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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | 12. Income Taxes Components of the income tax provision applicable to federal, state and foreign income taxes for the years ended December 31, 2017, 2016 and 2015 are as follows (in thousands):
|  | 2017 |  |  | 2016 |  |  | 2015 |
Federal income tax benefit: |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | (42 | ) |  | $ | (24,777 | ) |  | $ | (42,020 | )
Deferred |  |  | (335,106 | ) |  |  | (134,592 | ) |  |  | (83,812 | )
|  |  | (335,148 | ) |  |  | (159,369 | ) |  |  | (125,832 | )
State income tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | (215 | ) |  |  | (257 | ) |  |  | (3,480 | )
Deferred |  |  | 4,511 |  |  |  | (14,163 | ) |  |  | (12,433 | )
|  |  | 4,296 |  |  |  | (14,420 | ) |  |  | (15,913 | )
Foreign income tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | (3,108 | ) |  |  | (368 | ) |  |  | (2,590 | )
Deferred |  |  | 249 |  |  |  | (3,405 | ) |  |  | (3,628 | )
|  |  | (2,859 | ) |  |  | (3,773 | ) |  |  | (6,218 | )
Total income tax benefit: |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | (3,365 | ) |  |  | (25,402 | ) |  |  | (48,090 | )
Deferred |  |  | (330,346 | ) |  |  | (152,160 | ) |  |  | (99,873 | )
Total income tax benefit: |  | $ | (333,711 | ) |  | $ | (177,562 | ) |  | $ | (147,963 | )
The difference between the statutory federal income tax rate and the effective income tax rate for the years ended December 31, 2017, 2016 and 2015 is summarized as follows:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Statutory tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State income taxes - net of the federal income tax benefit |  |  | 1.9 |  |  |  | 2.0 |  |  |  | 2.1 |
Permanent differences |  |  | (1.3 | ) |  |  | (0.1 | ) |  |  | (1.3 | )
One-time tax effects of tax reform |  |  | 66.7 |  |  |  | — |  |  |  | — |
Share-based payments |  |  | 3.6 |  |  |  | — |  |  |  | — |
Acquisition related differences |  |  | (3.3 | ) |  |  | — |  |  |  | — |
Other differences, net |  |  | (0.8 | ) |  |  | (1.1 | ) |  |  | (2.4 | )
Effective tax rate |  |  | 101.8 | % |  |  | 35.8 | % |  |  | 33.4 | %
The effective tax rate increased by approximately 66.0% to 101.8% for 2017 compared to 2016, primarily due to a 66.7% increase related to tax reform enacted on December 22, 2017 and a 3.6% increase for excess tax benefits from employee stock compensation deductions. These increases were partially offset by a 3.3% decrease in the effective tax rate for acquisitions that resulted in the revaluation of deferred tax assets and liabilities at the new state tax rates at which they are expected to reverse. The lower 2015 effective tax rate is primarily related to the impact of goodwill impairment charges in 2015, along with an adjustment to the Company’s deferred tax liability associated with the 2010 conversion of its Canadian operations to a controlled foreign corporation. Tax reform reduces the U.S. federal corporate tax rate from 35% to 21% beginning in 2018, requires companies to pay a one-time transition tax on foreign earnings that were previously tax deferred, creates new taxes on future foreign earnings, places a new limitation on the tax deductibility of interest expense, accelerates the expensing of certain business assets, and reduces the amount of executive pay that will be tax deductible, among other changes. Based on a reduced U.S. federal corporate tax rate of 21% from tax reform, the Company remeasured certain deferred tax assets and liabilities at the tax rates at which they are expected to reverse in the future. Due to the limited time to consider tax reform and its various interpretations, the Company is still analyzing and refining its calculations, which could potentially affect the measurement of these balances or give rise to new deferred tax amounts, however, in certain cases, the Company has made a reasonable estimate of the effects on its existing deferred tax balances and the one-time transition tax. For the items for which the Company was able to determine a reasonable estimate, it recognized a provisional amount, in accordance with SAB 118, of approximately $219 million of tax benefit, which is included as a component of income tax expense from continuing operations resulting in the above impact to the Company’s 2017 effective income tax rate. The one-time transition tax is based on the total post-1986 earnings and profits (E&P) of the Company’s foreign operation which it has previously deferred from U.S. income taxes. Based on its current analysis, the Company has estimated an E&P deficit and therefore has not recorded any additional taxes for the one-time transition tax. The Company notes that its analysis of the transition tax is provisional and represents a reasonable estimate resulting from the mandatory deemed repatriation of its post-1986 untaxed foreign E&P. Determining the provisional transition tax required a significant number of steps, including determining the composition of the Company’s