XML 34 R17.htm IDEA: XBRL DOCUMENT
v3.10.0.1

INCOME TAXES | 12 Months Ended
--- | ---
Sep. 30, 2018
INCOME TAXES |
INCOME TAXES | NOTE 8 INCOME TAXES Impact of Tax Reform On December 22, 2017, the President of the United States signed into law the Tax Reform Act. Among a number of substantial changes to the current U.S. federal income tax rules, the Tax Reform Act decreases the marginal U.S. corporate income tax rate from 35 percent to 21 percent, provides for bonus depreciation that will allow for full expensing of qualified property in the year placed in service, limits the deductibility of certain expenditures, and significantly changes the U.S. taxation of certain foreign operations. By operation of law, we will apply a blended U.S. statutory federal income tax rate of 24.5 percent for fiscal year 2018. As a result of the Tax Reform Act, we were required to revalue deferred tax assets and liabilities from 35 percent to 21 percent. This revaluation has resulted in recognition of a tax benefit of approximately $502.1 million, which is included as a component of income tax expense in continuing operations on the Consolidated Statements of Operations. On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. In accordance with SAB 118, we recorded our best estimate of the impact of the Tax Reform Act in our fiscal year end income tax provision in accordance with our understanding of the Tax Reform Act and guidance available as of the date of this filing. Although we believe we have substantially completed our accounting for certain income tax effects of the Tax Reform Act, to the extent that the Internal Revenue Service or U.S. Treasury issues additional guidance during the SAB 118 measurement period, the Company will promptly evaluate whether any additional adjustments are required. Income Tax Provision and Rate The components of the provision (benefit) for income taxes are as follows:
|  | Year Ended September 30,
|  | 2018 |  | 2017 |  | 2016
|  | (in thousands)
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 757 |  | $ | (36,260) |  | $ | (86,010)
Foreign |  |  | 6,492 |  |  | 4,108 |  |  | 9,987
State |  |  | 2,340 |  |  | (472) |  |  | (3,742)
|  |  | 9,589 |  |  | (32,624) |  |  | (79,765)
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | (508,256) |  |  | (14,953) |  |  | 58,136
Foreign |  |  | 7,415 |  |  | (7,827) |  |  | 408
State |  |  | 14,083 |  |  | (1,331) |  |  | 1,544
|  |  | (486,758) |  |  | (24,111) |  |  | 60,088
Total benefit |  | $ | (477,169) |  | $ | (56,735) |  | $ | (19,677)
The amounts of domestic and foreign income (loss) before income taxes are as follows:
|  | Year Ended September 30,
|  | 2018 |  | 2017 |  | 2016
|  | (in thousands)
Domestic |  | $ | 27,436 |  | $ | (173,157) |  | $ | (49,636)
Foreign |  |  | (11,595) |  |  | (11,441) |  |  | (23,031)
|  | $ | 15,841 |  | $ | (184,598) |  | $ | (72,667)
Effective income tax rates as compared to the U.S. Federal income tax rate are as follows:
|  | Year Ended September 30, |
|  | 2018 |  | 2017 |  | 2016 |
U.S. Federal income tax rate |  | 24.5 | % | 35.0 | % | 35.0 | %
Effect of foreign taxes |  | 87.8 |  | 1.8 |  | (13.8) |
State income taxes, net of federal tax benefit |  | 68.8 |  | 0.6 |  | 3.2 |
U.S. domestic production activities |  | — |  | (2.1) |  | (10.4) |
Remeasurement of deferred tax related to Tax Reform Act |  | (3,169.4) |  | — |  | — |
Other impact of foreign operations |  | (43.4) |  | (2.9) |  | 14.7 |
Non-deductible meals and entertainment (1) |  | 8.2 |  | — |  | — |
Equity compensation (1) |  | (5.3) |  | — |  | — |
Officer's compensation (1) |  | 1.7 |  | — |  | — |
Contingent consideration adjustment (1) |  | 10.7 |  | — |  | — |
Other (1) |  | 4.1 |  | (1.7) |  | (1.6) |
Effective income tax rate |  | (3,012.3) | % | 30.7 | % | 27.1 | %
| (1) |  | For fiscal years 2017 and 2016, “other” reflects adjustments for non-deductible meals and entertainment, equity compensation, officer’s compensation and contingent consideration.
