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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | 13. Income Taxes Components of the income tax provision applicable to federal, state and foreign income taxes for the years ended December 31, 2018, 2017 and 2016 are as follows (in thousands):
|  | 2018 |  |  | 2017 |  |  | 2016 |
Federal income tax benefit: |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | (3,954 | ) |  | $ | (42 | ) |  | $ | (24,777 | )
Deferred |  |  | (35,081 | ) |  |  | (335,106 | ) |  |  | (134,592 | )
|  |  | (39,035 | ) |  |  | (335,148 | ) |  |  | (159,369 | )
State income tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 1,704 |  |  |  | (215 | ) |  |  | (257 | )
Deferred |  |  | (11,147 | ) |  |  | 4,511 |  |  |  | (14,163 | )
|  |  | (9,443 | ) |  |  | 4,296 |  |  |  | (14,420 | )
Foreign income tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | (2,552 | ) |  |  | (3,108 | ) |  |  | (368 | )
Deferred |  |  | 5,043 |  |  |  | 249 |  |  |  | (3,405 | )
|  |  | 2,491 |  |  |  | (2,859 | ) |  |  | (3,773 | )
Total income tax benefit: |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | (4,802 | ) |  |  | (3,365 | ) |  |  | (25,402 | )
Deferred |  |  | (41,185 | ) |  |  | (330,346 | ) |  |  | (152,160 | )
Total income tax benefit: |  | $ | (45,987 | ) |  | $ | (333,711 | ) |  | $ | (177,562 | )
The difference between the statutory federal income tax rate and the effective income tax rate for the years ended December 31, 2018, 2017 and 2016 is summarized as follows:
|  | 2018 |  |  | 2017 |  |  | 2016 |
Statutory tax rate |  |  | 21.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State income taxes - net of the federal income tax benefit |  |  | 1.2 |  |  |  | 1.9 |  |  |  | 2.0 |
Goodwill impairment |  |  | (6.9 | ) |  |  | — |  |  |  | — |
Permanent differences |  |  | (0.6 | ) |  |  | (1.3 | ) |  |  | (0.1 | )
Tax effects of tax reform |  |  | (1.3 | ) |  |  | 66.7 |  |  |  | — |
Share-based payments |  |  | (0.1 | ) |  |  | 3.6 |  |  |  | — |
Acquisition related differences |  |  | — |  |  |  | (3.3 | ) |  |  | — |
Valuation allowance |  |  | (3.7 | ) |  |  | — |  |  |  | — |
State deferred tax remeasurement |  |  | 2.3 |  |  |  | — |  |  |  | — |
Other differences, net |  |  | 0.6 |  |  |  | (0.8 | ) |  |  | (1.1 | )
Effective tax rate |  |  | 12.5 | % |  |  | 101.8 | % |  |  | 35.8 | %
The effective tax rate decreased by approximately 89.3% to 12.5% for 2018 compared to 2017. This was primarily due to Tax Reform, which resulted in a 66.7% increase in the 2017 effective tax rate due to the remeasurement of the U.S. deferred taxes and a 14% decrease in the 2018 effective tax rate due to the change in U.S. federal corporate tax rate. Also impacting the 2018 effective tax rate are certain goodwill impairment charges, which are not deductible for tax purposes, and valuation allowances being established against deferred tax assets in certain state and non-U.S. jurisdictions. The goodwill impairment and valuation allowances resulted in a 6.9% and 3.7% decrease in the effective tax rate, respectively. These decreases were partially offset by a 2.3% increase in the effective tax rate following the remeasurement of deferred tax assets and liabilities for state tax purposes. Tax Reform includes, among other things, a reduction of the U.S. federal corporate tax rate from 35% to 21% for tax years beginning 2018, a mandatory deemed repatriation tax on foreign earnings, repeal of the corporate alternative minimum tax, expensing of certain capital investments, and reducing the amount of executive pay that will be tax deductible. Tax Reform also makes fundamental changes to the taxation of multinational entities, including a shift from worldwide taxation with deferral to a hybrid territorial system, a minimum tax on certain low-taxed foreign earnings, and new measures to deter base erosion and promote export sales from the United States. For December 31, 2017, the Company recorded provisional amounts for certain enactment-date effects of Tax Reform by applying the guidance in Staff Accounting Bulletin 118 (“SAB 118”) because the Company had not yet completed its enactment-date accounting for these effects. In 2017, the Company recorded approximately $219 million of tax benefit related to the enactment-date effects of Tax Reform that related solely to adjusting deferred tax assets and liabilities to the new U.S. federal corporate tax rate at which they are expected to reverse. After the filing of the Company’s 2017 income tax returns in the fourth quarter of 2018, the Company completed its accounting for all of the enactment-date income tax effects of Tax Reform. As a result, the Company recognized $4.6 million of tax expense as an adjustment to the provisional amounts recorded at December 31, 2017 and included these adjustments as a component of income tax expense. The changes to 2017 enactment-date provisional amounts decreased the effective tax rate in 2018 by 1.3%. For Tax Reform, the one-time transition tax is based on the Company’s total post-1986 earnings and profits (“E&P”), the tax on which it previously deferred from U.S. income taxes under U.S. law. At December 31, 2017, the Company estimated an E&P deficit for each of its foreign subsidiaries and therefore did not record any additional taxes for the one-time transition tax. Upon further analysis of Tax Reform, along with notices and regulations issued and proposed by the U.S. Department of the Treasury and the Internal Revenue Service, the Company finalized its calculations of the transition tax liability for its 2017 income tax filings during the fourth quarter of 2018. The final transition tax computation resulted in approximately $13.7 million of Section 965 income inclusion which was completely offset by 2017 net operating losses. At December 31, 2017, the Company remeasured its U.S. deferred tax assets and liabilities based on the tax rates at which they were expected to reverse in the future and recorded a provisional tax benefit of approximately $219 million. Upon further analysis of certain aspects of Tax Reform along with the filing of the Company’s 2017 income tax returns, the Company adjusted its December 31, 2017 provisional estimate on the remeasurement of U.S. deferred tax assets and liabilities by recording additional tax expense of $1.7 million, which is included as a component of income tax expense. Effective 2018, Tax Reform also subjects a U.S. shareholder to tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. Guidance from the FASB allows an entity to make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. The Company has elected to account for GILTI in the year the tax is incurred. In 2018, the Company was not subject to the tax imposed by the GILTI provisions. In addition to the introduction of GILTI, Tax Reform introduced a new provision called the base erosion and anti-abuse tax (“BEAT”), which is aimed at preventing or reducing U.S. tax base erosion. The BEAT provisions eliminate the deductions for certain base-erosion payments made to related foreign corporations and imposes a new minimum tax if greater than regular tax. In 2018, the Company was not subject to the minimum tax imposed by the BEAT provisions. Prior to Tax Reform, the Company had elected to permanently reinvest unremitted earnings in Canada effective January 1, 2010, and it intends to do so for the foreseeable future. If the Company were to repatriate earnings, in the form of dividends or otherwise, it might be subject to certain income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable. The tax effect of significant temporary differences representing deferred tax assets and liabilities at December 31, 2018 and 2017 are as follows (in thousands):
|  | 2018 |  |  | 2017 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 324,389 |  |  | $ | 275,402 |
Tax credits |  |  | 6,404 |  |  |  | 9,053 |
Expense associated with stock options and restricted stock |  |  | 13,375 |  |  |  | 12,126 |
Workers' compensation allowance |  |  | 19,900 |  |  |  | 19,323 |
Other |  |  | 22,423 |  |  |  | 25,891 |
|  |  | 386,491 |  |  |  | 341,795 |
Allowance to reduce deferred tax asset to expected realizable value |  |  | (13,232 | ) |  |  | — |
Total deferred tax assets |  |  | 373,259 |  |  |  | 341,795 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property and equipment basis difference |  |  | (669,196 | ) |  |  | (678,093 | )
Other |  |  | (10,224 | ) |  |  | (10,663 | )
Total deferred tax liabilities |  |  | (679,420 | ) |  |  | (688,756 | )
Net deferred tax liability |  | $ | (306,161 | ) |  | $ | (346,961 | )
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. The Company considers carryback availability, the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. In 2018, the Company recorded $13.2 million of valuation allowances against its net deferred tax assets, with $4.9 million relating to certain state jurisdictions, $8.1 million relating to a Canadian subsidiary and $0.2 million relating to operations outside of North America. These valuation allowances were recorded due to a change in judgment as to the realizability of these assets in future tax years. For income tax purposes, the Company has approximately $1.3 billion of gross federal net operating losses, approximately $24.7 million of gross Canadian net operating losses and approximately $735 million of post-apportionment state net operating losses as of December 31, 2018, before valuation allowances. The majority of Federal net operating losses will expire in varying amounts, if unused, between 2034 and 2037. Federal net operating losses generated in 2018 can be carried forward indefinitely. Canadian net operating losses will expire in varying amounts, if unused, between 2036 and 2038. State net operating losses will expire in varying amounts, if unused, between 2023 and 2038. As of December 31, 2018, 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, 2018, the tax years ended December 31, 2013 through December 31, 2017 are open for examination by U.S. taxing authorities. As of December 31, 2018, the tax years ended December 31, 2012 through December 31, 2017 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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