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INCOME TAXES | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income tax expense (benefit) consisted of the following (in thousands of dollars):
| For the Years Ended December 31,
| 2016 |  | 2015 |  | 2014
Current provision: |  |  |  |  |
Federal | $ | 310,582 |  |  | $ | 412,545 |  |  | $ | 437,648 |
State | 38,249 |  |  | 49,894 |  |  | 47,199 |
Foreign | 25,076 |  |  | 24,087 |  |  | 43,088 |
Total current | 373,907 |  |  | 486,526 |  |  | 527,935 |
Deferred tax (benefit) provision | 12,313 |  |  | (20,995 | ) |  | (5,845 | )
Total provision | $ | 386,220 |  |  | $ | 465,531 |  |  | $ | 522,090 |
Earnings (losses) before income taxes by geographical area consisted of the following (in thousands of dollars):
| For the Years Ended December 31,
| 2016 |  | 2015 |  | 2014
United States | $ | 1,073,879 |  |  | $ | 1,203,880 |  |  | $ | 1,299,523 |
Foreign | (54,821 | ) |  | 46,825 |  |  | 34,863 |
| $ | 1,019,058 |  |  | $ | 1,250,705 |  |  | $ | 1,334,386 |
The income tax effects of temporary differences that gave rise to the net deferred tax asset (liability) were (in thousands of dollars):
| As of December 31,
| 2016 |  | 2015
Deferred tax assets: |  |  |
Inventory | $ | 30,030 |  |  | $ | 32,390 |
Accrued expenses | 70,021 |  |  | 56,127 |
Accrued employment-related benefits | 124,556 |  |  | 116,423 |
Foreign operating loss carryforwards | 67,350 |  |  | 70,881 |
Other | 22,256 |  |  | 12,962 |
Deferred tax assets | 314,213 |  |  | 288,783 |
Less valuation allowance | (72,705 | ) |  | (62,333 | )
Deferred tax assets, net of valuation allowance | $ | 241,508 |  |  | $ | 226,450 |
Deferred tax liabilities: |  |  |
Property, buildings and equipment | (75,690 | ) |  | (42,249 | )
Intangibles | (127,292 | ) |  | (134,784 | )
Software | (25,431 | ) |  | (20,744 | )
Prepaids | (11,959 | ) |  | (17,901 | )
Other | (1,067 | ) |  | (17,277 | )
Deferred tax liabilities | (241,439 | ) |  | (232,955 | )
Net deferred tax asset (liability) | $ | 69 |  |  | $ | (6,505 | )
The net deferred tax asset (liability) is classified as follows: |  |  |
Noncurrent assets | $ | 64,775 |  |  | $ | 83,996 |
Noncurrent liabilities (foreign) | (64,706 | ) |  | (90,501 | )
Net deferred tax asset (liability) | $ | 69 |  |  | $ | (6,505 | )
At December 31, 2016, the Company had $256 million of net operating loss (NOLs) carryforwards related primarily to foreign operations. Some of the operating loss carryforwards may expire at various dates through 2036. The Company has recorded a valuation allowance, which represents a provision for uncertainty as to the realization of the tax benefits of these carryforwards and deferred tax assets that may not be realized. The Company's valuation allowance changed as follows (in thousands of dollars):
| For the Years Ended December 31,
| 2016 |  | 2015
Balance at beginning of period | $ | 62,333 |  |  | $ | 56,876 |
Valuation allowance increases primarily related to foreign NOLs | 12,174 |  |  | 7,045 |
Valuation allowance releases related to foreign NOLs | (3,870 | ) |  | (437 | )
Other valuation allowance changes, net | 2,068 |  |  | (1,151 | )
Balance at end of period | $ | 72,705 |  |  | $ | 62,333 |
A reconciliation of income tax expense with federal income taxes at the statutory rate follows (in thousands of dollars):
| For the Years Ended December 31,
| 2016 |  | 2015 |  | 2014
Federal income tax at the 35% statutory rate | $ | 356,670 |  |  | $ | 437,746 |  |  | $ | 467,035 |
State income taxes, net of federal income tax benefit | 25,993 |  |  | 29,507 |  |  | 31,263 |
Clean energy credit | (28,670 | ) |  | (13,358 | ) |  | — |
Foreign rate difference | 21,077 |  |  | 12,041 |  |  | 20,318 |
Other - net | 11,150 |  |  | (405 | ) |  | 3,474 |
Income tax expense | $ | 386,220 |  |  | $ | 465,531 |  |  | $ | 522,090 |
Effective tax rate | 37.9 | % |  | 37.2 | % |  | 39.1 | %
