XML 46 R25.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Note 18 - Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2017
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | NOTE 18 — INCOME TAXES (Restated) As further described in Note 1, the Company has restated, for 2017, and revised, for 2016 and 2015, its previously issued consolidated financial statements for the years ended December 31, 2017, 2016 and 2015. At December 31, 2017, the Company had U.S. federal net operating loss (“NOL”) carryforwards of approximately $190.0 million and state NOL carryforwards of approximately $238.1 million, available to reduce future taxable income, which expire between 2029 and 2037 for federal NOLs and between 2018 and 2037 for state NOLs. The state tax credits in the amount of $0.8 million at December 31, 2017 are available for an indefinite period. The PTCs in the amount of $85.2 million at December 31, 2017 are available for a 20 -year period and expire between 2026 and 2037. The Foreign Tax Credits (“FTCs”) in the amount of $86.2 million at December 31, 2017 are available for a 10 -year period and begin to expire in 2027. The Company has recorded deferred tax assets for net operating losses, foreign tax credits, and production tax credits. Realization of the deferred tax assets and tax credits is dependent on generating sufficient taxable income in appropriate jurisdictions prior to expiration of the NOL carryforwards and tax credits. Based upon available evidence of the Company’s ability to generate additional taxable income in the future and historical losses in prior years, a valuation allowance in the amount of $77.6 million and $116.2 million is recorded against the U.S. deferred tax assets as of December 31, 2017 and 2016, respectively, as it is more likely than not that the deferred tax assets will not be realized. The decrease in the valuation allowance of $38.6 million is based upon new available evidence of the Company's ability to generate additional taxable income in the U.S. due to the closing of the SCPPA portfolio and the taxable income impacts of the recently enacted Tax Act, discussed further below. The Company is maintaining a valuation allowance of $77.6 million against a portion of the U.S. foreign tax credits, production tax credits, state tax credits and state NOLs that are expected to expire before they can be utilized in future periods. U.S. and foreign components of income from continuing operations, before income taxes and equity in income (losses) of investees consisted of:
|  | Year Ended December 31, |
|  | 2017 (As restated) |  |  | 2016 |  |  | 2015 |
|  | (Dollars in thousands) |
U.S. |  | $ | 13,680 |  |  | $ | (7,109 | ) |  | $ | (236 | )
Non-U.S. (foreign) |  |  | 157,050 |  |  |  | 148,197 |  |  |  | 113,835 |
Total income from continuing operations, before income taxes and equity in losses of investees |  | $ | 170,730 |  |  | $ | 141,088 |  |  | $ | 113,599 |
The components of the provision (benefit) for income taxes, net are as follows:
|  | Year Ended December 31, |
|  | 2017 (As restated) |  |  | 2016 |  |  | 2015 |
|  | (Dollars in thousands) |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 43,935 |  |  | $ | — |  |  | $ | 51 |
State |  |  | 43 |  |  |  | (276 | ) |  |  | 252 |
Foreign |  |  | 11,186 |  |  |  | 13,554 |  |  |  | 18,808 |
Total current income tax expense |  | $ | 55,164 |  |  | $ | 13,278 |  |  | $ | 19,111 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (55,718 | ) |  |  | 57 |  |  |  | 168 |
State |  |  | (3,284 | ) |  |  | — |  |  |  | — |
Foreign |  |  | 25,502 |  |  |  | 23,724 |  |  |  | (35,336 | )
Total deferred tax provision (benefit) |  |  | (33,500 | ) |  |  | 23,781 |  |  |  | (35,168 | )
Total provision (benefit) for income taxes |  | $ | 21,664 |  |  | $ | 37,059 |  |  | $ | (16,057 | )
The significant components of the deferred income tax expense (benefit) are as follows:
|  | Year Ended December 31, |
|  | 2017 (As restated) |  |  | 2016 |  |  | 2015 |
|  | (Dollars in thousands) |
Other deferred tax expense (exclusive of the effect of other components listed below) |  | $ | 4,337 |  |  | $ | (1,822 | ) |  | $ | 2,034 |
Usage (benefit) of operating loss carryforwards - U.S. |  |  | 72,293 |  |  |  | (28,065 | ) |  |  | (5,576 | )
Change in valuation allowance |  |  | (38,548 | ) |  |  | 23,336 |  |  |  | (40,999 | )
Change in foreign valuation allowance |  |  | — |  |  |  | — |  |  |  | (49,701 | )
Change in foreign income tax |  |  | 25,502 |  |  |  | 23,724 |  |  |  | 14,365 |
Change in lease transaction |  |  | — |  |  |  | — |  |  |  | 4,574 |