post-1986 untaxed foreign E&P that is held in cash or liquid assets and other assets at several measurement dates, as a different rate is applied to each when determining the transition tax liability, and analyzing the Company’s accumulated foreign post-1986 E&P, including historical practices and assertions. As a result of these factors, as well as the proximity of the enactment of tax reform to its year-end, the Company had limited time to consider tax reform and its various interpretations and has not completed its calculation of the total post-1986 E&P amounts of its foreign operations. Adjustments to the Company’s estimates may occur once it finalizes these calculations. Prior to tax reform, the Company had elected to permanently reinvest unremitted earnings in Canada effective January 1, 2010, and it intended to do so for the foreseeable future. As a result, no deferred United States federal or state income taxes had been provided on such unremitted foreign earnings. With the enactment of tax reform, there is a new territorial tax system that provides for a 100% dividends received deduction on future earnings, if remitted. However, the Company will need to continue to evaluate its reinvestment intentions on future earnings and any other residual basis differences in order to determine whether it can continue to assert indefinite reinvestment or whether it will be required to provide for additional taxes that would be due on future earnings if remitted, such as foreign withholding taxes or state and local taxes. The Company will also need to determine whether it will be required to provide for additional taxes on any other outside basis differences in its foreign operations. Due to the limited time to consider these provisions, the Company is still evaluating how tax reform will affect its existing accounting position to indefinitely reinvest unremitted foreign earnings. The Company will continue to assert permanent reinvestment with respect to future unremitted earnings and has not recorded any deferred federal or state income taxes that would be provided on future unremitted earnings. The Company will finalize its intentions on whether it will permanently reinvest its foreign unremitted earnings within the measurement period provided under SAB 118. Tax reform also introduced a new GILTI U.S. tax on certain off-shore earnings at an effective tax rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for any related foreign tax credits. The Company is still evaluating the GILTI provisions of tax reform and its impact, if any, on the Company’s consolidated financial statements at December 31, 2017. The FASB staff allowed companies to adopt an accounting policy to either provide deferred taxes for GILTI or treat it as a tax cost in the year incurred. The Company has not yet determined its accounting policy because determining the impact of the GILTI provisions requires analysis of its existing legal entity structure, the reversal of differences in the assets and liabilities of its foreign subsidiaries, and its ability to offset any tax with foreign tax credits. As such, the Company did not record a deferred income tax expense or benefit related to the GILTI provisions in its consolidated statement of operations for the year ended December 31, 2017 and will finalize its evaluation of the GILTI provisions during the measurement period provided under SAB 118. In addition to the provisions above, the tax reform also changed the individuals whose compensation is subject to a $1 million cap on deductibility under Section 162(m) and includes performance-based compensation such as stock options and stock appreciation rights in the calculation. For taxable years beginning before December 31, 2017, a public company had been able to deduct up to $1 million of compensation paid to covered employees consisting of the chief executive officer and the next three highest compensated officers, but not the chief financial officer (CFO). However, the limit did not apply to performance-based compensation. The new law expands the definition of covered employees to include the CFO and any individual who has been considered a covered employee, even if that individual is no longer a covered employee. Thus, once an individual is a covered employee, the deduction limitation applies to compensation paid to that individual at any point in the future, including after a separation from service. Any individual who is a covered employee for a tax year after December 31, 2016 will remain a covered employee for all future years. The law also eliminates the exception for performance-based compensation. The provision generally applies to taxable years beginning after December 31, 2017 and provides a transition for compensation paid pursuant to a written binding contract that is in effect on November 2, 2017. The Company will need to carefully review the terms of its compensation plans and agreements to assess whether such plans and agreements are considered to be written binding contracts in effect on November 2, 2017. Due to the complexity of applying this new provision and the limited time to consider tax reform, the Company has not yet completed its analysis of these new provisions and will finalize its analysis during the measurement period provided under SAB 118. