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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Earnings (loss) from continuing operations before income taxes | Following is a summary of earnings before income taxes for United States and foreign operations:
| 2018 |  | 2017 |  | 2016
United States | $ | 387,564 |  |  | 754,562 |  |  | 627,567 |
Foreign | 661,637 |  |  | 563,295 |  |  | 613,558 |
Earnings before income taxes | $ | 1,049,201 |  |  | 1,317,857 |  |  | 1,241,125 |
Income tax expense (benefit) | Income tax expense (benefit) for the years ended December 31, 2018, 2017 and 2016 consists of the following:
| 2018 |  | 2017 |  | 2016
Current income taxes: |  |  |  |  |
U.S. federal | $ | 22,700 |  |  | 327,697 |  |  | 247,917 |
State and local | 14,521 |  |  | 17,811 |  |  | 31,939 |
Foreign | 58,669 |  |  | 73,248 |  |  | 61,712 |
Total current | 95,890 |  |  | 418,756 |  |  | 341,568 |
Deferred income taxes: |  |  |  |  |
U.S. federal | 54,983 |  |  | (17,419 | ) |  | (16,167 | )
State and local | 19,076 |  |  | (3,046 | ) |  | (22,115 | )
Foreign | 14,397 |  |  | (55,126 | ) |  | 4,273 |
Total deferred | 88,456 |  |  | (75,591 | ) |  | (34,009 | )
Total | $ | 184,346 |  |  | 343,165 |  |  | 307,559 |
Reconciliation of income tax expense (benefit) | Income tax expense (benefit) attributable to earnings before income taxes differs from the amounts computed by applying the U.S. statutory federal income tax rate to earnings before income taxes as follows:
| 2018 |  | 2017 |  | 2016
Income taxes at statutory rate | $ | 220,332 |  |  | 461,250 |  |  | 434,394 |
State and local income taxes, net of federal income tax benefit | 22,315 |  |  | 10,133 |  |  | 6,298 |
Foreign income taxes(a) | (39,915 | ) |  | (113,520 | ) |  | (111,217 | )
Change in valuation allowance | 2,472 |  |  | 10,008 |  |  | (21,106 | )
Manufacturing deduction | — |  |  | (11,911 | ) |  | (15,186 | )
2017 revaluation of deferred tax assets and liabilities (b) | — |  |  | (150,546 | ) |  | — |
Transition Tax | 28,201 |  |  | 105,165 |  |  | — |
Transition tax planning initiatives | (18,706 | ) |  | 14,825 |  |  | 3,881 |
Tax contingencies and audit settlements, net | (31,874 | ) |  | 23,097 |  |  | 2,496 |
Other, net | 1,521 |  |  | (5,336 | ) |  | 7,999 |
| $ | 184,346 |  |  | 343,165 |  |  | 307,559 |
(a) Foreign income taxes includes statutory rate differences, financing arrangements, withholding taxes, local income taxes, notional deductions, and other miscellaneous items. The significant decrease in foreign income taxes for 2018 is primarily due to the impact of the U.S. statutory rate reduction from 35% to 21% as a result of the Tax Cuts and Jobs Act (“TCJA”) discussed below. (b) 2017 revaluation of deferred tax assets and liabilities includes $106,107 related to the TCJA and $44,439 related to Belgium tax reform.
Deferred tax assets and deferred tax liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2018 and 2017 are presented below:
| 2018 |  | 2017
Deferred tax assets: |  |  |
Accounts receivable | $ | 8,312 |  |  | 18,481 |
Inventories | 47,212 |  |  | 41,169 |
Employee benefits | 37,335 |  |  | 42,191 |
Accrued expenses and other | 71,621 |  |  | 52,635 |
Deductible state tax and interest benefit | 2,904 |  |  | 2,087 |
Intangibles | 16,134 |  |  | 22,119 |
Federal, foreign and state net operating losses and credits | 575,625 |  |  | 530,978 |
Gross deferred tax assets | 759,143 |  |  | 709,660 |
Valuation allowance | (347,786 | ) |  | (362,963 | )
Net deferred tax assets | 411,357 |  |  | 346,697 |
Deferred tax liabilities: |  |  |
Inventories | (18,332 | ) |  | (14,423 | )
Plant and equipment | (477,734 | ) |  | (397,668 | )
Intangibles | (181,436 | ) |  | (170,817 | )
Other liabilities | (96,134 | ) |  | (31,702 | )
Gross deferred tax liabilities | (773,636 | ) |  | (614,610 | )
Net deferred tax liability | $ | (362,279 | ) |  | (267,913 | )
Reconciliation of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| 2018 |  | 2017
Balance as of January 1 | $ | 65,631 |  |  | 46,434 |
Additions based on tax positions related to the current year (a) | 1,304,447 |  |  | 28,663 |
Additions for tax positions of acquired companies | 1,413 |  |  | 1,776 |
Additions for tax positions of prior years | 5,098 |  |  | 876 |
Transition tax planning initiatives | (27,470 | ) |  | — |
Reductions resulting from the lapse of the statute of limitations | (8,110 | ) |  | (14,502 | )
Settlements with taxing authorities | (9,773 | ) |  | (655 | )
Effects of foreign currency translation | (523 | ) |  | 3,039 |
Balance as of December 31 | $ | 1,330,713 |  |  | 65,631 |
(a) Includes tax effected loss of $1,298,737 on Luxembourg hybrid instruments redemptions. This $1,298,737 of unrecognized benefit is presented as a reduction to the related deferred tax asset in the balance sheet.

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