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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes On December 22, 2017, changes in U.S. tax laws were enacted, which significantly revised U.S. corporate income tax by, among other things, lowering corporate income tax rates, implementing a modified territorial tax system and imposing a one-time transition tax on deemed repatriated foreign earnings and profits. As of December 31, 2017, the Company had not completed its accounting for the tax effects of changes in U.S. tax laws. However, in accordance with SAB 118, the Company recorded a provisional one-time net benefit of $194.1 million as a reasonable estimate of the impacts of the changes in U.S. tax laws. The net benefit was primarily due to the re-measurement of the Company’s deferred tax assets and liabilities, principally deferred tax liabilities associated with its intangible assets and convertible securities, which resulted in a benefit of $216.9 million, partially offset by a $22.8 million transition tax on its deemed repatriated foreign earnings and profits. The Company is still analyzing certain aspects of the changes in U.S. tax laws and evaluating its calculations, which could potentially affect the re-measurement of its deferred tax assets and liabilities or give rise to new deferred tax amounts. The Company has also not yet completed its accounting for the transition tax and the amount may change once the Company finalizes its calculation of foreign earnings and profits previously deferred from U.S. federal taxation and the amounts held in cash or other specified assets. The provisional amounts recorded by the Company are based on guidance, interpretations and other information available as of January 24, 2018. The impact of the changes in U.S. tax laws may be refined as further guidance, interpretations or information becomes available or upon completion by the Company of its evaluation of the impact of the changes in U.S. tax laws. The Company’s consolidated income tax provision includes taxes attributable to the controlling interest and, to a lesser extent, taxes attributable to non-controlling interests. The 2017 provisional impact of the changes in U.S. tax laws is reflected in the tables below. The following table presents our consolidated provision for income taxes:
|  | For the Years Ended December 31,
|  | 2015 |  | 2016 |  | 2017
Controlling interests: |  |  |  |  |  |
Current tax |  | $ | 152.4 |  |  | $ | 168.1 |  |  | $ | 173.8 |
Intangible-related deferred taxes |  | 77.7 |  |  | 84.3 |  |  | (98.5 | )
Other deferred taxes |  | 27.7 |  |  | (23.2 | ) |  | (24.9 | )
Total controlling interests |  | 257.8 |  |  | 229.2 |  |  | 50.4 |
Non-controlling interests: |  |  |  |  |  |  |
Current tax |  | $ | 9.8 |  |  | $ | 8.2 |  |  | $ | 8.2 |
Deferred taxes |  | (4.2 | ) |  | (1.8 | ) |  | (0.2 | )
Total non-controlling interests |  | 5.6 |  |  | 6.4 |  |  | 8.0 |
Provision for income taxes |  | $ | 263.4 |  |  | $ | 235.6 |  |  | $ | 58.4 |
Income before income taxes (controlling interest) |  | $ | 767.3 |  |  | $ | 702.0 |  |  | $ | 739.9 |
Effective tax rate attributable to controlling interests(1) |  | 33.6 | % |  | 32.6 | % |  | 6.8 | %
__________________________
(1) | Taxes attributable to the controlling interest divided by Income before income taxes (controlling interest).
The consolidated provision for income taxes consisted of the following:
|  | For the Years Ended December 31,
|  | 2015 |  | 2016 |  | 2017
Current: |  |  |  |  |  |
Federal |  | $ | 106.3 |  |  | $ | 103.4 |  |  | $ | 109.0 |
State |  | 18.3 |  |  | 22.9 |  |  | 18.9 |
Foreign |  | 37.6 |  |  | 50.0 |  |  | 54.1 |
Total current |  | 162.2 |  |  | 176.3 |  |  | 182.0 |
Deferred: |  |  |  |  |  |
Federal |  | 103.8 |  |  | 62.3 |  |  | (124.9 | )
State |  | 14.8 |  |  | 10.0 |  |  | 10.4 |
Foreign |  | (17.4 | ) |  | (13.0 | ) |  | (9.1 | )
Total deferred |  | 101.2 |  |  | 59.3 |  |  | (123.6 | )
Provision for income taxes |  | $ | 263.4 |  |  | $ | 235.6 |  |  | $ | 58.4 |
For financial reporting purposes, Income before income taxes consisted of the following:
|  | For the Years Ended December 31,
|  | 2015 |  | 2016 |  | 2017
Domestic |  | $ | 827.6 |  |  | $ | 688.1 |  |  | $ | 756.5 |
International |  | 263.0 |  |  | 286.5 |  |  | 310.6 |
|  | $ | 1,090.6 |  |  | $ | 974.6 |  |  | $ | 1,067.1 |
The following table reconciles the U.S. federal statutory tax rate to the Company’s effective tax rate:
| For the Years Ended December 31,
| 2015 |  | 2016 |  | 2017
Statutory U.S. federal tax rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State income taxes, net of federal benefit | 2.6 |  |  | 2.9 |  |  | 2.7 |
Effect of foreign operations | (3.5 | ) |  | (4.6 | ) |  | (5.4 | )
Equity compensation | 0.8 |  |  | (0.4 | ) |  | (0.7 | )
Effect of changes in tax law, rates | (0.8 | ) |  | (0.3 | ) |  | (25.2 | )
Other | (0.5 | ) |  | — |  |  | 0.4 |
Effective tax rate (controlling interest) | 33.6 | % |  | 32.6 | % |  | 6.8 | %
