Income Taxes (Notes)

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective income tax rate was a benefit of 380.0% for the three months ended June 30, 2020 as compared to an expense of 23.2% for the three months ended June 30, 2019. The effective income tax rate for the three months ended June 30, 2020 was a benefit and below the statutory rate of 21.0% primarily due to the income tax rate benefit resulting from the carryback of additional federal net operating loss ("NOL") to taxable years that were taxed at the U.S. corporate tax rate of 35.0% as permitted under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), partially offset by the reduction in the Internal Revenue Code Section 199 ("Section 199") domestic manufacturing deduction, as a result of the NOL carryback, the depletion deduction, the foreign earnings rate differential and the state income tax benefit. The effective income tax rate for the three months ended June 30, 2019 was above the statutory rate of 21.0% primarily due to state taxes.

The effective income tax rate was a benefit of 49.6% for the six months ended June 30, 2020 as compared to an expense of 24.9% for the six months ended June 30, 2019. The effective income tax rate for the six months ended June 30, 2020 was a benefit and below the statutory rate of 21.0% primarily due to the income tax rate benefit resulting from the carryback of federal NOL to taxable years that were taxed at the U.S. corporate tax rate of 35.0% as permitted under the CARES Act, partially offset by the reduction in the Section 199 domestic manufacturing deduction as a result of the NOL carryback, the depletion deduction, the foreign earnings rate differential and the state income tax benefit. The effective income tax rate for the six months ended June 30, 2019 was above the statutory rate of 21.0% primarily due to state taxes and the tax effect related to charges associated with the write-off of certain assets.

On March 27, 2020, the CARES Act was enacted and signed into law. The CARES Act, among other things, permits any federal NOL generated in 2018, 2019 and 2020 to be carried back to each of the five tax years preceding the tax year of the federal NOL to fully offset taxable income to generate a refund of previously paid income taxes. However, any such federal NOL not carried back can be carried forward to fully offset taxable income, but only for the taxable years beginning before January 1, 2021, after which, the federal NOL deduction limitation not to exceed 80.0% of taxable income under the U.S. Tax Cuts and Jobs Act (the "Tax Act") will be reinstated. Federal NOLs generated in 2018, 2019 and 2020 measured at the current U.S. corporate tax rate of 21.0% that are carried back to taxable years prior to the Tax Act to fully offset taxable income taxed at the U.S. corporate tax rate of 35.0% result in an income tax rate benefit. At the end of 2019, the Company generated a federal NOL primarily due to bonus tax depreciation from the Company's investment in LACC, LLC ("LACC"), which is accounted for as an equity method investment. This federal NOL was increased to account for the disallowed interest deduction which originated in 2019 that is no longer disallowed due to the increase in the business interest expense deduction limitation from 30.0% to 50.0% of adjusted taxable income for tax years 2019 and 2020 as permitted under the CARES Act. For the three and six months ended June 30, 2020, the carryback of the federal NOL resulted in a net tax benefit of $6 and $68, respectively, for the Company, primarily from the tax rate difference, partially offset by the reduction in the Section 199 domestic manufacturing deduction.