XML 64 R30.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2018
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES U.S. Tax Reform — In 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “TCJA”). The TCJA significantly changed U.S. corporate income tax law. Among other changes effective in 2017, the TCJA required companies to pay a one-time tax on certain unrepatriated earnings of foreign subsidiaries. Many other changes took effect in 2018, including a limit on the deductibility of interest expense and a new regime for taxing certain earnings of foreign subsidiaries. The Company recognized the income tax effects of the TCJA in accordance with Staff Accounting Bulletin No. 118 (“SAB 118”) which provides SEC guidance on the application of ASC 740, Income Taxes, in the reporting period in which the TCJA was signed into law. Accordingly, the Company’s 2017 financial statements reflected provisional amounts for those impacts for which the accounting under ASC 740 was incomplete, but a reasonable estimate could be determined. As of December 31, 2018, the Company's accounting for the initial impacts of the TCJA are complete under SAB 118. For the year ended December 31, 2018 the Company increased its estimate of the one-time transition tax by $194 million to $869 million. The estimated tax expense recognized for the year ended December 31, 2017 relating to the remeasurement of deferred tax assets and liabilities from an income tax rate of 35% to 21%, decreased $77 million, resulting in a total remeasurement benefit of $38 million. Argentine Tax Reform — In December 2017, the Argentine government enacted reforms to its income tax laws that resulted in a decrease to statutory income tax rates for our Argentine businesses from 35% to 30% in 2018-2019 and to 25% for 2020 and future years. The impact of remeasuring deferred taxes to account for the enacted change in future applicable income tax rates was recognized as income tax benefit in the fourth quarter of 2017, resulting in a decrease of $21 million to consolidated income tax expense. Chilean Tax Reform — In February 2016, the Chilean government enacted further reforms to its income tax laws that resulted in an increase to statutory income tax rates for most of our Chilean businesses from 25% to 25.5% in 2017 and to 27% for 2018 and future years. The impact of remeasuring deferred taxes to account for the enacted change in future applicable income tax rates was recognized as a discrete income tax expense in the first quarter of 2016, resulting in an increase of $26 million to consolidated income tax expense. Income Tax Provision — The following table summarizes the expense for income taxes on continuing operations for the periods indicated (in millions):
December 31, |  | 2018 |  | 2017 |  | 2016
Federal: | Current | $ | 7 |  |  | $ | — |  |  | $ | 2 |
| Deferred | 186 |  |  | 545 |  |  | (361 | )
State: | Current | 2 |  |  | — |  |  | 1 |
| Deferred | 5 |  |  | 1 |  |  | (4 | )
Foreign: | Current | 378 |  |  | 335 |  |  | 318 |
| Deferred | 130 |  |  | 109 |  |  | 76 |
Total |  | $ | 708 |  |  | $ | 990 |  |  | $ | 32 |
Effective and Statutory Rate Reconciliation — The following table summarizes a reconciliation of the U.S. statutory federal income tax rate to the Company's effective tax rate as a percentage of income from continuing operations before taxes for the periods indicated:
December 31, |  | 2018 |  | 2017 |  | 2016
Statutory Federal tax rate |  | 21 | % |  | 35 | % |  | 35 | %
State taxes, net of Federal tax benefit |  | 2 | % |  | (7 | )% |  | (18 | )%
Taxes on foreign earnings |  | 9 | % |  | — | % |  | (46 | )%
Valuation allowance |  | (2 | )% |  | 10 | % |  | 10 | %
Uncertain tax positions |  | — | % |  | — | % |  | 4 | %
Noncontrolling Interest on Buffalo Gap impairments |  | — | % |  | — | % |  | 31 | %
Change in tax law |  | 6 | % |  | 90 | % |  | 12 | %
Other—net |  | (1 | )% |  | — | % |  | (11 | )%
Effective tax rate |  | 35 | % |  | 128 | % |  | 17 | %
For 2018, the 6% change in tax law item relates primarily to changes in estimate under SAB 118 of the impacts of adoption of the TCJA. The Company recognized tax expense of $194 million related to revised estimates of the one-time transition tax in accordance with proposed regulations issued by the U.S. Treasury in 2018. The adjustment was due in large part to the approach the proposed regulations adopted to determine the fair value of our interests in publicly traded subsidiaries. The Company also recognized tax benefit of $77 million related to revised estimates of deferred tax remeasurement. Included in the 9% taxes on foreign earnings item is $124 million of U.S. GILTI tax expense related to foreign subsidiaries, including the sale of our interest in Masinloc. For 2017, the 90% change in tax law item relates primarily to the impact of U.S. and Argentina tax reform. The impact of the U.S one-time transition tax and remeasurement of deferred taxes represents 88% and 5%, respectively, which is partially offset by the tax benefit resulting from Argentina tax reform representing 3%. For 2016, the 31% Buffalo Gap impairments item relates to the amounts of impairment allocated to noncontrolling interest which is nondeductible. Income Tax Receivables and Payables — The current income taxes receivable and payable are included in Other Current Assets and Accrued and Other Liabilities, respectively, on the accompanying Consolidated Balance Sheets. The noncurrent income taxes receivable and payable are included in Other Noncurrent Assets and Other Noncurrent Liabilities, respectively, on the accompanying Consolidated Balance Sheets. The following table summarizes the income taxes receivable and payable as of the periods indicated (in millions):