Effect of income from non-controlling interests | (9.2 | ) |  | (8.4 | ) |  | (1.3 | )
Effective tax rate | 24.4 | % |  | 24.2 | % |  | 5.5 | %
Deferred income tax liability (net) reflects the expected future tax consequences of temporary differences between the financial reporting basis and tax basis of the Company’s assets and liabilities. The significant components of the Company’s Deferred income tax liability (net) are as follows:
|  | December 31,
|  | 2016 |  | 2017
Deferred Tax Assets |  |  |  |
State net operating loss carryforwards |  | $ | 17.4 |  |  | $ | 16.8 |
Foreign loss carryforwards |  | 14.6 |  |  | 16.3 |
Tax benefit of uncertain tax positions |  | 12.1 |  |  | 11.4 |
Deferred compensation |  | 34.1 |  |  | 10.4 |
Foreign tax credits |  | 10.0 |  |  | — |
Accrued expenses |  | 3.9 |  |  | 1.3 |
Total deferred tax assets |  | 92.1 |  |  | 56.2 |
Valuation allowance |  | (22.1 | ) |  | (24.1 | )
Deferred tax assets, net of valuation allowance |  | $ | 70.0 |  |  | $ | 32.1 |
Deferred Tax Liabilities |  |  |  |
Intangible asset amortization |  | $ | (396.8 | ) |  | $ | (258.6 | )
Non-deductible intangible amortization |  | (177.0 | ) |  | (150.8 | )
Convertible securities interest |  | (109.0 | ) |  | (77.9 | )
Deferred income |  | (47.2 | ) |  | (5.9 | )
Other |  | (0.8 | ) |  | (6.3 | )
Total deferred tax liabilities |  | (730.8 | ) |  | (499.5 | )
Deferred income tax liability (net) |  | $ | (660.8 | ) |  | $ | (467.4 | )
At December 31, 2017, the Company had available state net operating loss carryforwards of $432.6 million, which will expire over a 19-year period. At December 31, 2017, the Company had foreign loss carryforwards of $61.5 million, of which $51.8 million will expire over a 20-year period and the balance will carry forward indefinitely. The Company believes that it is more-likely-than-not that the benefit from a portion of the state and foreign loss carryforwards will not be realized and has, therefore, recorded a valuation allowance of $24.1 million on the deferred tax assets related to these state and foreign loss carryforwards. For the years ended December 31, 2016 and 2017, the Company increased its valuation allowance $1.6 million and $2.0 million, respectively, related to an increase in the loss carryforwards that are not expected to be realized. The Company continues not to provide for U.S. income taxes on the excess of the financial reporting basis over tax basis in the Company’s investments in foreign subsidiaries considered permanent in duration. Such amount would generally become taxable upon the repatriation of assets from, or a sale or liquidation of, the subsidiaries. While a determination of the potential amount of unrecognized deferred U.S. income tax liability related to these amounts is not practicable because of the numerous assumptions associated with this hypothetical calculation, as of December 31, 2017, the estimated amount of such difference was $270.9 million. A reconciliation of the changes in unrecognized tax benefits is as follows:
|  | For the Years Ended December 31,
|  | 2015 |  | 2016 |  | 2017
Balance, as of January 1, |  | $ | 28.8 |  |  | $ | 26.9 |  |  | $ | 26.8 |
Additions based on current year tax positions |  | 2.2 |  |  | 3.8 |  |  | 6.0 |
Additions based on prior years’ tax positions |  | 1.6 |  |  | 0.6 |  |  | 1.5 |
Reductions related to lapses of statutes of limitations |  | (4.3 | ) |  | (4.7 | ) |  | (2.3 | )
Additions (reductions) related to foreign exchange rates |  | (1.4 | ) |  | 0.2 |  |  | 0.4 |
Balance, as of December 31, |  | $ | 26.9 |  |  | $ | 26.8 |  |  | $ | 32.4 |
Included in the balance of unrecognized tax benefits at December 31, 2015, 2016 and 2017, are $25.3 million, $26.0 million and $32.4 million, respectively, of tax benefits that, if recognized, would favorably affect the Company’s effective tax rate. The Company records accrued interest and penalties, if any, related to unrecognized tax benefits in Income tax expense. The Company had $1.8 million, $1.4 million and $1.7 million in interest related to unrecognized tax benefits accrued at December 31, 2015, 2016 and 2017, respectively, which are included in the table above. For the years ended December 31, 2015, 2016 and 2017, no significant interest or penalties were recorded in Income tax expense. The Company is subject to U.S. federal, state and local and foreign income tax in multiple jurisdictions. The Company is also periodically subject to tax examinations in these jurisdictions. The completion of examinations may result in the payment of additional taxes and/or the recognition of tax benefits. The Company is generally no longer subject to income tax examinations by U.S. federal, state and local or foreign taxing authorities for periods prior to 2011. The Company does not expect any significant changes to its liability for tax benefits during the next 12 months.

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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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