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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES On December 22, 2017, the United States enacted the 2017 Tax Act. The 2017 Tax Act, which is also commonly referred to as “U.S. tax reform”, significantly changes U.S. corporate income tax laws by, among other things, reducing the U.S. corporate income tax rate from 35% to 21% starting in 2018 and creates a territorial tax system with a one-time mandatory tax on the undistributed foreign earnings of the Company's non-U.S. subsidiaries. As a result, the Company recorded a net income tax benefit of $13.9 million during the fourth quarter of 2017. This amount, which reduced income tax expense, consisted of three components: i.$116.2 million of deferred income tax benefit resulting from the remeasurement of net deferred tax liabilities based on the new lower U.S. income tax rate, ii.$70.2 million provisional estimate of deferred income tax expense for the reversal of net deferred tax asset provided for foreign income tax credits in excess of unremitted foreign earnings (after adjustment of the unremitted foreign earnings liability to reflect the lower U.S. tax rate) to transition to the territorial tax system, and iii.$32.1 million of current income tax expense relating to the provisional estimate of the one-time mandatory tax (Transition Tax) on undistributed earnings of the Company's non-U.S. subsidiaries. In addition, as a result of the transition to a territorial tax system in the U.S., the effective tax rate for the year ended December 31, 2017 included a $25.4 million income tax benefit, as foreign tax rates were lower than the 2017 U.S. corporate income tax rate of 35%. Given the significance of the legislation, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118 (SAB 118), which allowed registrants to record provisional amounts of income tax during a one-year “measurement period.” Provisional amounts included any changes as a result of further guidance and interpretations issued in the future and also included any indirect impacts required to be recorded, including for example amounts recorded for state income taxes. December 2018 marked the end of the provisional measurement period for purposes of SAB 118. As such, the Company has completed the analysis based on current legislative updates relating to the 2017 Tax Act, which resulted in an increase of $1 million to the Transition Tax obligation initially recorded in 2017. In 2018 the Company reclassified its provisional liability from a long-term liability to a current obligation, offsetting its prepaid income tax balance, as a result of guidance issued by the IRS. The Company also decreased its provisional foreign tax credits on repatriated earnings initially recorded at December 31, 2017, by $3.6 million during 2018 based on additional guidance and clarifications issued. The 2017 Tax Act included provisions for Global Intangible Low-Taxed Income (GILTI) under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries and for Base Erosion and Anti-Abuse Tax (BEAT) under which taxes are imposed on certain base eroding payments to affiliated foreign companies. The Company treats BEAT and GILTI as discrete adjustments to the income tax provision when incurred. Income tax expense (benefit) includes the following components:
|  | Federal |  | State |  | Foreign |  | Total
2018 |  |  |  |  |  |  |  |
Current |  | $ | 45,996 |  |  | 13,262 |  |  | 151,312 |  |  | 210,570 |
Deferred |  | (9,759 | ) |  | (2,272 | ) |  | — |  |  | (12,031 | )
|  | $ | 36,237 |  |  | 10,990 |  |  | 151,312 |  |  | 198,539 |
2017 |  |  |  |  |  |  |  |
Current |  | $ | 101,821 |  |  | 20,490 |  |  | 149,596 |  |  | 271,907 |
Deferred |  | (42,474 | ) |  | (1,221 | ) |  | — |  |  | (43,695 | )
|  | $ | 59,347 |  |  | 19,269 |  |  | 149,596 |  |  | 228,212 |
2016 |  |  |  |  |  |  |  |
Current |  | $ | 85,330 |  |  | 16,082 |  |  | 137,076 |  |  | 238,488 |
Deferred |  | 16,903 |  |  | (1,068 | ) |  | — |  |  | 15,835 |
|  | $ | 102,233 |  |  | 15,014 |  |  | 137,076 |  |  | 254,323 |
Income tax expense differs from amounts computed by applying the United States Federal income tax rate of 21% in 2018 and 35% in 2017 and 2016 when compared to earnings before income taxes as a result of the following:
|  | 2018 |  | 2017 |  | 2016
Computed “expected” tax expense |  | $ | 171,849 |  |  | 251,508 |  |  | 240,400 |
Increase (decrease) in income taxes resulting from: |  |  |  |  |  |
Effect of foreign taxes |  | 19,008 |  |  | (25,374 | ) |  | — |
State income taxes, net of Federal income tax benefit |  | 8,682 |  |  | 12,525 |  |  | 9,759 |
Nondeductible executive compensation |  | 3,126 |  |  | — |  |  | — |
Stock compensation expense, net |  | (3,860 | ) |  | 63 |  |  | 3,629 |
Enactment of 2017 Tax Act |  | — |  |  | (13,894 | ) |  | — |
Other, net |  | (266 | ) |  | 3,384 |  |  | 535 |
|  | $ | 198,539 |  |  | 228,212 |  |  | 254,323 |
In addition to the lower US federal tax rate that resulted from the 2017 Tax Act, the Company's effective tax rate in 2018 benefited from significant share-based compensation deductions, US Federal tax credits totaling $20.3 million, principally as a result of withholding taxes related to the Company's foreign operations, and US income tax deductions for Foreign-derived intangible income (FDII) of $4.8 million. These amounts were partially offset by the effect of higher foreign tax rates of the Company's international subsidiaries, when compared to the US Federal income tax rate of 21%, as well as certain expenses that are no longer deductible under the 2017 Tax Act, including certain executive compensation in excess of amounts allowed. The components of earnings before income taxes are as follows:
|  | 2018 |  | 2017 |  | 2016
United States |  | $ | 313,178 |  |  | 276,714 |  |  | 243,754 |
Foreign |  | 505,151 |  |  | 441,881 |  |  | 443,102 |
|  | $ | 818,329 |  |  | 718,595 |  |  | 686,856 |
The tax effects of temporary differences and tax credits that give rise to significant portions of deferred tax assets and deferred tax liabilities are as follows:
Years ended December 31, |  | 2018 |  | 2017
Deferred Tax Assets: |  |  |  |
Accrued third party obligations, deductible for taxes upon economic performance |  | $ | 7,726 |  |  | 8,075 |
Provision for doubtful accounts receivable |  | 1,443 |  |  | 628 |
Excess of financial statement over tax depreciation |  | 5,134 |  |  | 4,804 |
Deductible stock compensation expense, net |  | 19,011 |  |  | 17,326 |
Foreign currency translation adjustments |  | 37,299 |  |  | 24,448 |
Retained liability for cargo claims |  | 1,025 |  |  | 1,062 |
Total gross deferred tax assets |  | 71,638 |  |  | 56,343 |
Deferred Tax Liabilities: |  |  |  |
Unremitted foreign earnings, net of related foreign tax credits |  | 31,173 |  |  | 43,136 |
Total gross deferred tax liabilities |  | 31,173 |  |  | 43,136 |
Net deferred tax assets |  | $ | 40,465 |  |  | 13,207 |
Based on management’s review of the Company’s tax positions, the Company had no significant unrecognized tax benefits as of December 31, 2018 and 2017. The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state, local and foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for years prior to 2015. With respect to state and local jurisdictions and countries outside of the United States, with limited exceptions, the Company and its subsidiaries are no longer subject to income tax audits for years prior to 2001. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. The outcome of a tax audit is always uncertain. Although the Company records estimates for additional tax expense, as well as interest and penalties that could arise from certain tax audits, the final resolution of these audits could differ materially from the estimates recorded by the Company. Any interest and penalties expensed in relation to the underpayment of income taxes were insignificant for the years ended December 31, 2018, 2017 and 2016.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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