December 31, |  | 2018 |  | 2017
Income taxes receivable—current |  | $ | 163 |  |  | $ | 147 |
Income taxes receivable—noncurrent |  | 8 |  |  | — |
Total income taxes receivable |  | $ | 171 |  |  | $ | 147 |
Income taxes payable—current |  | $ | 210 |  |  | $ | 129 |
Income taxes payable—noncurrent |  | 7 |  |  | 17 |
Total income taxes payable |  | $ | 217 |  |  | $ | 146 |
Deferred Income Taxes — Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and (b) operating loss and tax credit carryforwards. These items are stated at the enacted tax rates that are expected to be in effect when taxes are actually paid or recovered. As of December 31, 2018, the Company had federal net operating loss carryforwards for tax return purposes of approximately $1.1 billion expiring in years 2033 to 2036. The Company also had federal general business tax credit carryforwards of approximately $22 million expiring primarily from 2021 to 2038, and federal alternative minimum tax credits of approximately $15 million that may be fully recovered by 2021 under the TCJA. Additionally, the Company had state net operating loss carryforwards as of December 31, 2018 of approximately $8.5 billion expiring in years 2019 to 2038. As of December 31, 2018, the Company had foreign net operating loss carryforwards of approximately $2.4 billion that expire at various times beginning in 2019 and some of which carry forward without expiration, and tax credits available in foreign jurisdictions of approximately $14 million, $13 million of which expire in 2021 and $1 million of which expire in years 2024 to 2029. Valuation allowances decreased $120 million during 2018 to $868 million at December 31, 2018. This net decrease was primarily the result of valuation allowance activity at certain of our Brazil subsidiaries and U.S. states. Valuation allowances increased $112 million during 2017 to $988 million at December 31, 2017. This net increase was primarily the result of valuation allowance activity at certain of our Brazil subsidiaries. The Company believes that it is more likely than not that the net deferred tax assets as shown below will be realized when future taxable income is generated through the reversal of existing taxable temporary differences and income that is expected to be generated by businesses that have long-term contracts or a history of generating taxable income. The following table summarizes deferred tax assets and liabilities, as of the periods indicated (in millions):
December 31, |  | 2018 |  | 2017
Differences between book and tax basis of property |  | $ | (1,418 | ) |  | $ | (1,424 | )
Other taxable temporary differences |  | (243 | ) |  | (143 | )
Total deferred tax liability |  | (1,661 | ) |  | (1,567 | )
Operating loss carryforwards |  | 1,066 |  |  | 1,439 |
Capital loss carryforwards |  | 52 |  |  | 63 |
Bad debt and other book provisions |  | 62 |  |  | 66 |
Tax credit carryforwards |  | 55 |  |  | 51 |
Other deductible temporary differences |  | 111 |  |  | 60 |
Total gross deferred tax asset |  | 1,346 |  |  | 1,679 |
Less: valuation allowance |  | (868 | ) |  | (988 | )
Total net deferred tax asset |  | 478 |  |  | 691 |
Net deferred tax (liability) |  | $ | (1,183 | ) |  | $ | (876 | )
The Company considers undistributed earnings of certain foreign subsidiaries to be indefinitely reinvested outside of the U.S. Except for the one-time transition tax in the U.S., no taxes have been recorded with respect to our indefinitely reinvested earnings in accordance with the relevant accounting guidance for income taxes. Should the earnings be remitted as dividends, the Company may be subject to additional foreign withholding and state income taxes. Under the TCJA, future distributions from foreign subsidiaries will generally be subject to a federal dividends received deduction in the U.S. As of December 31, 2018, the cumulative amount of U.S. GAAP foreign un-remitted earnings upon which additional income taxes have not been provided is approximately $4 billion. It is not practicable to estimate the amount of any additional taxes which may be payable on the undistributed earnings. Income from operations in certain countries is subject to reduced tax rates as a result of satisfying specific commitments regarding employment and capital investment. The Company's income tax benefits related to the tax status of these operations are estimated to be $35 million, $26 million and $20 million for the years ended December 31, 2018, 2017 and 2016, respectively. The per share effect of these benefits after noncontrolling interests was $0.04, $0.03 and $0.02 for the years ended December 31, 2018, 2017 and 2016, respectively. Included in the Company's income tax benefits is the benefit related to our operations in Vietnam, which is estimated to be $19 million, $13 million and $15 million for the years ended December 31, 2018, 2017 and 2016, respectively. The per share effect of these benefits related to our operations in Vietnam after noncontrolling interest was $0.01, $0.01 and $0.01 for the years ended December 31, 2018, 2017 and 2016, respectively. The following table shows the income (loss) from continuing operations, before income taxes, net equity in earnings of affiliates and noncontrolling interests, for the periods indicated (in millions):
