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Income Taxes Level 1 (Notes) | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | Income Taxes The provision or benefit for income taxes includes U.S. federal income taxes (determined on a consolidated return basis), foreign income taxes, and state income taxes. O n December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act ("the Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code by, among other things, reducing the federal corporate income tax rate, requiring payment of a one-time transition tax on unrepatriated earnings of foreign subsidiaries, generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries, creating a new limitation on deductible interest expense, creating a bonus depreciation that will allow for full expensing on qualified property, and imposing limitation on deductibility of certain executive compensation. The Tax Act reduced the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018. In accordance with SAB 118, we recognized a provisional $146.2 million net tax benefit related to deemed repatriated earnings and the remeasurement of deferred tax assets and liabilities in our consolidated financial statements for the year ended December 31, 2017. During 2018, we recognized a net $16.1 million discrete tax benefit for adjustments to the provisional tax amounts allowed under SAB 118. The accounting for the income tax effects of the Tax Act was finalized in the fourth quarter of 2018 based on the regulatory guidance, interpretations, and data available as of December 31, 2018. As of December 31, 2018, foreign withholding taxes have not been provided on the estimated $221.7 million of undistributed E&P of our foreign subsidiaries as we intend to permanently reinvest these foreign E&P in those businesses outside the U.S. However, if we were to repatriate such foreign E&P, the foreign withholding tax liability is estimated to be $11.5 million. Beginning in 2018, the Tax Act includes a new U.S. tax base erosion provision designed to tax global intangible low-taxed income (“GILTI”). We made a policy election to account for GILTI as a period cost. However, the tax impacts of GILTI provisions are not material to our consolidated financial statements. Income before income taxes was composed of the following components:
| Years Ended December 31,
| 2018 |  | 2017 |  | 2016
| (In thousands)
United States | $ | 399,123 |  |  | $ | 347,680 |  |  | $ | 287,946 |
Foreign | 42,609 |  |  | 52,578 |  |  | 38,712 |
| $ | 441,732 |  |  | $ | 400,258 |  |  | $ | 326,658 |
Income tax (benefit) provision consisted of the following:
| Years Ended December 31,
| 2018 |  | 2017 |  | 2016
| (In thousands)
Current: |  |  |  |  |  |  |  |
United States | $ | 18,138 |  |  | $ | 154,128 |  |  | $ | 113,629 |
Foreign | 10,541 |  |  | 12,187 |  |  | 12,084 |
State | 6,974 |  |  | 4,934 |  |  | 16,150 |
Total current income taxes | 35,653 |  |  | 171,249 |  |  | 141,863 |
Deferred: |  |  |  |  |  |  |  |
United States | $ | (48,565 | ) |  | $ | (314,389 | ) |  | $ | (19,496 | )
Foreign | 386 |  |  | 618 |  |  | 22,708 |
State | 6,700 |  |  | (4,067 | ) |  | 4,278 |
Total deferred income taxes | (41,479 | ) |  | (317,838 | ) |  | 7,490 |
Total income taxes | $ | (5,826 | ) |  | $ | (146,589 | ) |  | $ | 149,353 |
We made income tax payments of $65.4 million, $170.2 million, and $115.0 million in 2018, 2017, and 2016, respectively, and received refunds of $11.4 million, $3.4 million, and $2.4 million, respectively. The income tax payments for 2017 include$34.2 million in settlement payments to the IRS. The differences between the U.S. federal statutory income tax rate and our effective tax rate were as follows:
| Years Ended December 31,
| 2018 |  | 2017 |  | 2016
| (In thousands)
Computed tax provision at the applicable federal statutory income tax rate | $ | 92,764 |  |  | $ | 140,090 |  |  | $ | 114,331 |
State and local taxes, net of federal income tax benefits | 10,146 |  |  | 8,216 |  |  | 13,279 |
Foreign jurisdiction differences | 2,377 |  |  | (6,782 | ) |  | (2,557 | )
Permanent differences associated with divestitures | 790 |  |  | 1,925 |  |  | 9,267 |
Changes in uncertain tax positions and audit settlements | (88,687 | ) |  | (105,821 | ) |  | 5,669 |
Foreign valuation allowance, net of federal income tax benefits | (431 | ) |  | 1,186 |  |  | 15,850 |
Enactment of U.S. Tax Act | (16,105 | ) |  | (146,160 | ) |  | — |
Excess tax benefit from share-based compensation | (11,159 | ) |  | (18,521 | ) |  | — |
Other | 4,479 |  |  | (20,722 | ) |  | (6,486 | )
(Benefit from) provision for income taxes | $ | (5,826 | ) |  | $ | (146,589 | ) |  | $ | 149,353 |
Total consolidated effective tax rate | (1.3 | )% |  | (36.6 | )% |  | 45.7 | %
The effective tax rate for the twelve months ended December 31, 2018 was lower than the federal statutory tax rate of 21% primarily due to the reduction in uncertain tax positions as a result of the expiration of statutes of limitations. The lower effective tax rate for the twelve months ended December 31, 2017 was primarily due to the effects of the Tax Act discussed above and the IRS audit settlement, as well as the result of tax benefits recognized on the settlement of employee share-based awards. The higher effective tax rate for the twelve months ended December 31, 2016 was a result of a valuation allowance recorded against foreign net deferred tax assets for which a future net benefit may not be realized and non-deductible goodwill resulting from gains on divestitures. Deferred taxes are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates. The tax effects of temporary differences and carryforwards that give rise to significant portions of deferred tax assets and liabilities consisted of the following:
| Years Ended December 31,
| 2018 |  | 2017
| (In thousands)
Inventories and cemetery property | $ | (220,537 | ) |  | $ | (222,431 | )
Deferred incremental direct selling costs | (73,696 | ) |  | — |
Property and equipment | (122,281 | ) |  | (109,631 | )
