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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was signed into law. The CARES Act includes provisions relating to delaying certain payroll tax payments, refundable payroll tax credits, net operating loss carryback periods, modifications to the net interest deduction limitations and technical corrections to the tax depreciation methods for qualified improvement property. The tax law changes in the CARES Act did not have a material impact on the Company’s income tax provision. The components of the Company’s income (loss) before income taxes and equity in earnings of non-consolidated affiliates by taxing jurisdiction for the years ended December 31, were:
| 2020 |  | 2019 |  | 2018
Income (Loss): |  |  |  |  |
U.S. | $ | (73,227) |  |  | $ | (17,491) |  |  | $ | (76,960) |
Non-U.S. | (15,175) |  |  | 38,358 |  |  | (11,709) |
| $ | (88,402) |  |  | $ | 20,867 |  |  | $ | (88,669) |
The provision (benefit) for income taxes by taxing jurisdiction for the years ended December 31, were:
| 2020 |  | 2019 |  | 2018
Current tax provision |  |  |  |  |
U.S. federal | $ | 3,016 |  |  | $ | 2,638 |  |  | $ | 444 |
U.S. state and local | 742 |  |  | 12 |  |  | 2 |
Non-U.S. | 4,241 |  |  | 2,875 |  |  | 7,584 |
| 7,999 |  |  | 5,525 |  |  | 8,030 |
Deferred tax provision (benefit): |  |  |  |  |
U.S. federal | 75,686 |  |  | 4,635 |  |  | (10,817) |
U.S. state and local | 34,404 |  |  | 1,130 |  |  | (3,476) |
Non-U.S. | (1,534) |  |  | (974) |  |  | 35,878 |
| 108,556 |  |  | 4,791 |  |  | 21,585 |
Income tax expense (benefit) | $ | 116,555 |  |  | $ | 10,316 |  |  | $ | 29,615 |
A reconciliation of income tax expense (benefit) using the U.S. federal income tax rate compared with actual income tax expense for the years ended December 31, is as follows:
| 2020 |  | 2019 |  | 2018
Income (loss) before income taxes, equity in non-consolidated affiliates and noncontrolling interest | $ | (88,402) |  |  | $ | 20,867 |  |  | $ | (88,669) |
Statutory income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Tax expense (benefit) using U.S. statutory income tax rate | (18,564) |  |  | 4,382 |  |  | (18,621) |
State and foreign taxes | (3,486) |  |  | 1,496 |  |  | (3,944) |
Non-deductible stock-based compensation | 1,162 |  |  | 3,823 |  |  | 1,512 |
Global intangible low-taxed income | 1,363 |  |  | 1,147 |  |  | 710 |
Base erosion and anti-abuse tax | 4,697 |  |  | 2,504 |  |  | 389 |
Other non-deductible expense | 1,043 |  |  | 273 |  |  | 1,388 |
Change to valuation allowance | 128,938 |  |  | (2,830) |  |  | 49,482 |
Effect of the difference in U.S. federal and local statutory rates | 67 |  |  | 1,422 |  |  | (152) |
Noncontrolling interests | (4,649) |  |  | (3,566) |  |  | (2,674) |
Other impacts of foreign operations | 1,160 |  |  | 2,724 |  |  | 612 |
Impact of goodwill impairments | 10,158 |  |  | 436 |  |  | 8,703 |
Adjustments to accrued taxes in previous periods | 4,641 |  |  | (3,544) |  |  | 1,192 |
Adjustment to deferred tax balances* | (9,999) |  |  | 1,920 |  |  | (8,845) |
Other, net | 24 |  |  | 129 |  |  | (137) |
Income tax expense (benefit) | $116,555 |  | $10,316 |  | $29,615
Effective income tax rate | (131.8)% |  | 49.4% |  | (33.4)%
*Adjustments to deferred tax balances in 2020 are primarily offset by changes to valuation allowance. Income tax expense for the twelve months ended December 31, 2020 was $116,555 (associated with a pre-tax loss of $88,402) compared to an income tax expense of $10,316 (associated with pre-tax income of $20,867) for the twelve months ended December 31, 2019. Income tax expense in 2020 included the impact of increasing valuation allowance primarily associated with U.S. deferred tax assets and the impact of non-deductible goodwill impairments of foreign operations. Income tax expense in 2019 included the impact of base erosion and anti-abuse tax and non-deductible stock compensation offset by a reduction in valuation allowance primarily associated with Canadian deferred tax assets. Income taxes receivable were $1,480 and $5,025 at December 31, 2020 and 2019, respectively, and were included in other current assets on the balance sheet. Income taxes payable were $9,238 and $11,722 at December 31, 2020 and 2019, respectively, and were included in accrued and other liabilities on the balance sheet. It is the Company’s policy to classify interest and penalties arising in connection with unrecognized tax benefits as a component of income tax expense. The tax effects of significant temporary differences representing deferred tax assets and liabilities at December 31, were as follows:
| 2020 |  | 2019
Deferred tax assets: |  |  |
Accounting reserves and other | $ | 20,831 |  |  | $ | 10,987 |
Net operating loss carryforwards | 47,139 |  |  | 60,705 |
Interest deductions | 20,819 |  |  | 16,797 |
Refinancing charge | — |  |  | 669 |
Goodwill and intangibles | 122,045 |  |  | 117,421 |
Stock compensation | 1,693 |  |  | 1,736 |
Pension plan | 4,856 |  |  | 4,414 |
Unrealized foreign exchange | 11,995 |  |  | 11,373 |
Capital loss carryforwards | 13,657 |  |  | 13,081 |