Effective tax rates differ from the U.S. federal statutory rate of 24.5 percent (blended for fiscal year 2018) due to state and foreign income taxes, change of the federal income tax rate from the Tax Reform Act, and the tax effect of non-deductible expenses (primarily related to certain meals and entertainment, officer’s compensation limited pursuant to Section 162(m) of the Code, and adjustments to the contingent consideration related to the MOTIVE Merger). Deferred Taxes Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of our assets and liabilities. Recoverability of any tax assets are evaluated and necessary valuation allowances are provided. The carrying value of the net deferred tax assets is based on management’s judgments using certain estimates and assumptions that we will be able to generate sufficient future taxable income in certain tax jurisdictions to realize the benefits of such assets. If these estimates and related assumptions change in the future, additional valuation allowances may be recorded against the deferred tax assets resulting in additional income tax expense in the future. The components of our net deferred tax liabilities are as follows:
|  | September 30,
|  | 2018 |  | 2017
|  | (in thousands)
Deferred tax liabilities: |  |  |  |  |  |
Property, plant and equipment |  | $ | 904,734 |  | $ | 1,386,512
Available-for-sale securities |  |  | 10,464 |  |  | 24,940
Other |  |  | 12,787 |  |  | 21,609
Total deferred tax liabilities |  |  | 927,985 |  |  | 1,433,061
Deferred tax assets: |  |  |  |  |  |
Pension reserves |  |  | 3,477 |  |  | 7,614
Self-insurance reserves |  |  | 13,100 |  |  | 19,461
Net operating loss, foreign tax credit, and other federal tax credit carryforwards |  |  | 55,889 |  |  | 62,478
Financial accruals |  |  | 45,708 |  |  | 62,971
Other |  |  | 4,888 |  |  | 6,003
Total deferred tax assets |  |  | 123,062 |  |  | 158,527
Valuation allowance |  |  | (48,213) |  |  | (58,155)
Net deferred tax assets |  |  | 74,849 |  |  | 100,372
Net deferred tax liabilities |  | $ | 853,136 |  | $ | 1,332,689
The change in our net deferred tax assets and liabilities is impacted by foreign currency remeasurement. As of September 30, 2018, we had federal, state and foreign tax net operating loss carryforwards of $50.8 million, $31.2 million and $83.7 million, respectively, and foreign tax credit carryforwards of approximately $24.9 million (of which $20.1 million is reflected as a deferred tax asset in our Consolidated Financial Statements prior to consideration of our valuation allowance) which will expire in fiscal years 2019 through 2038. The valuation allowance is primarily attributable to foreign and certain state net operating loss carryforwards of $22.8 million and $0.5 million, respectively, and foreign tax credit carryforwards of $20.1 million, equity compensation of $2.3 million, and foreign minimum tax credit carryforwards of $2.5 million which more likely than not will not be utilized. Unrecognized Tax Benefits We recognize accrued interest related to unrecognized tax benefits in interest expense, and penalties in other expense in the Consolidated Statements of Operations. As of September 30, 2018 and 2017, we had accrued interest and penalties of $2.2 million and $2.8 million, respectively. A reconciliation of the change in our gross unrecognized tax benefits for the fiscal years ended September 30, 2018 and 2017 is as follows:
|  | September 30,
|  | 2018 |  | 2017
|  | (in thousands)
Unrecognized tax benefits at October 1, |  | $ | 4,773 |  | $ | 9,551
Gross increases - tax positions in prior periods |  |  | 3 |  |  | —
Gross decreases - tax positions in prior periods |  |  | — |  |  | (1)
Gross decreases - current period effect of tax positions |  |  | (280) |  |  | (170)
Gross increases - current period effect of tax positions |  |  | 10,537 |  |  | 300
Expiration of statute of limitations for assessments |  |  | (128) |  |  | (4,907)
Unrecognized tax benefits at September 30, |  | $ | 14,905 |  | $ | 4,773
As of September 30, 2018 and 2017, our liability for unrecognized tax benefits includes $14.3 million and $3.7 million, respectively, of unrecognized tax benefits related to discontinued operations that, if recognized, would not affect the effective tax rate. The remaining unrecognized tax benefits would affect the effective tax rate if recognized. The liabilities for unrecognized tax benefits and related interest and penalties are included in other noncurrent liabilities in our Consolidated Balance Sheets. For the next 12 months, we cannot predict with certainty whether we will achieve ultimate resolution of any uncertain tax position associated with our U.S. and international land operations that could result in increases or decreases of our unrecognized tax benefits. However, we do not expect the increases or decreases to have a material effect on our results of operations or financial position. Tax Returns We file a consolidated U.S. federal income tax return, as well as income tax returns in various states and foreign jurisdictions. The tax years that remain open to examination by U.S. federal and state jurisdictions include fiscal years 2014 through 2017, with exception of certain state jurisdictions currently under audit. The tax years remaining open to examination by foreign jurisdictions include 2003 through 2017.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration