13.	Income taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

Income before income taxes consisted of the following:

	Year ended December 31,
	2016		2015			2014
Domestic	$	1,144,544	$	764,998		$	1,341,208
International		344,351		(41,862	)		(31,535	)
	$	1,488,895	$	723,136		$	1,309,673

Income tax expense (benefit) consisted of the following:

	Year ended December 31,
	2016			2015			2014
Current:
Federal	$	337,178		$	183,263		$	188,302
State		48,771			30,766			30,789
International		1,928			856			1,687
Total current income tax	$	387,877		$	214,885		$	220,778
Deferred:
Federal		93,214			88,718			192,267
State		(27,764	)		(8,307	)		32,360
International		2,486			430			938
Total deferred income tax	$	67,936		$	80,841		$	225,565
	$	455,813		$	295,726		$	446,343

The reconciliation between the U.S. federal income tax rate and the Company’s effective tax rate is as follows:

	Year ended December 31,
	2016			2015			2014
Federal income tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal benefit		1.2			2.5			3.5
International rate differential		0.2			(1.1	)		(0.2	)
Gain on APAC JV ownership changes		(9.8	)		—			—
Goodwill impairments		6.7			11.7			—
Changes in deferred tax valuation allowances		0.6			2.6			0.6
Other		0.2			1.5			(0.8	)
Impact of noncontrolling interests primarily attributable to non-tax paying entities		(3.5	)		(11.3	)		(4.0	)
Effective tax rate		30.6	%		40.9	%		34.1	%

The Company has indefinitely reinvested $381,523 of undistributed earnings of its foreign operations outside of the United States as of December 31, 2016. Included in this undistributed earnings amount is a non-taxable gain on the APAC JV ownership changes in the amount of $374,374. No deferred tax liability has been recognized for the remittance of such earnings to the U.S. since it is the Company’s intention to utilize these earnings in its foreign operations. The determination of the amount of deferred taxes on these earnings is not practicable since the computation would depend on a number of factors that cannot be known unless a decision is made to repatriate the earnings.

Deferred tax assets and liabilities arising from temporary differences were as follows:

	December 31,
	2016			2015
Receivables	$	19,283		$	43,393
Accrued liabilities		318,596			272,080
Net operating loss carryforwards		130,456			130,977
Other		147,487			114,805
Deferred tax assets		615,822			561,255
Valuation allowance		(56,016	)		(57,811	)
Net deferred tax assets		559,806			503,444
Intangible assets		(1,025,488	)		(927,761	)
Property and equipment		(230,870	)		(205,071	)
Investments in partnerships		(95,936	)		(83,584	)
Other		(16,640	)		(13,990	)
Deferred tax liabilities		(1,368,934	)		(1,230,406	)
Net deferred tax liabilities	$	(809,128	)	$	(726,962	)

At December 31, 2016, the Company had federal net operating loss carryforwards of approximately $155,790 that expire through 2035, although a substantial amount expire by 2028. The Company also had state net operating loss carryforwards of $836,774 that expire through 2036 and international net operating loss carryforwards of $97,281, some of which have an indefinite life. The utilization of a portion of these losses may be limited in future years based on the profitability of certain entities. The valuation allowance net decrease of $1,795 is primarily due to an increase related to the realizability of losses in certain foreign and state jurisdictions of $8,339 and a decrease relating to the APAC JV ownership changes of $10,134.

Unrecognized tax benefits

A reconciliation of the beginning and ending liability for unrecognized tax benefits that do not meet the more-likely-than-not threshold were as follows:

	Year ended December 31,
		2016			2015
Beginning balance	$	39,011		$	31,877
Additions for tax positions related to current year		9,714			6,131
Additions for tax positions related to prior years		—			2,999
Reductions related to lapse of applicable statute		(1,277	)		(1,996	)
Reductions related to settlements with taxing authorities		(23,382	)		—
Ending balance	$	24,066		$	39,011

As of December 31, 2016, the Company’s total liability for unrecognized tax benefits relating to tax positions that do not meet the more-likely-than-not threshold is $24,066, all of which would impact the Company’s effective tax rate if recognized. This balance represents a decrease of $14,945 from the December 31, 2015 balance of $39,011, primarily due to the positive settlement of an IRS and state audit.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in its income tax expense. At December 31, 2016 and 2015, the Company had approximately $2,595 and $9,918, respectively, accrued for interest and penalties related to unrecognized tax benefits, net of federal tax benefit.

The Company and its subsidiaries file U.S. federal and state income tax returns and various international income tax returns. The Company is no longer subject to U.S. federal and state examinations by tax authorities for years before 2013 and 2008, respectively.