Change in tax monetization transaction |  |  | (3,091 | ) |  |  | 51,040 |  |  |  | 16,004 |
Change in depreciation |  |  | (29,265 | ) |  |  | (42,411 | ) |  |  | (205 | )
Change in foreign tax credits |  |  | (86,206 | ) |  |  | — |  |  |  | — |
Change in withholding tax |  |  | 14,400 |  |  |  | — |  |  |  | — |
Change in state and investment tax credits |  |  | (144 | ) |  |  | — |  |  |  | — |
Change in intangible drilling costs |  |  | 19,008 |  |  |  | 4,511 |  |  |  | 4,932 |
Change in production tax credits and alternative minimum tax credit |  |  | (2,086 | ) |  |  | (11,643 | ) |  |  | 610 |
Basis difference in partnership interests |  |  | (9,700 | ) |  |  | 5,111 |  |  |  | 18,794 |
|  | $ | (33,500 | ) |  | $ | 23,781 |  |  | $ | (35,168 | )
Reconciliation of the U.S. federal statutory tax rate to the Company’s effective income tax rate is as follows:
|  | Year Ended December 31, |
|  | 2017 (As restated) |  |  | 2016 |  |  | 2015 |
U.S. federal statutory tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
Impact of federal tax reform |  |  | (12.4 | ) |  |  | - |  |  |  | - |
Transition tax inclusion |  |  | 42.1 |  |  |  | - |  |  |  | - |
Foreign tax credits |  |  | (50.5 | ) |  |  | - |  |  |  | - |
Tax basis adjustment |  |  | - |  |  |  | (4.9 | ) |  |  | 34.9 |
Withholding tax |  |  | 34.1 |  |  |  | - |  |  |  | - |
Valuation allowance - U.S. |  |  | (22.6 | ) |  |  | 16.5 |  |  |  | (36.1 | )
Valuation allowance – foreign |  |  | - |  |  |  | - |  |  |  | (43.8 | )
State income tax, net of federal benefit |  |  | 1.1 |  |  |  | (0.6 | ) |  |  | 0.6 |
Effect of foreign income tax, net |  |  | (10.7 | ) |  |  | (10.3 | ) |  |  | (5.9 | )
Production tax credits |  |  | (1.2 | ) |  |  | (8.3 | ) |  |  | (0.1 | )
Subpart F income |  |  | 1.7 |  |  |  | 0.3 |  |  |  | 1.3 |
Other, net |  |  | (3.9 | ) |  |  | (1.4 | ) |  |  | - |
Effective tax rate |  |  | 12.7 | % |  |  | 26.3 | % |  |  | (14.1% | )
The net deferred tax assets and liabilities consist of the following:
|  | December 31, |
|  | 2017 (As restated) |  |  | 2016 |
|  | (Dollars in thousands) |
Deferred tax assets (liabilities): |  |  |  |  |  |  |  |
Net foreign deferred taxes, primarily depreciation |  | $ | (61,961 | ) |  | $ | (36,413 | )
Depreciation |  |  | (65,315 | ) |  |  | (10,253 | )
Intangible drilling costs |  |  | 13,003 |  |  |  | 24,856 |
Net capital loss carryforward - U.S. |  |  | 55,084 |  |  |  | 127,633 |
Tax monetization transaction |  |  | (13,134 | ) |  |  | (96,293 | )
State and Investment tax credits |  |  | 813 |  |  |  | 1,341 |
Production tax credits |  |  | 85,193 |  |  |  | 82,435 |
Foreign tax credits |  |  | 86,206 |  |  |  | - |
Withholding tax |  |  | (14,400 | ) |  |  | - |
Stock options amortization |  |  | 1,166 |  |  |  | 1,476 |
Basis difference in partnership interest |  |  | (16,817 | ) |  |  | (18,200 | )
Accrued liabilities and other |  |  | 3,109 |  |  |  | 3,241 |
Total deferred tax assets (liabilities) |  |  | 72,947 |  |  |  | 79,823 |
Less - valuation allowance |  |  | (77,571 | ) |  |  | (116,234 | )
Total |  | $ | (4,624 | ) |  | $ | (36,411 | )
The following table presents a reconciliation of the beginning and ending valuation allowance:
|  | December 31, |
|  | 2017 (As restated) |  |  | 2016 |  |  | 2015 |
|  | (Dollars in thousands) |
Balance at beginning of the year |  | $ | 116,234 |  |  | $ | 92,898 |  |  | $ | 183,598 |
Additions to valuation allowance |  |  | 46,560 |  |  |  | 23,336 |  |  |  | - |
Release of valuation allowance |  |  | (85,223 | ) |  |  | - |  |  |  | (90,700 | )
Balance at end of the year |  | $ | 77,571 |  |  | $ | 116,234 |  |  | $ | 92,898 |
In October 2016, the FASB issued Accounting Standards Update 2016 - 16, Income Taxes on Intercompany Transfers (ASU 2016 - 16 ), effective in fiscal years beginning after December 15, 2017, for public companies. In general, the new guidance requires a reporti ng entity to recognize the tax expense from intra-entity transfers of assets other than inventory in the selling entity's tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buying entity's jurisdiction would also be recognized at the time of the transfer. For additional information on the new accounting standard related to tax effects associated with intercompany transfers of assets please see “ New accounting pronouncements effective in future periods” in Note 1 to our consolidated financial statements set forth in Item 8 of this annual report. The following table presents the deferred taxes on the balance sheet as of the dates indicated:
|  | December 31, |
|  | 2017 (As restated) |  |  | 2016 |  |  | 2015 |
