(479,515		)
Net deferred tax liabilities	$	(382,583	)	$	(365,953	)
Classification in the consolidated balance sheets:
Noncurrent deferred tax assets	$	15,275		$	17,029
Noncurrent deferred tax liabilities	(397,858		)	(382,982		)
Net deferred tax liabilities	$	(382,583	)	$	(365,953	)

Changes in Balance of Deferred Tax Asset Valuation Allowance

Changes in the balance of our deferred tax asset valuation allowance are as follows (in thousands):

	Year Ended December 31,
	2019			2018			2017
Balance at January 1	$	(1,213,750	)	$	(458,288	)	$	(69,900	)
Additions(a)	(24,986		)	(766,012		)	(408,252		)
Deductions	90,468			10,550			19,864
Balance at December 31	$	(1,148,268	)	$	(1,213,750	)	$	(458,288	)

Reconciliation of Total Gross Liability Related to Uncertain Tax Positions

The following is a reconciliation of our total gross liability related to uncertain tax positions for 2019, 2018 and 2017 (in thousands):

	Year Ended December 31,
	2019			2018			2017
Balance at January 1	$	19,742		$	21,438		$	25,384
Additions for tax positions related to prior years	2,235			874			—
Reductions for tax positions related to prior years	—			—			(1,933		)
Additions for tax positions related to current year	—			1,091			1,132
Lapses in statutes of limitations/settlements	(4,494		)	(3,578		)	(4,198		)
Foreign currency translation adjustment	65			(83		)	1,053
Balance at December 31	$	17,548		$	19,742		$	21,438