Intangibles | (197,815 | ) |  | (194,159 | )
Other | — |  |  | (4,902 | )
Deferred tax liabilities | (614,329 | ) |  | (531,123 | )
Loss and tax credit carryforwards | 153,688 |  |  | 170,979 |
Deferred revenue on preneed funeral and cemetery contracts | 113,970 |  |  | 155,679 |
Accrued liabilities | 63,558 |  |  | 62,727 |
Other | 90 |  |  | — |
Deferred tax assets | 331,306 |  |  | 389,385 |
Less: valuation allowance | (120,931 | ) |  | (141,154 | )
Net deferred income tax liability | $ | (403,954 | ) |  | $ | (282,892 | )
Deferred tax assets and deferred income tax liabilities are recognized in our Consolidated Balance Sheet as follows:
| Years Ended December 31,
| 2018 |  | 2017
| (In thousands)
Non-current deferred tax assets | $ | 673 |  |  | $ | 873 |
Non-current deferred tax liabilities | (404,627 | ) |  | (283,765 | )
Net deferred income tax liability | $ | (403,954 | ) |  | $ | (282,892 | )
The following table summarizes the activity related to our gross unrecognized tax benefits from January 1, 2016 to December 31, 2018 (in thousands):
| Federal, State, and Foreign Tax
| (In thousands)
Balance at December 31, 2015 | $ | 182,545 |
Reductions to tax positions related to prior years | (4,219 | )
Balance at December 31, 2016 | $ | 178,326 |
Reductions to tax positions as a result of audit settlement | (30,333 | )
Reductions to tax positions related to prior years | (68,538 | )
Balance at December 31, 2017 | $ | 79,455 |
Additions to tax positions related to prior years | 1,348 |
Reduction to tax positions due to expiration of statutes of limitations | (79,455 | )
Balance at December 31, 2018 | $ | 1,348 |
Our total unrecognized tax benefits that, if recognized, would affect our effective tax rates were $1.4 million, $79.5 million, and $161.8 million as of December 31, 2018, 2017, and 2016, respectively. We include potential accrued interest and penalties related to unrecognized tax benefits within our income tax provision account. We have accrued $0.5 million, $11.1 million, and $57.3 million for the payment of interest, net of tax benefits, and penalties as of December 31, 2018, 2017, and 2016, respectively. We recorded a decrease of interest and penalties of $10.6 million, $46.2 million and an increase of $5.7 million for the years ended December 31, 2018, 2017, and 2016, respectively. To the extent interest and penalties are not assessed with respect to uncertain tax positions or the uncertainty of deductions in the future, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision. We file income tax returns, including tax returns for our subsidiaries, with federal, state, local, and foreign jurisdictions. We consider the United States to be our most significant jurisdiction; however, all tax returns are subject to routine compliance review by the taxing authorities in the jurisdictions in which we file tax returns in the ordinary course of business. In March 2017, we received from the IRS Office of Appeals the fully executed Form 870-AD for the years 1999-2005, which effectively settled the issues under audit for those years. As a result of this resolution, we recognized a reduction in our unrecognized tax benefits and associated interest of $143.0 million. In 2017, we made $34.2 million in settlement payments to the IRS and subsequently in 2018 received federal and state refunds totaling $5.6 million. The federal statutes of limitations have expired for all tax years prior to 2015 and we are not currently under audit by the IRS. Various state jurisdictions are auditing years 2009 through 2017. There are currently no federal or provincial audits in Canada; however, years subsequent to 2013 remain open and could be subject to examination. It is reasonably possible that the amount of unrecognized tax benefits may change within the next twelve months. However, given the number of years that remain subject to examination and the number of matters being examined, an estimate of the range of the possible increase or decrease cannot be made. Various subsidiaries have state and foreign loss carryforwards in the aggregate of $2.7 billion with expiration dates through 2032. Such loss carryforwards will expire as follows:
| Federal |  | State |  | Foreign |  | Total
| (In thousands)
2019 | $ | — |  |  | $ | 119,956 |  |  | $ | — |  |  | $ | 119,956 |
2020 | — |  |  | 174,507 |  |  | — |  |  | 174,507 |
2021 | — |  |  | 152,788 |  |  | — |  |  | 152,788 |
2022 | — |  |  | 80,831 |  |  | — |  |  | 80,831 |
Thereafter | 3,652 |  |  | 2,152,860 |  |  | 11,329 |  |  | 2,167,841 |
Total | $ | 3,652 |  |  | $ | 2,680,942 |  |  | $ | 11,329 |  |  | $ | 2,695,923 |
In assessing the usefulness of deferred tax assets, we consider whether it is more likely than not that some portion or all of the net deferred tax assets will not be realized. The ultimate realization of net deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. During 2018, we recorded a net $4.0 million decrease in our state valuation allowance due primarily to the implementation of the revenue recognition standard as well as statutory tax rate and legislative changes in various states. We also recorded a $16.2 million decrease in our foreign valuation allowance due primarily to dissolution of our Luxembourg subsidiary. The valuation allowances can be affected in future periods by changes to tax laws, changes to statutory tax rates, and changes in estimates of future taxable income. At December 31, 2018, our loss and tax credit carryforward deferred tax assets and related valuation allowances by jurisdiction are as follows (presented net of federal benefit):
| Federal |  | State |  | Foreign |  | Total
|  |  | (In thousands) |  |
Loss and tax credit carryforwards | $ | 767 |  |  | $ | 146,275 |  |  | $ | 6,646 |  |  | $ | 153,688 |
Valuation allowance | $ | — |  |  | $ | 100,625 |  |  | $ | 20,306 |  |  | $ | 120,931 |

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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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