|  | (Dollars in thousands) |
Non-current deferred tax assets |  | $ | 57,337 |  |  | $ | — |  |  | $ | — |
Non-current deferred tax liabilities |  |  | (61,961 | ) |  |  | (36,411 | ) |  |  | (28,989 | )
Total Non-current deferred tax assets, net |  |  | (4,624 | ) |  |  | (36,411 | ) |  |  | (28,989 | )
Uncertain tax benefit offset (1) |  |  | (95 | ) |  |  | — |  |  |  | — |
|  | $ | (4,719 | ) |  | $ | (36,411 | ) |  | $ | (28,989 | )
( 1 ) The non-current deferred tax asset has been reduced by the uncertain tax benefit of $0.1 million in accordance with ASU 2013 - 11, Income Taxes. During 2017, the Company changed its intention to reinvest certain undistributed earnings of Ormat Systems Ltd., a wholly owned subsidiary in Israel. The decision was made to distribute $396.0 million, of which $300.0 million was received in December 2017 and the remaining $96.0 million is expected to be received during 2018. The Company recorded the tax impact of this change in the income tax provision, notable a withholding tax of approximately $58.3 million. The Company recorded a foreign tax credit deferred tax asset for the withholding tax and an associated valuation allowance based on the Company’s ability to utilize foreign tax credits in the U.S. prior to the expiration period starting in 2027. The total amount of undistributed earnings of all other foreign subsidiaries for income tax purposes was approximately $401 million at December 31, 2017. It is the Company’s intention to reinvest undistributed earnings of its foreign subsidiaries and thereby indefinitely postpone their remittance. Accordingly, no provision has been made for foreign withholding taxes which may become payable if undistributed earnings of foreign subsidiaries were paid as dividends to the Company. The U.S. tax associated with the undistributed earnings were included as part of the Transition Tax. The additional taxes on that portion of undistributed earnings which is available for dividends are not practicably determinable. Uncertain tax positions We are subject to income taxes in the U.S. (federal and state) and numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, the re are many transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which additional taxes will be due. These reserves are established when we believe that certain positions might be challenged despite. We adjust these reserves in light of changing facts and circumstances, such as the outcome of tax audits. The provision for income taxes includes the impact of reserve positions and changes to reserves that are considered probable. At December 31, 2017 and 2016, there are $8.9 million and $6.4 million of unrecognized tax benefits that if recognized would affect the annual effective tax rate. Interest and penalties assessed by tax ing authorities on an underpayment of income taxes are included as a component of income tax provision in the consolidated statements of operations and comprehensive income. A reconciliation of our unrecognized tax benefits is as follows:
|  | Year Ended December 31, |
|  | 2017 (As restated) |  |  | 2016 |  |  | 2015 |
|  | (Dollars in thousands) |
Balance at beginning of year |  | $ | 4,609 |  |  | $ | 7,781 |  |  | $ | 4,477 |
Additions based on tax positions taken in prior years |  |  | 5 |  |  |  | 675 |  |  |  | (1 | )
Additions based on tax positions taken in the current year |  |  | 2,580 |  |  |  | 1,532 |  |  |  | 4,619 |
Reduction based on tax positions taken in prior years |  |  | (837 | ) |  |  | (5,379 | ) |  |  | (1,314 | )
Balance at end of year |  | $ | 6,357 |  |  | $ | 4,609 |  |  | $ | 7,781 |
The Company and its U.S. subsidiaries file consolidated income tax returns for federal and state purposes. As of December 31, 2017, the Company has not been subject to U.S. federal or state income tax examinations. The Company remains open to examination by the Internal Revenue Service for the years 2000 - 2017 and by local state jurisdictions for the years 2002 - 2017. These examinations may lead to ordinary course adjustments or proposed adjustments to our taxes or our net operating losses with respect to years under examination as well as subsequent periods. The reduction of $0.8 million, $5.4 million and $1.3 million in 2017, 2016 and 2015, respectively, was due to the statute of limitations expiration on certain tax positions as well as Ormat System's tax settlement as detailed below. The Company ’s foreign subsidiaries remain open to examination by the local income tax authorities in the following countries for the years indicated:
Israe l | 2015 | — | 2017
Kenya | 2012 | — | 2017
