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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Taxes [Abstract] |
Income Taxes | 15. INCOME TAXES As discussed in Note 2, the Company began operating in compliance with REIT requirements for federal income tax purposes effective January 1, 2016. As a REIT, the Company must distribute at least 90 percent of its taxable income (including dividends paid to it by its TRSs) except to the extent offset by NOLs. In addition, the Company must meet a number of other organizational and operational requirements. It is management's intention to adhere to these requirements and maintain the Company's REIT status. Most states where SBA operates conform to the federal rules recognizing REITs. Certain subsidiaries have made an election with the Company to be treated as TRSs in conjunction with the Company's REIT election; the TRS elections permit SBA to engage in certain business activities in which the REIT may not engage directly. A TRS is subject to federal and state income taxes on the income from these activities. A provision for taxes of the TRSs and of foreign branches of the REIT is included in its consolidated financial statements. Income before provision for income taxes by geographic area is as follows:
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  | For the year ended December 31,
﻿ |  | 2018 |  | 2017 |  | 2016
﻿ |  |  |  |  |  |  |  |  |
﻿ |  | (in thousands)
﻿Domestic |  | $ | 99,203 |  | $ | 73,405 |  | $ | (28,671)
﻿Foreign |  |  | (47,519) |  |  | 43,486 |  |  | 115,974
﻿Total |  | $ | 51,684 |  | $ | 116,891 |  | $ | 87,303
﻿ The provision for income taxes consists of the following components:
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  | For the year ended December 31,
﻿ |  | 2018 |  | 2017 |  | 2016
﻿ |  |  |  |  |  |  |  |  |
﻿ |  | (in thousands)
﻿Current provision: |  |  |  |  |  |  |  |  |
﻿State |  | $ | 5,764 |  | $ | 5,513 |  | $ | 1,535
﻿Foreign |  |  | 13,756 |  |  | 11,681 |  |  | 8,121
﻿Total current |  |  | 19,520 |  |  | 17,194 |  |  | 9,656
﻿ |  |  |  |  |  |  |  |  |
﻿Deferred provision (benefit) for taxes: |  |  |  |  |  |  |  |  |
﻿Federal |  |  | (9,463) |  |  | 18,736 |  |  | 170,177
﻿State |  |  | (1,412) |  |  | (241) |  |  | 22,992
﻿Foreign |  |  | (16,673) |  |  | 9,155 |  |  | 30,425
﻿Change in valuation allowance |  |  | 12,261 |  |  | (31,607) |  |  | (222,185)
﻿Total deferred |  |  | (15,287) |  |  | (3,957) |  |  | 1,409
﻿Total provision for income taxes |  | $ | 4,233 |  | $ | 13,237 |  | $ | 11,065
A reco nciliation of the provision for income taxes at the statutory U.S. Federal tax rate (21% for 2018 and 35% for 2017 and 2016) and the effective income tax rate is as follows: ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |
﻿ |  | For the year ended December 31,
﻿ |  | 2018 |  | 2017 |  | 2016
﻿ |  |  |  |  |  |  |  |  |
﻿ |  | (in thousands)
﻿Statutory federal expense |  | $ | 10,854 |  | $ | 40,912 |  | $ | 30,555
﻿Rate and permanent differences on non-U.S. earnings (1) |  |  | 3,620 |  |  | 3,690 |  |  | (4,739)
﻿State and local tax expense |  |  | 4,824 |  |  | 5,415 |  |  | 3,941
﻿REIT adjustment |  |  | (22,241) |  |  | (34,346) |  |  | 205,317
﻿Permanent differences |  |  | 437 |  |  | (1,365) |  |  | (3,577)
﻿Tax Act impact on deferred taxes |  |  | (6,040) |  |  | 31,547 |  |  | —
﻿Other |  |  | 518 |  |  | (1,009) |  |  | 1,753
﻿Valuation allowance |  |  | 12,261 |  |  | (31,607) |  |  | (222,185)
﻿Provision for income taxes |  | $ | 4,233 |  | $ | 13,237 |  | $ | 11,065
﻿
| (1) |  | This item includes the effect of foreign exchange rate changes which were previously shown on a separate line.
The components of the net deferred income tax asset (liability) accounts are as follows:
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  | As of December 31,
﻿ |  |  |  |  | 2018 |  |  | 2017
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  | (in thousands)
﻿Noncurrent deferred tax assets: |  |  |  |  |  |  |  |  |
﻿Net operating losses |  |  |  |  | $ | 63,622 |  | $ | 65,257
﻿Property, equipment, and intangible basis differences |  |  |  |  |  | 4,793 |  |  | 3,038
﻿Accrued liabilities |  |  |  |  |  | 9,659 |  |  | 11,933
﻿Non-cash compensation |  |  |  |  |  | 16,641 |  |  | 7,500
﻿Deferred revenue |  |  |  |  |  | 2,005 |  |  | 2,110
﻿Allowance for doubtful accounts |  |  |  |  |  | 5,691 |  |  | 5,978
﻿Currency translation |  |  |  |  |  | 56,604 |  |  | 34,895
﻿Other |  |  |  |  |  | 2,480 |  |  | 2,698
﻿Valuation allowance |  |  |  |  |  | (50,628) |  |  | (38,802)
﻿Total noncurrent deferred tax assets, net (1) |  |  |  |  |  | 110,867 |  |  | 94,607
﻿ |  |  |  |  |  |  |  |  |
﻿Noncurrent deferred tax liabilities: |  |  |  |  |  |  |  |  |
﻿Property, equipment, and intangible basis differences |  |  |  |  |  | (114,652) |  |  | (98,589)
﻿Straight-line rents |  |  |  |  |  | (20,469) |  |  | (22,740)
﻿Deferred foreign withholding taxes |  |  |  |  |  | (6,225) |  |  | —
﻿Deferred lease costs |  |  |  |  |  | (2,192) |  |  | (2,242)
﻿Other |  |  |  |  |  | (123) |  |  | (136)
﻿Total noncurrent deferred tax liabilities, net (1) |  |  |  |  | $ | (32,794) |  | $ | (29,100)
﻿ (1)Of these amounts, $18,330 and $51,124 are included in Other assets and Other long-term liabilities, respectively on the accompanying Consolidated Balance Sheets as of December 31, 2018. As of December 31, 2017, $1,670 and $30,770 are included in Other assets and Other long-term liabilities on the accompanying Consolidated Balance Sheet. A deferred tax asset is reduced by a valuation allowance if based on the weight of all available evidence, including both positive and negative evidence, it is more likely than not (a likelihood of more than 50%) that the value of such assets will not be realized. The valuation allowance should be sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized. The realization of deferred tax assets, including carryforwards and deductible temporary differences, depends upon the existence of sufficient taxable income of the same character during the carryback or carryforward period. All sources of taxable income available to realize the deferred tax asset, including the future reversal of existing temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards, taxable income in carryback years and tax-planning strategies, should be considered. The Company has recorded a valuation allowance for certain deferred tax assets as management believes that it is not “more-likely-than-not” that the Company will generate sufficient taxable income in future periods to recognize the assets. Valuation allowances of $50.6 million and $38.8 million were being carried to offset net deferred income tax assets as of December 31, 2018 and 2017, respectively. The net change in the valuation allowance for the years ended December 31, 2018 and 2017 was a decrease of $11.8 million and an increase of $31.4 million, respectively. During 2018, the Company released the valuation allowance on the majority of its deferred tax assets related to its Brazil operations as it was determined that it is “more-likely-than-not” the Brazil operations will generate sufficient taxable income to recognize the assets. The Company has available at December 31, 2018, a federal NOL carry-forward of approximately $863.1 mil lion. $857.5 million of these NOL carry-forwards will expire between 2024 and 2037, and $5.6 million have an indefinite carry-forward. As of December 31, 2018, $755.4 million of the federal NOLs are attributes of the REIT. The Company may use these NOLs to offset its REIT taxable income, and thus any required distributions to shareholders may be reduced or eliminated until such time as the NOLs have been fully utilized. The Internal Revenue Code places limitations upon the future availability of NOLs based upon changes in the equity of the Company. If these occur, the ability of the Company to offset future income with existing NOLs may be limited. In addition, the Company has available at December 31, 2018, a foreign NOL carry-forward of $85.0 million and a net state operating tax loss carry-forward of approximately $412.2 million. These net operating tax loss carry-forwards begin to expire in 2020. The U.S. tax losses generated in tax years 2001 through 201 3 remain subject to adjustment, and tax years 201 5 through 201 8 are op en to examination by the major jurisdictions in which the Company operates. The Company has remove d the permanent reinvestment assertion a s of December 31, 2018 for all foreign earnings of our foreign jurisdictions ex cept for Argentina. The Company record ed deferred foreign withholding taxes of $6.2 million at December 31, 2018 for this change in the Company’s permanent reinvestment assertion and will accrue additional withholding taxes as foreign earnings are generated. No additional income taxes have been provided for any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability for any additional outside basis differences in these entities is not practicable. On December 22, 2017, the U.S. government enacted comprehensive tax legislation in the form of the Tax Cuts and Jobs Act (the “Tax Act”) that significantly revise d the U.S. tax code effective January 1, 2018 by, among other things, lowering the corporate income tax rate from a top marginal rate of 35% to a flat 21%, imposing a mandatory one-time deemed repatriation of foreign earnings (commonly referred to as the “transition tax”), creating new taxes on certain foreign-sourced income, and limiting deductibility of interest expense and certain executive compensation. The Company applied the guidance in SAB 118 when accounting for the enactment-date effects of the Tax Act in 2017 and throughout 2018. At December 31, 2017, the Company made a reasonable estimate of the one-time transition tax on accumulated foreign earnings as well as the impact of the Tax Act on its existing deferred tax balances. During the fourth quarter of 2018, the Company completed its accounting for all of the enactment-date income tax effects of the Tax Act. The one-tim e transition tax is based on the Company’s total post-1986 earnings and profits (“E&P”), which was previously deferred from U.S. income taxes. The Company recor ded $52.4 million as a provisional amount of the one-time transition tax able income at December 31, 2017. During 2018, the Company finalized its calculations of the post-1986 E&P as well as the cash balances of the foreign subsidiaries whose earnings were subject to the transition tax. Following the completion of this analysis, the Company reduced its transition taxable income to $49.2 million. Subsequent to the Company’s year-end, the Treasury Department finalized regulations for the calculation of the transition tax, and the Company is analyzing the impact of these regulations on its calculation. The Company ha s elected to include the transition tax able income inclusion over the eight-year period provided in the Tax Act. As of December 31, 2018, the remaining balance of the Company’s transition tax inclusion amount is $41.3 million, which will be included in taxable income over the next six years. As of December 31, 2017, the Company recorded a reduction to its deferred tax asset and offsetting valuation allowance in the amount of $12.3 million related to new limitations on the deductibility of executive compensation in the Tax Act. Upon further analysis of the Tax Act during 2018, the Company determined that $6.0 million of the deferred tax asset should be recorded, which amount is offset by a valuation allowance. The Company will elect qualifying real property trade or business status for the REIT, and is thus not subject to the interest limitation provisions of the Tax Act. The Tax Act subjects a U.S. shareholder to tax on Global Intangible Low-Taxed Income (“GILTI”) earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI i n the year the tax is incurred as a period expense only. The Company has elected to account for GILTI in the year it is incurred. The income inclusion for GILTI for 2018 is $10.2 million.

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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 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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