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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Taxes [Abstract] |
Income Taxes | Note J – Income Taxes ﻿ The components of income (loss) from continuing operations before income taxes for each of the three years presented and income tax expense (benefit) attributable thereto were as follows. ﻿ ﻿
﻿ |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿(Thousands of dollars) | 2018 |  | 2017 |  | 2016
﻿Income (loss) from continuing operations before income taxes |  |  |  |  |  |
﻿ United States | $ | 14,907 |  | (299,349) |  | (595,196)
﻿ Foreign |  | 417,431 |  | 371,151 |  | 102,081
﻿ Total | $ | 432,338 |  | 71,802 |  | (493,115)
﻿Income tax expense (benefit) |  |  |  |  |  |
﻿ Federal – Current | $ | (9,765) |  | – |  | -
﻿ – Deferred |  | (131,200) |  | 156,065 |  | (197,450)
﻿ Total Federal |  | (140,965) |  | 156,065 |  | (197,450)
﻿ State |  | 3,299 |  | 4,230 |  | 13,984
﻿ Foreign – Current |  | 202,775 |  | 122,318 |  | 146,861
﻿ – Deferred |  | (55,779) |  | 100,125 |  | (182,567)
﻿ Total Foreign |  | 146,996 |  | 222,443 |  | (35,706)
﻿ Total | $ | 9,330 |  | 382,738 |  | (219,172)
﻿ The following table reconciles income taxes based on the U.S. statutory tax rate to the Company’s income tax expense. ﻿ ﻿
﻿ |  |  |  |  |  |
﻿(Thousands of dollars) | 2018 |  | 2017 |  | 2016
﻿Income tax expense (benefit) based on the U.S. statutory tax rate | $ | 90,791 |  | 25,131 |  | (172,590)
﻿Revaluation of deferred tax (US tax reform) |  | – |  | 118,004 |  | –
﻿Tax impact of deemed repatriation of foreign invested earnings (U.S. tax reform) |  | (135,700) |  | 156,000 |  | –
﻿Deferred tax effect on Canadian earnings no longer indefinitely invested |  | – |  | 65,000 |  | –
﻿Foreign income (loss) subject to foreign tax rates different than the U.S. statutory rate |  | 72,007 |  | 12,658 |  | 8,582
﻿State income taxes, net of federal benefit |  | 2,607 |  | 2,438 |  | 9,090
﻿U.S. tax benefit on certain foreign upstream investments |  | (14,702) |  | (32,926) |  | (21,336)
﻿Tax effects on sale of Canadian assets |  | – |  | – |  | (89,473)
﻿Tax effects on sale of Malaysian assets |  | – |  | – |  | 2,080
﻿Increase in deferred tax asset valuation allowance related to other foreign exploration expenditures |  | 3,283 |  | 18,601 |  | 25,734
﻿Other, net |  | (8,956) |  | 17,832 |  | 18,741
﻿ Total | $ | 9,330 |  | 382,738 |  | (219,172)
﻿ Note J – Income Taxes (Contd.) ﻿ The Tax Cuts and Jobs Act On December 22, 2017, the U.S. enacted into legislation the Tax Cuts and Jobs Act (2017 Tax Act). For the year ended December 31, 2017, the Company recorded a provisional tax expense of $274.0 million directly related to the impacts of the 2017 Tax Act. The charge included the impact of a deemed repatriation of foreign earnings and the re-measurement of deferred tax assets and liabilities. During 2018, the Company completed the accounting for the income tax effects related to the 2017 Tax Act before the end of the measurement period. The Company revised the provisional amount recorded in 2017 and recognized a favorable income tax adjustment of $135.7 million primarily related to the reinstatement of a deferred tax asset for 2017 net operating losses, which in 2017 was assumed utilized against the deemed repatriation. This reinstatement followed April 2, 2018 Internal Revenue Service guidance related to the Section 965(n) election. This guidance allowed the Company to preserve the 2017 tax net operating loss as a carryforward and allowed previously unused foreign tax credits to be credited against all but $26 million of current income tax on the deemed inclusion of foreign earnings. The $26 million tax is further reduced by $16 million of post-2017 foreign tax credits allowed to be carried back as an offset, which results in a net $10.1 million tax on the deemed repatriation. This tax is fully offset by $29.7 million of AMT credit carryforwards to 2017, with half of the $19.6 million remainder expected to be refunded in late 2019, and the balance to be refunded or available to offset future U.S. income tax obligations over the next four years. ﻿ An analysis of the Company’s deferred tax assets and deferred tax liabilities at December 31, 201 8 and 201 7 showing the tax effects of significant temporary differences follows. ﻿
﻿ |  |  |  |
﻿ |  |  |  |
﻿(Thousands of dollars) | 2018 |  | 2017
﻿Deferred tax assets |  |  |  |
﻿ Property and leasehold costs | $ | 491,660 |  | 488,584
﻿ Liabilities for dismantlements |  | 88,075 |  | 98,444
﻿ Postretirement and other employee benefits |  | 113,826 |  | 134,444
﻿ Alternative minimum tax |  | 9,765 |  | 29,710
﻿ Foreign tax credit carryforwards |  | – |  | 228,159
﻿ U. S. net operating loss |  | 496,629 |  | 272,930
﻿ Other deferred tax assets |  | 19,974 |  | 13,892
﻿ Total gross deferred tax assets |  | 1,219,929 |  | 1,266,163
﻿ Less valuation allowance |  | (213,815) |  | (476,256)
﻿ Net deferred tax assets |  | 1,006,114 |  | 789,907
﻿Deferred tax liabilities |  |  |  |