Guatemala | 2013 | — | 2017
Honduras | 2012 | — | 2017
Guadeloupe | 2015 | — | 2017
Philippines | 2010 | — | 2017
New Zealand | 2012 | — | 2017
Management believes that the liability for unrecognized tax benefits is adequate for all open tax years based on its assessment of many factors, including among others, past experience and interpretations of local income tax regulations. This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events. As a result, it is possible that federal, state and foreign tax examinations will result in assessments in future periods. To the extent any such assessments occur, the Company will adjust its liability for unrecognized tax benefits . Tax benefits in the U.S . The U.S. government encourages production of electricity from geothermal resources through certain tax subsidies under the ARRA which has been extended by the Consolidated Appropriations Act, 2016 (CAA). On February 9, 2018, the Bipartisan Budget Act of 2018 was enacted extending the production tax credit (PTC) and investment tax credit (ITC) in lieu of PTCs for geothermal projects that begin construction before 2018. Geothermal projects that begin construction before 2018 and meet certain other “begun construction” rules qualify for 2.4 cents per kilowatt hour of PTCs for their first 10 -years of operations; alternatively, the owner of the project may elect a 30% ITC in lieu of PTCs. For projects that do not satisfy the begun construction rules, the ITC is reduced to 10%. The owner of the power plant must choose between the PTC and the 30% ITC described above. In either case, under current tax rules for tax credits generated before January 1, 2018, any unused tax credit has a 1 -year carry back and a 20 -year carry forward. Whether the Company claims the PTC or the ITC, for assets acquired and placed in service after September 27, 2017, the Company is permitted to fully expense the cost of qualified property (“bonus depreciation”). In later years, the first -year bonus depreciation deduction phases down, as follows: ● 80% for property placed in service after Dec. 31, 2022 and before Jan. 1, 2024 . ● 60% for property placed in service after Dec. 31, 2023 and before Jan. 1, 2025 . ● 40% for property placed in service after Dec. 31, 2024 and before Jan. 1, 2026 . ● 20% for property placed in service after Dec. 31, 2025 and before Jan. 1, 2027 . The Company could also elect in lieu of bonus deprecation to depreciate most of the plant for tax purposes over five years on an accelerated basis, meaning that more of the cost may be deducted in the first few years than during the remainder of the depreciation period. If the Company claims the ITC, the Company ’s “tax base” in the plant that it can recover through bonus or accelerated depreciation (if elected) must be reduced by half of the ITC. If the Company claims the PTC, there is no reduction in the tax basis for depreciation. Companies that place qualifying renewable energy facilities in service, during 2010, 2011, or 2012, or that begin construction of qualifying renewable energy facilities during 2013, 2014, 2015, or 2016 and place them in service by December 31, 2017, may choose to apply for a cash grant from the U.S. Department of the Treasury (“U.S. Treasury”) in an amount equal to the ITC. Likewise, the tax base for depreciation will be reduced by 50% of the cash grant received. Under the ARRA revised by the CAA, the U.S. Treasury is instructed to pay the cash grant within 60 governmental business days of the application or the date on which the qualifying facility is placed in service . Income taxes related to foreign operations Guatemala — The enacted tax rate is 25%. Orzunil, a wholly owned subsidiary, was granted a benefit under a law which promotes development of renewable power sources. The law allows Orzunil to reduce the investment made in its geothermal power plant from income tax payable, which reduces the effective tax rate to zero. Ortitlan, another wholly owned subsidiary, was granted a tax exemption for a period of ten years ending August 2017. Starting August 2017, Ortitlan pays income tax of 7% on its Electricity revenues. The effect of the tax exemption in the years ended December 31, 2017, 2016, and 2015 is $2.6 million, $3.3 million, and $3.6 million, respectively ( $0.05, $0.07, and $0.08 per share of common stock, respectively). Israel — The Company’s operations in Israel through its wholly owned Israeli subsidiary, Ormat Systems Ltd. (“Ormat Systems”), are taxed at the regular corporate tax rate of 26.5% in 2015, 25% in 2016, 24% in 2017 and 23% in 2018 and thereafter. Ormat Systems received “Benefited