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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Components of Income Tax Expense Benefit | Income before income taxes and equity in net income of unconsolidated investments, and current and deferred income tax expense (benefit) are composed of the following (in thousands):
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
Income before income taxes and equity in net income of unconsolidated investments: |  |  |  |  |
Domestic | $ | (186,077) |  |  | $ | 41,346 |  |  | $ | 190,195 |
Foreign | 319,695 |  |  | 332,173 |  |  | 372,755 |
Total | $ | 133,618 |  |  | $ | 373,519 |  |  | $ | 562,950 |
Current income tax expense (benefit): |  |  |  |  |
Federal | $ | 11,722 |  |  | $ | (140) |  |  | $ | 21,258 |
State | 694 |  |  | (193) |  |  | 5,453 |
Foreign | 55,530 |  |  | 56,734 |  |  | 47,056 |
Total | $ | 67,946 |  |  | $ | 56,401 |  |  | $ | 73,767 |
Deferred income tax (benefit) expense: |  |  |  |  |
Federal | $ | (38,413) |  |  | $ | 4,564 |  |  | $ | 13,255 |
State | (5,544) |  |  | (2,893) |  |  | (7,369) |
Foreign | 5,457 |  |  | (3,647) |  |  | 8,508 |
Total | $ | (38,500) |  |  | $ | (1,976) |  |  | $ | 14,394 |
Total income tax expense | $ | 29,446 |  |  | $ | 54,425 |  |  | $ | 88,161 |
Significant Differences Between United States Federal Statutory Rate and Effective Income Tax Rate | The reconciliation of the U.S. federal statutory rate to the effective income tax rate is as follows:
| % of Income Before Income Taxes
| 2021 |  | 2020 |  | 2019
Federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State taxes, net of federal tax benefit | (3.5) |  |  | 0.3 |  |  | (0.5) |
Change in valuation allowance (a) | 33.7 |  |  | 1.9 |  |  | 1.9 |
Impact of foreign earnings, net(b)(c) | (40.5) |  |  | (8.4) |  |  | (3.7) |
Global intangible low tax inclusion | 12.3 |  |  | 1.9 |  |  | 1.8 |
Section 162(m) limitation | 4.5 |  |  | 0.5 |  |  | 0.3 |
Subpart F income | 4.8 |  |  | 1.3 |  |  | 0.6 |
Stock-based compensation | (7.2) |  |  | (1.0) |  |  | (0.6) |
Depletion | (2.9) |  |  | (0.9) |  |  | (0.7) |
U.S. federal return to provision | (1.7) |  |  | (0.9) |  |  | (0.4) |
Revaluation of unrecognized tax benefits/reserve requirements | 3.0 |  |  | (0.4) |  |  | (2.7) |
Other items, net | (1.5) |  |  | (0.7) |  |  | (1.3) |
Effective income tax rate | 22.0 | % |  | 14.6 | % |  | 15.7 | %
(a)The years ended December 31, 2021 and 2019 includes benefits of $6.0 million and $2.1 million, respectively, due to the release of a foreign valuation allowance due to changes in expected profitability. (b)Includes a discrete tax benefit of $27.9 million related to the revision of an indemnification estimate for an ongoing tax-related matter in Germany. (c)Our statutory rate is decreased by of our share of the income of JBC, a Free Zones company under the laws of the Hashemite Kingdom of Jordan. The applicable provisions of the Jordanian law, and applicable regulations thereunder, do not have a termination provision and the exemption is indefinite. As a Free Zones company, JBC is not subject to income taxes on the profits of products exported from Jordan, and currently, substantially all of the profits are from exports. This resulted in a rate benefit of 34.6%, 11.9%, and 8.0% for 2021, 2020, and 2019, respectively.
Deferred Income Tax Assets and Liabilities Recorded on Consolidated Balance Sheets | Deferred income tax assets and liabilities recorded on the consolidated balance sheets as of December 31, 2021 and 2020 consist of the following (in thousands):
| December 31,
| 2021 |  | 2020
Deferred tax assets: |  |  |
Accrued employee benefits | $ | 18,374 |  |  | $ | 21,878 |
Operating loss carryovers | 1,295,925 |  |  | 1,321,942 |
Pensions | 48,720 |  |  | 78,683 |
Tax credit carryovers | 2,448 |  |  | 1,582 |
Other(a) | 212,882 |  |  | 57,370 |
Gross deferred tax assets | 1,578,349 |  |  | 1,481,455 |
Valuation allowance | (1,276,305) |  |  | (1,326,204) |
Deferred tax assets | 302,044 |  |  | 155,251 |
Deferred tax liabilities: |  |  |
Depreciation | (411,336) |  |  | (348,700) |
Intangibles | (83,182) |  |  | (91,645) |
Hedge of net investment of foreign subsidiary | — |  |  | (13,514) |
Other(b) | (142,008) |  |  | (75,927) |
Deferred tax liabilities | (636,526) |  |  | (529,786) |
Net deferred tax liabilities | $ | (334,482) |  |  | $ | (374,535) |
Classification in the consolidated balance sheets: |  |  |
Noncurrent deferred tax assets | $ | 18,797 |  |  | $ | 20,317 |
Noncurrent deferred tax liabilities | (353,279) |  |  | (394,852) |
Net deferred tax liabilities | $ | (334,482) |  |  | $ | (374,535) |
(a) Increase in other primarily related to deferred tax assets for the settlement of an arbitration ruling for a legacy Rockwood legal matter and the expense related to anticipated cost overruns for MRL’s 40% interest in lithium hydroxide conversion assets being built in Kemerton.(b) Increase in other primarily related to deferred tax liabilities recorded for the gain on the sale of the FCS business.
Changes in Balance of Deferred Tax Asset Valuation Allowance | Changes in the balance of our deferred tax asset valuation allowance are as follows (in thousands):
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
Balance at January 1 | $ | (1,326,204) |  |  | $ | (1,148,268) |  |  | $ | (1,213,750) |
Additions | (61,470) |  |  | (182,325) |  |  | (24,986) |
Deductions | 111,369 |  |  | 4,389 |  |  | 90,468 |
Balance at December 31 | $ | (1,276,305) |  |  | $ | (1,326,204) |  |  | $ | (1,148,268) |
Reconciliation of Total Gross Liability Related to Uncertain Tax Positions | The following is a reconciliation of our total gross liability related to uncertain tax positions for 2021, 2020 and 2019 (in thousands):
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
Balance at January 1 | $ | 11,639 |  |  | $ | 17,548 |  |  | $ | 19,742 |
Additions for tax positions related to prior years | 75 |  |  | 5,646 |  |  | 2,235 |
Reductions for tax positions related to prior years | (6) |  |  | (174) |  |  | — |
Additions for tax positions related to current year | 10,911 |  |  | 315 |  |  | — |
Lapses in statutes of limitations/settlements | (1,931) |  |  | (12,128) |  |  | (4,494) |
Foreign currency translation adjustment | 29 |  |  | 432 |  |  | 65 |
Balance at December 31 | $ | 20,717 |  |  | $ | 11,639 |  |  | $ | 17,548 |

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