﻿ Deferred tax on undistributed foreign earnings |  | (5,000) |  | (65,000)
﻿ Accumulated depreciation, depletion and amortization |  | (742,562) |  | (669,638)
﻿ Other deferred tax liabilities |  | (28,802) |  | (2,824)
﻿ Total gross deferred tax liabilities |  | (776,364) |  | (737,462)
﻿ Net deferred tax assets | $ | 229,750 |  | 52,445
﻿ In management’s judgment, the net deferred tax assets in the preceding table are more likely than not to be realized based on the consideration of deferred tax liability reversals and future taxable income. The valuation allowance for deferred tax assets relate primarily to tax assets arising in foreign tax jurisdictions that in the judgment of management at the present time are more likely than not unexpected to be realized. The valuation allowance decreased $262 million in 2018 primarily due to a decrease in foreign tax credit carryforwards. Subsequent reductions of the valuation allowance are expected to be reported as reductions of tax expense assuming no offsetting change in the deferred tax asset. ﻿ The Company has an estimated U.S. net operating loss of $2.36 billion at year-end 2018 with a corresponding deferred tax asset of $496.6 million. The Company believes the U.S. net operating loss being carried forward will be utilized in future periods prior to expirations in 2036 and 2037. Note J – Income Taxes (Contd.) ﻿ Other Information ﻿ During 2018 the Company repatriated $1.2 billion to the U.S. and paid $60 million of related Canadian withholding tax. $1.3 billion was reflected on the Company’s December 31, 2017 balance sheet as earnings not permanently reinvested, with an accompanying $65.0 million liability. Currently the Company considers $100.0 million of Canada’s past foreign earnings not permanently reinvested, with an accompanying $5.0 million liability. At December 31, 2018, $1.2 billion of past foreign earnings are considered permanently reinvested. The Company closely and routinely monitors these reinvestment positions considering underlying facts and circumstances pertinent to our business and the future operation of the company. ﻿ Uncertain Income Tax Positions The financial statement recognition of the benefit for a tax position is dependent upon the benefit being more likely than not to be sustainable upon examination. If this threshold is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. Liabilities associated with uncertain income tax positions are included in Deferred credits and other liabilities in the Consolidated Balance Sheets. A reconciliation of the beginning and ending amount of the consolidated liability for unrecognized income tax benefits during the three years presented is shown in the following table. ﻿ ﻿ ﻿
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﻿ |  |  |  |  |  |
﻿(Thousands of dollars) | 2018 |  | 2017 |  | 2016
﻿Balance at January 1 | $ | 3,437 |  | 7,417 |  | 6,631
﻿Additions for tax positions related to current year |  | 454 |  | 769 |  | 756
﻿Settlements due to lapse of time |  | (988) |  | (4,834) |  | –
﻿Foreign currency translation effect |  | – |  | 85 |  | 30
﻿ Balance at December 31 | $ | 2,903 |  | 3,437 |  | 7,417
﻿ All additions or settlements to the above liability affect the Company’s effective income tax rate in the respective period of change. The Company accounts for any applicable interest and penalties on uncertain tax positions as a component of income tax expense. The Company also had other recorded liabilities as of December 31, 2018, 2017 and 2016 for interest and penalties of $0.2 million, $0.1 million and $0.3 million, respectively, associated with uncertain tax positions. Income tax expense for the years ended December 31, 201 8, 201 7 and 201 6 included net benefits for interest and penalties of $0.1 million, $0.2 million and $0.1 million, respectively, associated with uncertain tax positions. ﻿ During the next twelve months, the Company currently expects to add between $0.2 million and $1.0 million to the liability for uncertain taxes for 2019 events. Although existing liabilities could be reduced by settlement with taxing authorities or lapse due to statute of limitations, the Company believes that the changes in its unrecognized tax benefits due to these events will not have a material impact on the Consolidated Statement of Operations during 2019. ﻿ The Company’s tax returns in multiple jurisdictions are subject to audit by taxing authorities. These audits often take years to complete and settle. Although the Company believes that recorded liabilities for unsettled issues are adequate, additional gains or losses could occur in future years from resolution of outstanding unsettled matters. As of December 31, 2018, the earliest years remaining open for audit and/or settlement in the Company’s major taxing jurisdictions are as follows: United States – 2015; Canada – 2013; Malaysia – 2012; and United Kingdom – 2017.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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