

	Year Ended September 30,
(in thousands)	2019			2018			2017
Current:
Federal	$	21,745		$	757		$	(36,260	)
Foreign	732			6,492			4,108
State	3,365			2,340			(472		)
	25,842			9,589			(32,624		)
Deferred:
Federal	(35,809		)	(508,256		)	(14,953		)
Foreign	2,804			7,415			(7,827		)
State	(11,549		)	14,083			(1,331		)
	(44,554		)	(486,758		)	(24,111		)
Total benefit	$	(18,712	)	$	(477,169	)	$	(56,735	)



	Year Ended September 30,
(in thousands)	2019			2018			2017
Domestic	$	(45,118	)	$	27,436		$	(173,157	)
Foreign	(6,104		)	(11,595		)	(11,441		)
	$	(51,222	)	$	15,841		$	(184,598	)



	Year Ended September 30,
	2019		2018		2017
U.S. Federal income tax rate	21.0	%	24.5	%	35.0	%
Effect of foreign taxes	(0.6	)	87.8		1.8
State income taxes, net of federal tax benefit	17.2		68.8		0.6
U.S. domestic production activities	—		—		(2.1	)
Remeasurement of deferred tax related to Tax Reform Act	—		(3,169.4	)	—
Other impact of foreign operations	0.9		(43.4	)	(2.9	)
Non-deductible meals and entertainment ₍₁₎	(2.5	)	8.2		—
Equity compensation ₍₁₎	2.7		(5.3	)	—
Excess officer's compensation ₍₁₎	(1.9	)	1.7		—
Contingent consideration adjustment ₍₁₎	4.5		10.7		—
Other ₍₁₎	(4.8	)	4.1		(1.7	)
Effective income tax rate	36.5	%	(3,012.3	)%	30.7	%

Effective tax rates differ from the U.S. federal statutory rate of 21.0 percent due to state and foreign income taxes and the tax effect of non-deductible expenditures (primarily related to certain meals and entertainment, excess officer’s compensation limited pursuant to Section 162(m) of the IRC, and adjustments to the contingent consideration related to our acquisition of MOTIVE Drilling Technologies, Inc.

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.



	September 30,
(in thousands)	2019			2018
Deferred tax liabilities:
Property, plant and equipment	$	867,909		$	904,734
Marketable securities	—			10,464
Other	15,681			12,787
Total deferred tax liabilities	883,590			927,985
Deferred tax assets:
Marketable securities	771			—
Pension reserves	7,324			3,477
Self-insurance reserves	14,294			13,100
Net operating loss, foreign tax credit, and other federal tax credit carryforwards	41,126			55,889
Financial accruals	54,511			45,708
Other	2,531			4,888
Total deferred tax assets	120,557			123,062
Valuation allowance	(43,578		)	(48,213		)
Net deferred tax assets	76,979			74,849
Net deferred tax liabilities	$	806,611		$	853,136

As of September 30, 2019, we had federal, state and foreign tax net operating loss carryforwards of $8.9 million, $14.5 million and $62.0 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 2020 through 2039. The valuation allowance is primarily attributable to foreign and certain state net operating loss carryforwards of $16.9 million and $0.5 million, respectively, and foreign tax credit carryforwards of $20.1 million, equity compensation of $4.1 million, and foreign minimum tax credit carryforwards of $1.9 million which more likely than not will not be utilized.

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, 2019, and 2018, we had accrued interest and penalties of $2.1 million and $2.2 million, respectively.



(in thousands)	2019			2018
Unrecognized tax benefits at October 1,	$	14,905		$	4,773
Gross increases - tax positions in prior periods	—			3
Gross decreases - current period effect of tax positions	(28		)	(280		)
Gross increases - current period effect of tax positions	1,067			10,537
Expiration of statute of limitations for assessments	(185		)	(128		)
Unrecognized tax benefits at September 30,	$	15,759		$	14,905

As of September 30, 2019, and 2018, our liability for unrecognized tax benefits includes $15.3 million and $14.3 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.

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 2015 through 2018, with exception of certain state jurisdictions currently under audit. The tax years remaining open to examination by foreign jurisdictions include 2003 through 2019.