December 31, |  | 2018 |  | 2017 |  | 2016
U.S. |  | $ | (218 | ) |  | $ | (511 | ) |  | $ | (1,305 | )
Non-U.S. |  | 2,236 |  |  | 1,282 |  |  | 1,492 |
Total |  | $ | 2,018 |  |  | $ | 771 |  |  | $ | 187 |
Uncertain Tax Positions — Uncertain tax positions have been classified as noncurrent income tax liabilities unless they are expected to be paid within one year. The Company's policy for interest and penalties related to income tax exposures is to recognize interest and penalties as a component of the provision for income taxes in the Consolidated Statements of Operations. The following table shows the total amount of gross accrued income taxes related to interest and penalties included in the Consolidated Balance Sheets for the periods indicated (in millions):
December 31, |  | 2018 |  | 2017
Interest related |  | $ | 4 |  |  | $ | 7 |
Penalties related |  | — |  |  | — |
The following table shows the expense/(benefit) related to interest and penalties on unrecognized tax benefits for the periods indicated (in millions):
December 31, |  | 2018 |  | 2017 |  | 2016
Total expense (benefit) for interest related to unrecognized tax benefits |  | $ | (3 | ) |  | $ | 1 |  |  | $ | 2 |
Total expense for penalties related to unrecognized tax benefits |  | — |  |  | — |  |  | — |
We are potentially subject to income tax audits in numerous jurisdictions in the U.S. and internationally until the applicable statute of limitations expires. Tax audits by their nature are often complex and can require several years to complete. The following is a summary of tax years potentially subject to examination in the significant tax and business jurisdictions in which we operate:
Jurisdiction |  | Tax Years Subject to Examination
Argentina |  | 2012-2018
Brazil |  | 2013-2018
Chile |  | 2015-2018
Colombia |  | 2016-2018
Dominican Republic |  | 2016-2018
El Salvador |  | 2016-2018
Netherlands |  | 2014-2018
Panama |  | 2015-2018
United Kingdom |  | 2012-2018
United States (Federal) |  | 2015-2018
As of December 31, 2018, 2017 and 2016, the total amount of unrecognized tax benefits was $463 million, $348 million and $352 million, respectively. The total amount of unrecognized tax benefits that would benefit the effective tax rate as of December 31, 2018, 2017 and 2016 is $446 million, $332 million and $332 million, respectively, of which $33 million, $29 million and $24 million, respectively, would be in the form of tax attributes that would warrant a full valuation allowance. Further, the total amount of unrecognized tax benefit that would benefit the effective tax rate as of 2018 would be reduced by approximately $161 million of tax expense related to remeasurement from 35% to 21%. The total amount of unrecognized tax benefits anticipated to result in a net decrease to unrecognized tax benefits within 12 months of December 31, 2018 is estimated to be between $0 million and $10 million, primarily relating to statute of limitation lapses and tax exam settlements. The following is a reconciliation of the beginning and ending amounts of unrecognized tax benefits for the periods indicated (in millions):
|  | 2018 |  | 2017 |  | 2016
Balance at January 1 |  | $ | 348 |  |  | $ | 352 |  |  | $ | 364 |
Additions for current year tax positions |  | 2 |  |  | — |  |  | 2 |
Additions for tax positions of prior years |  | 146 |  |  | 2 |  |  | 1 |
Reductions for tax positions of prior years |  | (26 | ) |  | (5 | ) |  | (1 | )
Settlements |  | — |  |  | — |  |  | (13 | )
Lapse of statute of limitations |  | (7 | ) |  | (1 | ) |  | (1 | )
Balance at December 31 |  | $ | 463 |  |  | $ | 348 |  |  | $ | 352 |
The Company and certain of its subsidiaries are currently under examination by the relevant taxing authorities for various tax years. The Company regularly assesses the potential outcome of these examinations in each of the taxing jurisdictions when determining the adequacy of the amount of unrecognized tax benefit recorded. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, we believe we have appropriately accrued for our uncertain tax benefits. However, audit outcomes and the timing of audit settlements and future events that would impact our previously recorded unrecognized tax benefits and the range of anticipated increases or decreases in unrecognized tax benefits are subject to significant uncertainty. It is possible that the ultimate outcome of current or future examinations may exceed our provision for current unrecognized tax benefits in amounts that could be material, but cannot be estimated as of December 31, 2018. Our effective tax rate and net income in any given future period could therefore be materially impacted.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration