Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.8.0.1
Income Taxes
12 Months Ended
Dec. 31, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
8.
INCOME TAXES
Income (loss) before income tax expense (benefit) and equity in earnings (losses) of 50% or less owned companies derived from U.S. and foreign companies for the years ended December 31 were as follows (in thousands):
 
2017
 
2016
 
2015
United States
$
28,546

 
$
(93,145
)
 
$
(1,785
)
Foreign
4,748

 
(1,105
)
 
(934
)
Eliminations and other
1,911

 
2,014

 
968

 
$
35,205

 
$
(92,236
)
 
$
(1,751
)

As of December 31, 2017, cumulative undistributed net losses of foreign subsidiaries included in the Company’s consolidated retained earnings were $87.8 million.
The Company files a consolidated U.S. federal tax return. The components of income tax expense (benefit) for the years ended December 31 were as follows (in thousands):
 
2017
 
2016
 
2015
Current:
 
 
 
 
 
State
$
1,136

 
$
4,830

 
$
1,772

Federal
(17,181
)
 
6,998

 
19,518

Foreign
333

 
379

 
63

 
(15,712
)
 
12,207

 
21,353

Deferred:
 
 
 
 
 
State
12

 
(2,280
)
 
(1,674
)
Federal
(51,489
)
 
(46,652
)
 
(19,429
)
 
(51,477
)
 
(48,932
)
 
(21,103
)
 
$
(67,189
)
 
$
(36,725
)
 
$
250


The following table reconciles the difference between the statutory federal income tax rate for the Company and the effective income tax rate for the years ended December 31:
 
2017
 
2016
 
2015
Statutory rate
35.0
 %
 
35.0
 %
 
35.0
 %
Income subject to tonnage tax
(5.9
)%
 
 %
 
 %
Dorian distribution
22.8
 %
 
 %
 
 %
Reversal of uncertain tax position
(28.7
)%
 
 %
 
 %
U.S. federal income tax statutory changes
(190.2
)%
 
 %
 
 %
Non-deductible expenses
0.8
 %
 
1.0
 %
 
8.2
 %
Noncontrolling interests
(22.4
)%
 
6.3
 %
 
11.4
 %
Losses of foreign subsidiaries not benefited
(6.6
)%
 
(1.4
)%
 
(92.8
)%
State taxes
1.2
 %
 
(0.9
)%
 
29.9
 %
Share award plans
2.0
 %
 
 %
 
(5.5
)%
Other
1.1
 %
 
(0.2
)%
 
(0.5
)%
 
(190.9
)%
 
39.8
 %
 
(14.3
)%

On December 22, 2017, the U.S. 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, reducing the U.S. federal corporate tax rate from 35% to 21%, eliminating or capping certain deductions, imposing a mandatory one-time tax on accumulated earnings in foreign subsidiaries, introducing new tax regimes and changing how foreign earnings are subject to U.S. taxation. The statutory corporate tax rate reduction is effective for tax years beginning on or after January 1, 2018. During the fourth quarter, the Company recorded a net income tax benefit of $66.9 million as a consequence of reducing its net deferred tax liabilities to reflect the change in the statutory tax rate.
The Company records an additional income tax benefit or expense based on the difference between the fair market value of share awards at the time of grant and the fair market value at the time of vesting or exercise. For the years ended December 31, 2016 and 2015, an additional net income tax expense was recorded in stockholders’ equity of $2.3 million and $0.1 million, respectively.
During the year ended December 31, 2013, the Company provided for income taxes of $10.1 million relating to potential tax exposures surrounding the spin-off of Era Group Inc. (“Era Group”) by means of a dividend to SEACOR’s shareholders of all the issued and outstanding common stock of Era Group (the “Era Spin-off”). During the year ended December 31, 2017, the Company reversed this provision as the statute of limitations expired. In addition, the Company reversed accumulated accrued interest of $2.0 million related to this provision, included as a reduction in interest expense in the accompanying consolidated statements of income (loss).
The components of the net deferred income tax liabilities for the years ended December 31 were as follows (in thousands):
 
2017
 
2016
Deferred tax liabilities:
 
 
 
Property and equipment
$
92,127

 
$
153,214

Long-term debt
22,519

 
44,782

Unremitted earnings of foreign subsidiaries

 
179

Investments in 50% or less owned companies
811

 
1,346

Intangible assets
1,006

 
1,908

Other
96

 
138

Total deferred tax liabilities
116,559

 
201,567

Deferred tax assets:
 
 
 
Share award plans
3,476

 
7,952

Losses on marketable securities
5,986

 
17,758

Deductible goodwill
312

 
1,611

Debt and equity issuance costs
406

 
7,638

Other
11,652

 
12,767

Total deferred tax assets
21,832

 
47,726

Valuation allowance
(6,695
)
 
(3,600
)
Net deferred tax assets
15,137

 
44,126

Net deferred tax liabilities
$
101,422

 
$
157,441


During the year ended December 31, 2017, the Company increased its valuation allowance for state net operating loss carryforwards from $3.6 million to $6.7 million.