In the second quarter of 2015, the Company acquired a non-controlling interest in a limited liability company established to produce refined coal. Additionally, in the first quarter of 2016 the Company acquired a non-controlling interest in a second limited liabilty company established to produce refined coal. The production and sale of refined coal that results in required emission reductions is eligible for renewable energy tax credits under Section 45 of the Internal Revenue Code. The Company receives tax credits in proportion to its equity interest. The income tax credits from the investment resulted in a 2.8 and a 1.0 percentage point reduction to the overall effective tax rate for 2016 and 2015, respectively. Undistributed earnings of foreign subsidiaries at December 31, 2016, amounted to $629 million. No provision for deferred U.S. income taxes has been made for these subsidiaries because the Company intends to permanently reinvest such earnings in its foreign operations. If at some future date these earnings cease to be permanently invested, the Company may be subject to U.S. income taxes, foreign withholding and other taxes on such amounts, which cannot be reasonably estimated at this time. The balance and changes in the liability for tax uncertainties, excluding interest, are as follows (in thousands of dollars):
| For the Years Ended December 31,
| 2016 |  | 2015 |  | 2014
Balance at beginning of year | $ | 60,576 |  |  | $ | 45,126 |  |  | $ | 40,317 |
Additions for tax positions related to the current year | 14,119 |  |  | 14,916 |  |  | 11,545 |
Additions for tax positions of prior years | 13,215 |  |  | 2,653 |  |  | 5,318 |
Reductions for tax positions of prior years | (14,774 | ) |  | (1,616 | ) |  | (4,109 | )
Reductions due to statute lapse | (1,527 | ) |  | (402 | ) |  | (1,271 | )
Settlements, audit payments, refunds - net | (12,928 | ) |  | (101 | ) |  | (6,674 | )
Balance at end of year | $ | 58,681 |  |  | $ | 60,576 |  |  | $ | 45,126 |
The Company classifies the liability for tax uncertainties in deferred income taxes and tax uncertainties. Included in this amount are $22 million and $17 million at December 31, 2016 and 2015, respectively, of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Any changes in the timing of deductibility of these items would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authorities to an earlier period. The changes to tax positions of prior years in 2016 related generally to the impact of conclusion of audits and audit settlements. The Company regularly undergoes examination of its federal income tax returns by the Internal Revenue Service (IRS). In 2016, the Company settled the 2009 and 2010 federal audits with the IRS Appeals Office. The Company's federal tax returns for 2011 and 2012 are currently under audit by the IRS, and the tax years 2013 through 2016 are open. The Company is also subject to audit by state, local and foreign taxing authorities. Tax years 2002 - 2016 remain subject to state and local audits and 2006 - 2016 remain subject to foreign audits. The amount of liability associated with the Company's uncertain tax positions may change within the next 12 months due to the pending audit activity, expiring statutes or tax payments. A reasonable estimate of such change cannot be made. The Company recognizes interest expense related to tax uncertainties in the provision for income taxes. During 2016, 2015 and 2014, the Company recognized tax uncertainties' interest expense of $1 million, $1 million and $2 million, respectively. As of December 31, 2016, 2015 and 2014, the Company accrued approximately $4 million, $5 million and $4 million for tax uncertainties' interest, respectively.

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- 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 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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