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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | 13. Income Taxes The components of income from continuing operations before provision for income taxes consisted of the following (dollars in thousands):
|  | Year Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Domestic |  | $ | 536,869 |  |  | $ | 600,939 |  |  | $ | 537,271 |
Foreign |  |  | 343,857 |  |  |  | 278,791 |  |  |  | 239,991 |
|  | $ | 880,726 |  |  | $ | 879,730 |  |  | $ | 777,262 |
Our tax provision (benefit) consisted of the following (dollars in thousands):
|  | Year Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Federal: |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 172,380 |  |  | $ | 215,703 |  |  | $ | 173,110 |
Deferred |  |  | 27,463 |  |  |  | 1,559 |  |  |  | (333 | )
|  |  | 199,843 |  |  |  | 217,262 |  |  |  | 172,777 |
State: |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 20,946 |  |  |  | 24,476 |  |  |  | 18,876 |
Deferred |  |  | 375 |  |  |  | 861 |  |  |  | 669 |
|  |  | 21,321 |  |  |  | 25,337 |  |  |  | 19,545 |
Foreign: |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 94,909 |  |  |  | 91,048 |  |  |  | 87,769 |
Deferred |  |  | (19,411 | ) |  |  | (12,794 | ) |  |  | (16,332 | )
|  |  | 75,498 |  |  |  | 78,254 |  |  |  | 71,437 |
|  | $ | 296,662 |  |  | $ | 320,853 |  |  | $ | 263,759 |
The following is a reconciliation stated as a percentage of pre-tax income of the U.S. statutory federal income tax rate to our effective tax rate:
|  | Year Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Federal statutory tax rate |  |  | 35 | % |  |  | 35 | % |  |  | 35 | %
State taxes, net of federal benefit |  |  | 2 |  |  |  | 3 |  |  |  | 3 |
Change in valuation allowance |  |  | 2 |  |  |  | (1 | ) |  |  | (1 | )
Reserves for uncertain tax positions |  |  | — |  |  |  | 1 |  |  |  | (2 | )
Non-deductible expenses |  |  | — |  |  |  | 1 |  |  |  | 1 |
Foreign earnings repatriation |  |  | — |  |  |  | — |  |  |  | 1 |
Non-controlling interests |  |  | — |  |  |  | — |  |  |  | (1 | )
Credits and exemptions |  |  | (2 | ) |  |  | (2 | ) |  |  | (1 | )
Foreign rate differential |  |  | (2 | ) |  |  | (2 | ) |  |  | (2 | )
Other |  |  | (1 | ) |  |  | 1 |  |  |  | 1 |
Effective tax rate |  |  | 34 | % |  |  | 36 | % |  |  | 34 | %
During the years ended December 31, 2016, 2015 and 2014, respectively, we recorded a $0.4 million, $3.2 million and $2.2 million income tax benefit in connection with stock options exercised. Of this income tax benefit, $2.3 million and $1.2 million was charged directly to additional paid-in capital within the equity section of the accompanying consolidated balance sheets in 2015 and 2014, respectively. With our adoption of ASU 2016-09 in the third quarter of 2016, which has been applied on a prospective basis to settlements of share-based payment awards occurring on or after January 1, 2016, excess tax benefits for 2016 have been recognized as income tax benefits in the income statement rather than to additional paid-in capital. Cumulative tax effects of temporary differences are shown below at December 31, 2016 and 2015 (dollars in thousands):
|  | December 31, |
|  | 2016 |  |  | 2015 |
Asset (Liability) |  |  |  |  |  |  |  |
Bonus and deferred compensation |  | $ | 265,043 |  |  | $ | 250,600 |
Bad debt and other reserves |  |  | 75,620 |  |  |  | 59,257 |
Net operating losses (NOLs) and state tax credits |  |  | 66,499 |  |  |  | 57,027 |
Foreign tax credits |  |  | 53,976 |  |  |  | 53,976 |
Pension obligation |  |  | 29,382 |  |  |  | 26,251 |
Unconsolidated affiliates |  |  | 28,107 |  |  |  | 23,981 |
Derivative financial instruments |  |  | 7,308 |  |  |  | 8,583 |
Investments |  |  | 7,142 |  |  |  | 6,395 |
Property and equipment |  |  | (87,679 | ) |  |  | (80,925 | )
Capitalized costs and intangibles |  |  | (307,301 | ) |  |  | (283,156 | )
All other |  |  | 2,049 |  |  |  | 4,574 |
Net deferred tax assets before valuation allowance |  |  | 140,146 |  |  |  | 126,563 |
Valuation allowance |  |  | (105,541 | ) |  |  | (91,672 | )
Net deferred tax assets |  | $ | 34,605 |  |  | $ | 34,891 |
As of December 31, 2016, we had U.S. federal NOLs of approximately $39.1 million, translating to a deferred tax asset before valuation allowance of $13.7 million, which will begin to expire in 2023. As of December 31, 2016, there were also deferred tax assets before valuation allowances of approximately $2.9 million related to state NOLs as well as $48.6 million related to foreign NOLs. The state and foreign NOLs both begin to expire in 2017, but the majority carry forward indefinitely. The utilization of NOLs may be subject to certain limitations under U.S. federal, state and foreign laws. In addition, as of December 31, 2016, we had $54.0 million of foreign income tax credits that can be utilized to offset U.S. federal income taxes on foreign-sourced earnings. These credits are scheduled to expire in 2023. We determined that as of December 31, 2016, $105.5 million of deferred tax assets do not satisfy the realization criteria set forth in Topic 740. Accordingly, a valuation allowance has been recorded for this amount. If released, the entire amount would result in a benefit to continuing operations. During the year ended December 31, 2016, our valuation allowance increased by approximately $13.9 million. This resulted from establishment of valuation allowances of $16.9 million related to non-U.S. net operating losses and other foreign assets and $0.9 million related to U.S. net operating losses and other U.S. assets. These increases were partially offset by $2.8 million of non-U.S. net operating loss utilization, $0.6 million of U.S. net operating loss utilization and $0.5 million of foreign currency translation. We believe it is more likely than not that future operations will generate sufficient taxable income to realize the benefit of the deferred tax assets recorded net of these valuation allowances. Our foreign subsidiaries have accumulated $1.9 billion of undistributed earnings for which we have not recorded a deferred tax liability. Although tax liabilities might result from dividends being paid out of these earnings, or as a result of a sale or liquidation of non-U.S. subsidiaries, these earnings are permanently reinvested outside of the U.S. and we do not have any plans to repatriate them or to sell or liquidate any of our non-U.S. subsidiaries. To the extent that we are able to repatriate the earnings in a tax efficient manner, we would be required to accrue and pay U.S. taxes to repatriate these funds, net of foreign tax credits. Determining our tax liability upon repatriation is not practicable. Cash and cash equivalents owned by non-U.S. subsidiaries totaled $408.9 million at December 31, 2016. The total amount of gross unrecognized tax benefits was approximately $94.9 million and $92.5 million as of December 31, 2016 and 2015, respectively. The total amount of unrecognized tax benefits that would affect our effective tax rate, if recognized, is $39.1 million ($35.7 million, net of federal benefit received from state positions) and $43.8 million ($40.7 million, net of federal benefit received from state positions) as of December 31, 2016 and 2015, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2016 and 2015 is as follows (dollars in thousands):
|  | Year Ended December 31, |
|  | 2016 |  |  | 2015 |
Beginning balance, unrecognized tax benefits |  | $ | (92,538 | ) |  | $ | (66,984 | )
Gross increases—tax positions in prior period |  |  | (514 | ) |  |  | (17,545 | )
Gross decreases—tax positions in prior period |  |  | 358 |  |  |  | 92 |
Gross increases—current-period tax positions |  |  | (4,237 | ) |  |  | (8,792 | )
Decreases relating to settlements |  |  | 2,541 |  |  |  | — |
Reductions as a result of lapse of statute of limitations |  |  | 235 |  |  |  | 688 |
Foreign exchange movement |  |  | (760 | ) |  |  | 3 |
Ending balance, unrecognized tax benefits |  | $ | (94,915 | ) |  | $ | (92,538 | )
We believe it is reasonably possible that between $61.6 million and $63.1 million of gross unrecognized tax benefits will be settled during the next twelve months due to filing amended returns and settling ongoing exams. Our continuing practice is to recognize potential accrued interest and/or penalties related to income tax matters within income tax expense. During the years ended December 31, 2016, 2015 and 2014, we accrued an additional $2.9 million, $3.2 million and $3.0 million, respectively, in interest and penalties associated with uncertain tax positions. During the year ended December 31, 2014, we reversed $10.5 million of accrued interest and penalties related to settled positions. As of December 31, 2016 and 2015, we have recognized a liability for interest and penalties of $31.7 million ($24.3 million, net of related federal benefit received from interest expense) and $28.8 million ($22.1 million, net of related federal benefit received from interest expense), respectively. We conduct business globally and, as a result, one or more of our subsidiaries files income tax returns in the U.S. federal jurisdiction and in multiple state, local and foreign jurisdictions. We are no longer open to assessment by the U.S. Internal Revenue Service for years prior to 2005. With limited exception, our significant state and foreign tax jurisdictions are no longer subject to audit by the various tax authorities for tax years prior to 2007.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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