Lease liabilities | 77,870 |  |  | 76,397 |
Gross deferred tax asset | 320,905 |  |  | 313,580 |
Less: valuation allowance | (198,452) |  |  | (65,649) |
Net deferred tax assets | 122,453 |  |  | 247,931 |
Deferred tax liabilities: |  |  |
Right-of-use assets | $ | (57,890) |  |  | $ | (67,613) |
Refinancing charge | (1,675) |  |  | — |
Withholding taxes | (475) |  |  | (546) |
Capital assets | (1,893) |  |  | (382) |
Goodwill amortization | (88,326) |  |  | (98,677) |
Total deferred tax liabilities | (150,259) |  |  | (167,218) |
Net deferred tax asset (liability) | $ | (27,806) |  |  | $ | 80,713 |
Deferred tax assets | $ | 179 |  |  | $ | 84,900 |
Deferred tax liabilities | (27,985) |  |  | (4,187) |
| $ | (27,806) |  |  | $ | 80,713 |
The Company has net operating loss carryforwards of $229,224 which expire in years 2021 through 2040. These definite lived net operating loss carryforwards consist of $1,533 relating to U.S. federal, $132,655 relating to U.S. states, and $95,036 relating to non-U.S. The Company also has indefinite net operating loss carryforwards of $122,299. These indefinite loss carryforwards consist of $42,003 relating to the U.S. federal, $69,967 relating to U.S. states, and $10,329 relating to non-U.S. In addition, the Company has indefinite capital loss carryforwards of $103,074 in Canada and foreign tax credit carryforwards in the U.S. of $5,460 which expire in years 2024 through 2027. The Company maintained a valuation allowance of $198,452 as of December 31, 2020 relating to both U.S. and foreign deferred tax assets, and $65,649 as of December 31, 2019 relating to foreign deferred tax assets. The Company records a valuation allowance against deferred income tax assets when management believes it is more likely than not that some portion or all of the deferred income tax assets will not be realized. Management evaluates all positive and negative evidence and considers factors such as the reversal of taxable temporary differences, taxable income in eligible carryback years, future taxable income, and tax planning strategies. A change to these factors could impact the estimated valuation allowance and income tax expense. In 2020, the Company’s evaluation resulted in the recognition of a valuation allowance against its U.S. deferred tax assets. Given a three-year U.S. cumulative pre-tax loss as of December 31, 2020 and other factors, the Company concluded it is more likely than not that such U.S. deferred tax assets will not be realized. Income tax expense for the year ended December 31, 2020 included a charge of approximately $129 million in connection with the change in the valuation allowance, which primarily relates to the U.S. The Company has historically asserted that its unremitted foreign earnings are permanently reinvested except for certain international entities. The Company has provided $475 and $546 as an estimate of the tax costs of repatriation with respect to $4,745 and $5,462 of undistributed foreign earnings from certain international entities that are not subject to the permanent reinvestment assertion as of December 31, 2020 and 2019. We have not changed our permanent reinvestment assertion with respect to any other international entities as we intend to use the related historical earnings and profits to fund international operations and investments, and therefore have not recorded income taxes on such amounts. As of December 31, 2020 and 2019, the Company recorded a liability for unrecognized tax benefits as well as applicable penalties and interest in the amount of $1,066 and $1,107, respectively. As of December 31, 2020 and 2019, accrued penalties and interest included in unrecognized tax benefits were approximately $135 and $111, respectively. If these unrecognized tax benefits were to be recognized, it would affect the Company’s effective tax rate.
| 2020 |  | 2019 |  | 2018
A reconciliation of the change in unrecognized tax benefits is as follows: |  |  |  |  |
Unrecognized tax benefit - Beginning Balance | $ | 996 |  |  | $ | 887 |  |  | $ | 1,433 |
Current year positions | 581 |  |  | 275 |  |  | — |
Prior period positions | — |  |  | — |  |  | 7 |
Settlements | — |  |  | — |  |  | (314) |
Lapse of statute of limitations | (170) |  |  | (166) |  |  | (239) |
Unrecognized tax benefits - Ending Balance | $ | 1,407 |  |  | $ | 996 |  |  | $ | 887 |
The Company has presented $477 of the unrecognized tax benefits as of December 31, 2020 as a reduction to the deferred tax asset. It is reasonably possible that the amount of unrecognized tax benefits could decrease by a range of $400 to $500 in the next twelve months as a result of expiration of certain statute of limitations. The Company is subject to taxation and files income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions. The statute of limitations for tax years prior to 2017 are closed for U.S. federal purposes. The statute of limitations for tax years prior to 2010 have also expired in non-U.S. jurisdictions.

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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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