Enterprise” status under Israel’s Law for Encouragement of Capital Investments, 1959 (the “Investment Law”), with respect to two of its investment programs. In January 2011, new legislation amending the Investment Law was enacted. Under the new legislation, a uniform rate of corporate tax would apply to all qualified income of certain industrial companies, as opposed to the current law’s incentives that are limited to income from a “Benefited Enterprise” during their benefits period. According to the amendment, the uniform tax rate applicable to the zone where the production facilities of Ormat Systems are located would be 16% in 2014 and thereafter. Ormat Systems decided to irrevocably comply with the new law starting in 2011. In the event of distribution of a cash dividend out of retained earnings which were tax exempt due to prior benefits, Ormat Systems would have to pay tax in respect of the amount distributed. Since the exemptions are contingent upon nondistribution of divid ends and since upon liquidation the Company will have to pay a 25% tax on exempt income, Ormat Systems recorded deferred tax liability at the rate of 25% in respect of the tax exempt income in 2004 - 2008. In the event that Ormat Systems fails to comply with the program terms, the tax benefits may be canceled and it may be required to refund the amount of the benefits utilized, in whole or in part, with the addition of linkage differences and interest. Ormat Systems tax assessment for fiscal years 2010 - 2014 was finalized and settled in January 2017. The settlement resulted in no impact to income statement due to release of the related uncertain tax position liability. Kenya - The Company’s operations in Kenya are taxed at the rate of 37.5%. On September 11, 2015, Kenya's Income Tax Act was amended pursuant to certain provisions of the recently adopted Finance Act, 2015. Among other matters, these amendments retain the enhanced investment deduction of 150% under Section 17B of the Income Tax Act, extend the period for deduction of tax losses from 5 years to 10 years under Sections 15 ( 4 ) and 15 ( 5 ) of the Income Tax Act, and amend the effective date from January 1, 2016 to January 1, 2015 under Sections 15 ( 4 ) and 15 ( 5 ) of the Income Tax Act. Previously, the Company had a valuation allowance for the additional 50% investment deduction reducing its deferred tax asset in Kenya as the utilization of the related tax losses was not probable within the original five year carryforward period. As a result of the change in legislation and the expected continued profitability during the extended carryforward period, the Company expects that it will be able to fully utilize the carryforward tax losses within the ten year period and as such released the valuation allowance in Kenya resulting in a $49.4 million of tax benefits in the year ended December 31, 2015. As previously reported by the Company, the Kenya Revenue Authority (“ KRA”) conducted an audit related to the Company’s operations in Kenya for fiscal years 2012 and 2013. On June 20, 2017, the Company has signed a Settlement Agreement with the KRA under which it paid approximately $2.6 million in principal for full settlement of all claims raised by the KRA during the audit. The principal amount that was paid in June 2017 was recorded as an addition to the cost of the power plants and is qualified for investment deduction at 150% under the terms of the settlement agreement. Additionally, as per the Settlement Agreement, the Company submitted a request for waiver on the applied interest in the amount of approximately $1.2 million, for which the Company recorded a provision to cover such a potential exposure. Guadeloupe - The Company’s operations in Guadeloupe are taxed at a rate of 34.43% in 2017, a rate of 28% up to a taxable income of €0.5 million and 33.3% on taxable income exceeding €0.5 million in 2018, a rate of 28% up to taxable income of €0.5 million and 31% on taxable income higher than €0.5 million in 2019, a rate of 28% in 2020, 26.5% in 2021 and 25% in 2022. Honduras - The Company’s operations in Honduras are exempt from income taxes for the first ten years starting at the commercial operation date of the power plant. Other significant foreign countries — The Company’s operations in New Zealand are taxed at the rate of 28% in 2017 and 2016. Income taxes related to U.S. tax legislation commonly referred to as the Tax Cuts and Jobs Act On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “ Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, ( 1 ) reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; ( 2 ) requiring companies to include in taxable income a one -time tax on certain unrepatriated earnings of foreign subsidiaries; ( 3 ) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; ( 4 ) a new provision designed to tax global intangible low-taxed income (GILTI) ; ( 5 ) eliminating the corporate alternative minimum tax (AMT) and changing how existing AMT credits can be realized; ( 6 ) creating the base erosion anti-abuse tax (BEAT), a new minimum tax; ( 7 ) creating a new limitation on deductible interest expense; and ( 8 ) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017. The SEC staff issued SAB 118, which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provision of the tax laws that were in effect immediately before the enactment of the Tax Act. Our accounting for the following elements of the Tax Act is incomplete and the Company may materially adjust these amounts for related administrative guidance, notices, implementing regulations, potential legislative amendments and interpretations as the new tax law evolves. However, we are able to make reasonable estimates of certain effects and, therefore, recorded provisional adjustments as follows: Reduction in U.S. federal corporate tax rate: The Tax Act reduces the corporate tax rate of 35 percent to 21 percent, effective January 1, 2018. Consequently, we have recorded a provision increase related to deferred taxes of $22.6 million with a corresponding net adjustment to deferred income tax benefit for the year ended December 31, 2017. While we are able to make a reasonable estimate of the impact of the reduction in corporate rate, it may be affected by other analyses related to the Tax Act, including, but not limited to, our calculation of deemed repatriation of deferred foreign income and the state tax effect of adjustments made to federal temporary differences. Deemed Repatriation Transition Tax: The Deemed Repatriation Tax (Transition Tax) is a one -time tax on previously untaxed accumulated and current earnings and profits (E&P) of certain foreign subsidiaries. To determine the amount of the Transition Tax, we must determine, in addition to other factors, the amount of post- 1986 E&P of the relevant subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings. We are able to make a reasonable estimate of the Transition Tax and recorded a provisional Transition Tax income inclusion of $71.9 million. The Company has sufficient NOLs to offset such tax inclusions to taxable income , therefore there is no resulting obligation due for such amount. We are continuing to gather additional information to refine the amount computed for Transition Tax. Global intangible low taxed income (GILTI): The Tax Act creates a new requirement that certain income (i.e. GILTI) earned by controlled foreign corporations (CFCs) must be included currently in gross income of the CFC ’s U.S. Shareholder. GILTI is the excess of the shareholder’s “net CFC tested income” over the net deemed tangible income return, which is currently defined as the excess of ( 1 ) 10 percent of the aggregate of the U.S. shareholder’s pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder over ( 2 ) the amount of certain interest expense taken into account in the determination of net CFC-texted income. Because of the complexity of the new GILTI rules, we are continuing to evaluate this provision of the Tax Act and the application of ASC 740. As discussed further below, for valuation allowance purposes, GILTI inclusions were determined using estimates of book income, but the Company will calculate the impact of GILTI as a period cost. Valuation Allowance: The Company must assess whether its valuation allowance analyses are affected by various aspects of the Tax Act (e.g. deemed repatriation of deferred foreign income, GILTI inclusions, new categories of FTCs, interest expense limitations). Since, as discussed herein, the Company has recorded provisional amounts related to certain portions of the Tax Act, any corresponding determination of the need for or change in a valuation allowance is provisional . Uncertain Tax Positions: The Company must assess whether its uncertain tax positions a nalyses are affected by various aspects of the Tax Act (e.g. deemed repatriation of deferred foreign income, GILTI inclusions, new categories of FTCs, interest expense limitations). Since, as discussed herein, the Company has recorded provisional amounts related to certain portions of the Tax Act, any corresponding determination of the need for or change in an uncertain tax position is provisional .

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration