Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.20.4
Income Taxes
12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes
9. INCOME TAXES
Income before income tax expense (benefit) and equity in 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):
2020 2019 2018
United States $ 20,132  $ 41,398  $ 33,563 
Foreign 4,744  6,182  56,558 
Eliminations and other 1,516  1,517  1,568 
$ 26,392  $ 49,097  $ 91,689 
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):
2020 2019 2018
Current:
State $ 2,301  $ 739  $ 253 
Federal 15,823  (244) 20,776 
Foreign 1,151  1,165  2,899 
19,275  1,660  23,928 
Deferred:
State (254) 404  (3,001)
Federal (25,050) 7,765  (12,512)
Foreign (1,093) —  — 
(26,397) 8,169  (15,513)
$ (7,122) $ 9,829  $ 8,415 
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,:
2020 2019 2018
Statutory rate 21.0  % 21.0  % 21.0  %
Income subject to tonnage tax (7.3) % (2.3) % (1.3) %
U.S. federal income tax statutory changes (49.1) % —  % —  %
Non-deductible expenses 3.4  % 1.6  % 0.2  %
Noncontrolling interests —  % (3.1) % (5.7) %
Foreign earnings not subject to U.S. income tax (4.8) % (4.1) % (16.2) %
Foreign taxes not creditable against U.S. income tax 0.2  % 1.4  % 3.2  %
Subpart F income 3.0  % 1.5  % 12.1  %
State taxes 5.9  % 2.0  % (3.1) %
Share award plans 1.6  % 0.6  % (0.3) %
Other (0.9) % 1.4  % (0.7) %
(27.0) % 20.0  % 9.2  %
On March 27, 2020, the U.S. Congress passed and the President signed the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") into law to address the economic fallout of the 2020 COVID-19 pandemic. One provision of the CARES Act increases the tax deduction for net operating losses from 80% to 100% for 2018 through 2020, allows net operating losses generated in 2018 through 2020 to be carried back up to five years and increases the deductible interest expense limit from 30% to 50% of taxable EBITDA. As a result of these statutory changes, during the twelve months ended December 31, 2020, the Company determined it will be able to carry its 2019 net operating losses back to tax years when the statutory tax rate was 35% resulting in an income tax benefit of $13.0 million, which is included in income tax expense (benefit) in the accompanying consolidated statements of income.
As of December 31, 2020, $32.7 million of income tax receivables are included in other receivables in the accompanying condensed consolidated balance sheets.
The components of the net deferred income tax liabilities for the years ended December 31, were as follows (in thousands):
2020 2019
Deferred tax liabilities:
Property and equipment $ 114,577  $ 121,840 
Long-term debt 10,905  15,395 
Gains on marketable securities 340  459 
Investments in 50% or less owned companies 774  1,541 
Intangible assets 562  706 
Deductible goodwill 1,659  1,002 
Total deferred tax liabilities 128,817  140,943 
Deferred tax assets:
Federal net operating loss carryforwards 2,022  21,385 
State net operating loss carryforwards and other temporary differences 5,804  4,922 
Capital loss carryforwards 5,199  5,192 
Share award plans 3,853  3,686 
Other 5,870  4,314 
Total deferred tax assets 22,748  39,499 
Valuation allowance (4,846) (4,217)
Net deferred tax assets 17,902  35,282 
Net deferred tax liabilities $ 110,915  $ 105,661 
During the year ended December 31, 2020, the Company increased its valuation allowance for state net operating loss carryforwards from $4.2 million to $4.8 million. The Company's capital loss carryforwards expire in 2024.