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, "Compensation-Stock Compensation". The new standard was effective for the Company on January 1, 2017. Among other provisions, the new standard requires that excess tax benefits and tax deficiencies that arise upon vesting or exercise of share-based payments be recognized as income tax benefits and expenses in the income statement. Previously, such amounts were recorded to additional paid-in-capital. This aspect of the new guidance was required to be adopted prospectively. The effective income tax rate for the year ended December 31, 2017 includes approximately $12 million of excess tax benefits from share-based compensation awards that vested or were exercised during the period. During 2017, there was significant merger and acquisition activity by the Company. Based on this activity, an evaluation was made of the Company’s overall state deferred tax rate, resulting in a slightly increased rate. The Company remeasured certain deferred tax assets and liabilities at the tax rates at which they are expected to reverse in the future and recorded additional taxes of approximately $11 million, impacting the 2017 effective income tax rate. The tax effect of significant temporary differences representing deferred tax assets and liabilities at December 31, 2017 and 2016 are as follows (in thousands):
|  | 2017 |  |  | 2016 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 285,542 |  |  | $ | 203,485 |
Alternative minimum tax credit |  |  | 7,907 |  |  |  | 7,907 |
Scientific research and experimental development tax credit |  |  | 898 |  |  |  | — |
Expense associated with stock options and restricted stock |  |  | 12,338 |  |  |  | 17,116 |
Workers' compensation allowance |  |  | 19,662 |  |  |  | 26,157 |
Federal benefit of state deferred tax liabilities |  |  | 5,660 |  |  |  | 5,310 |
Other |  |  | 27,066 |  |  |  | 14,998 |
Total deferred tax assets |  |  | 359,073 |  |  |  | 274,973 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property and equipment basis difference |  |  | (695,111 | ) |  |  | (911,972 | )
Other |  |  | (10,923 | ) |  |  | (9,538 | )
Total deferred tax liabilities |  |  | (706,034 | ) |  |  | (921,510 | )
Net deferred tax liability |  | $ | (346,961 | ) |  | $ | (646,537 | )
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized, and necessary allowances are provided. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the Company’s carryback availability, the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company expects the full carrying value of its deferred tax assets at December 31, 2017 and 2016 to be realized as a result of the timing of the reversals of its existing taxable temporary differences, which will give rise to taxable income and offset deductible temporary differences in the permitted carryforward periods. As of December 31, 2017, the Company does not consider a valuation allowance necessary. Other deferred tax assets consist primarily of the tax effect of various allowance accounts and tax-deferred expenses expected to generate future tax benefits of approximately $27.1 million. Other deferred tax liabilities of approximately $10.9 million consists primarily of the tax effect of receivables from insurance companies and tax-deferred income not yet recognized for tax purposes. For income tax purposes, the Company has approximately $1.1 billion of gross federal net operating losses, approximately $19.2 million of Canadian net operating losses and approximately $678 million of post-apportionment state net operating losses as of December 31, 2017. Of these amounts, approximately $11 million of Canadian and $1 million of state losses will be carried back to prior years and the remaining balance can be carried forward to future years. Net operating losses that can be carried forward, if unused, are scheduled to expire as follows: 2023—$137,000; 2024—$2.4 million; 2025—$2.8 million; 2026—$17.4 million; 2027—$102,000; 2029—$33.2 million; 2030—$28.6 million; 2031—$101.9 million; 2032—$9.7 million; 2034—$30,000; 2035—$302.7 million, 2036 - $644.6 million; and 2037—$647.1 million. As of December 31, 2017, the Company had no unrecognized tax benefits. The Company has established a policy to account for interest and penalties related to uncertain income tax positions as operating expenses. As of December 31, 2017, the tax years ended December 31, 2013 through December 31, 2016 are open for examination by U.S. taxing authorities. As of December 31, 2017, the tax years ended December 31, 2013 through December 31, 2016 are open for examination by Canadian taxing authorities.

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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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