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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income/(loss) before income taxes by geographic area was as follows:
|  | Year Ended December 31,
|  | 2017 |  | 2016 |  | 2015
|  | (In thousands)
Domestic |  | $ | 206,579 |  |  | $ | 222,178 |  |  | $ | 231,798 |
Foreign |  | 12,424 |  |  | 5,193 |  |  | (49,627 | )
Total income before income taxes |  | $ | 219,003 |  |  | $ | 227,371 |  |  | $ | 182,171 |
Federal, state and foreign income tax provisions/(benefits) were as follows:
|  | Year Ended December 31,
|  | 2017 |  | 2016 |  | 2015
|  | (In thousands)
Federal: |  |  |  |  |  |
Current |  | $ | 44,921 |  |  | $ | 57,321 |  |  | $ | 66,973 |
Deferred |  | (46,938 | ) |  | 18,704 |  |  | 15,528 |
State: |  |  |  |  |  |
Current |  | 3,774 |  |  | 4,636 |  |  | 5,165 |
Deferred |  | 3,921 |  |  | 1,878 |  |  | 1,768 |
Foreign: |  |  |  |  |  |
Current |  | 2,929 |  |  | 4,187 |  |  | 4,150 |
Deferred |  | (3,046 | ) |  | (6,420 | ) |  | (5,412 | )
Provision for income taxes |  | $ | 5,561 |  |  | $ | 80,306 |  |  | $ | 88,172 |
Actual income tax expense differed from income tax expense computed by applying the U.S. federal statutory corporate tax rate of 35% to income before income taxes in 2017, 2016 and 2015 as follows:
|  | Year Ended December 31,
|  | 2017 |  | 2016 |  | 2015
|  | (In thousands)
Provision at the U.S. federal statutory rate |  | $ | 76,651 |  |  | $ | 79,580 |  |  | $ | 63,760 |
Increase (decrease) resulting from: |  |  |  |  |  |
State income tax, net of benefit for federal deduction |  | 4,472 |  |  | 4,230 |  |  | 4,448 |
Foreign income tax rate differential |  | (2,443 | ) |  | (2,799 | ) |  | (2,002 | )
Employment credits |  | (862 | ) |  | (821 | ) |  | (407 | )
Changes in valuation allowances |  | 629 |  |  | 749 |  |  | 14,667 |
Non-deductible goodwill |  | — |  |  | 34 |  |  | 4,651 |
Tax Cuts and Jobs Act - Deferred Tax Effect |  | (73,028 | ) | — |  | — |  |  | — |
Stock-based compensation |  | (136 | ) |  | 368 |  |  | 386 |
Other |  | 278 |  |  | (1,035 | ) |  | 2,669 |
Provision for income taxes |  | $ | 5,561 |  |  | $ | 80,306 |  |  | $ | 88,172 |
On December 22, 2017, the U.S. government enacted comprehensive tax legislation referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code, including, but not limited to, reducing the U.S. federal corporate tax rate from 35% to 21%, creating a territorial tax system that generally eliminates U.S. federal income taxes on dividends from foreign subsidiaries, and requiring companies to pay a one-time transition tax on unrepatriated earnings of their foreign subsidiaries. In December 2017, the SEC issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Job Act (“SAB 118”), which provides guidance on accounting for tax effects of the Tax Act. SAB 118 provides a measurement period that should not exceed one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. For the year ended December 31, 2017, the Company was able to determine a reasonable estimate of the impact of the Tax Act and recognized that estimate as a provisional amount. Based on the reduction of the U.S. federal corporate tax to 21%, effective January 1, 2018, the Company recorded a provisional $73.0 million tax benefit to continuing operations, with a corresponding reduction in its net deferred tax liabilities. This was based on the remeasurement of the Company’s deferred tax assets and liabilities, and a review of the Company’s valuation allowances, using the new tax rate prescribed in the Tax Act effective in 2018. In addition, the Company provisionally determined that it does not have a transition tax liability for previously untaxed accumulated and current earnings and profits (E&P) of our foreign subsidiaries, based on its estimated calculation of E&P as of the relevant measurement dates. Due to the timing of the enactment and complexity involved in applying the provisions of the Tax Act, we based our provisions on reasonable estimates of the law’s effects in our financial statements as of December 31, 2017. We will complete our accounting for the Tax Act after we have considered additional guidance issued by the U.S. Treasury Department, the IRS, state tax authorities and other standard-setting bodies, and we have gathered and analyzed additional data relative to our calculations. This may result in adjustments to our provisional amounts, which would impact our provision for income taxes and effective tax rate in the period the adjustments are made. We will complete our accounting for the Tax Act in 2018. With regard to the new tax on post-2017 “global intangible low-taxed income” (GILTI) created by the Tax Act, the Company has elected to adopt an accounting policy of accounting for this tax as a period charge in the future period the tax may arise, and has not provided any deferred taxes related to its foreign investments with respect to GILTI. For the year ended December 31, 2017, the Company recorded a tax provision of $5.6 million. This included the tax benefit for the deferred tax impact of the Tax Act noted above, as well as excess tax deductions for restricted stock resulting from the adoption of ASU 2016-09, which were partially offset by certain expenses for stock-based compensation recorded in 2017 that were non-deductible for income tax purposes. For the year ended December 31, 2017, the Company also provided valuation allowances with respect to deferred tax assets primarily relating to goodwill and net operating losses of certain Brazil subsidiaries, as well as state net operating losses in the U.S., based on expectations concerning their realizability. As a result of these items recorded in 2017 compared to the 2016 items discussed below, the effective tax rate for the year ended December 31, 2017 decreased to 2.5%, as compared to 35.3% for the year ended December 31, 2016. During 2016, the Company recorded a tax provision of $80.3 million. Certain expenses for stock-based compensation recorded in 2016 were non-deductible for income tax purposes. The Company provided valuation allowances with respect to goodwill and net operating losses of certain Brazil subsidiaries, as well as state net operating losses in the U.S., based on expectations concerning their realizability. As a result of these items, the impact of a relatively higher proportion of the Company’s pretax income being generated in the Company’s U.K. region, relatively less valuation allowances recognized in 2016 compared to 2015 and the 2015 items discussed below, the effective tax rate for the year ended December 31, 2016 decreased to 35.3%, as compared to 48.4% for the year ended December 31, 2015. During 2015, the Company recorded a tax provision of $88.2 million. Certain expenses for stock-based compensation recorded in 2015 were non-deductible for income tax purposes. The Company provided valuation allowances with respect to goodwill and net operating losses of certain Brazil subsidiaries, as well as state net operating losses in the U.S., based on expectations concerning their realizability. In addition, no substantial deferred tax benefit relative to the impairment of goodwill in the Brazil reporting unit was recognized for U.S. GAAP reporting purposes. Deferred income tax provisions resulted from temporary differences in the recognition of income and expenses for financial reporting purposes and for tax purposes. The tax effects of these temporary differences representing deferred tax assets/liabilities resulted principally from the following:
|  | December 31,
|  | 2017 |  | 2016
|  | (In thousands)
Deferred tax assets: |  |  |  |
Loss reserves and accruals |  | $ | 44,004 |  |  | $ | 59,884 |
Interest rate swaps |  | 259 |  |  | 5,598 |
Goodwill and intangible franchise rights |  | 2,770 |  |  | 5,907 |
U.S. state net operating loss (“NOL”) carryforwards |  | 17,430 |  |  | 16,848 |
Depreciation expense |  | — |  |  | 775 |
Foreign NOL carryforwards |  | 40,582 |  |  | 34,946 |
Other |  | 379 |  |  | — |
Deferred tax assets |  | 105,424 |  |  | 123,958 |
Valuation allowance on deferred tax assets |  | (54,415 | ) |  | (53,946 | )
Net deferred tax assets |  | $ | 51,009 |  |  | $ | 70,012 |
Deferred tax liabilities: |  |  |  |
Goodwill and intangible franchise rights |  | $ | (118,447 | ) |  | $ | (160,439 | )
Depreciation expense |  | (50,166 | ) |  | (64,465 | )
Deferred gain on bond redemption |  | (327 | ) |  | (1,023 | )
Other |  | (1,820 | ) |  | (3,317 | )
Deferred tax liabilities |  | (170,760 | ) |  | (229,244 | )
Net deferred tax liability |  | $ | (119,751 | ) |  | $ | (159,232 | )
As of December 31, 2017, the Company had state NOL carryforwards in the U.S. of $261.9 million that will expire between 2018 and 2037, and foreign NOL carryforwards of $122.0 million that may be carried forward indefinitely. To the extent that the Company expects that net income will not be sufficient to realize these NOLs in certain jurisdictions, a valuation allowance has been established. The Company believes it is more likely than not that its deferred tax assets, net of valuation allowances provided, will be realized, based primarily on our expectation of future taxable income, considering future reversals of existing taxable temporary differences. As of December 31, 2017, the Company had two controlled foreign corporations that own its foreign operations (the “Foreign Subsidiaries”). The Company has not provided for U.S. deferred taxes on the outside basis differences of its Foreign Subsidiaries, as the Company has taken the position that its investment in the Foreign Subsidiaries will be permanently reinvested outside the U.S. The book basis for one of the Company’s Foreign Subsidiaries that consists of the Company’s U.K. operations exceeded the tax basis by approximately $15.0 million, as of December 31, 2017. If a taxable event resulting in the recognition of these outside basis differences occurred, the resulting tax would not be material. The Company is subject to income tax in U.S. federal and numerous state jurisdictions, as well as in the U.K. and Brazil. Based on applicable statutes of limitations, the Company is generally no longer subject to examinations by U.S. tax authorities in years prior to 2013, by U.K. tax authorities in years prior to 2013 and by Brazil tax authorities in years prior to 2012. The Company had no unrecognized tax benefits as of December 31, 2016 with respect to uncertain tax positions and did not incur any interest and penalties for the year then ended. The Company added $1.0 million of unrecognized tax benefits during 2017, based upon tax positions in prior years, that was also the total unrecognized tax benefit balance as of December 31, 2017. To the extent that any such tax benefits are recognized in the future, such recognition would impact the effective tax rate in that period by approximately $0.8 million. For the year ended December 31, 2017, the Company recorded approximately $0.2 million of interest and penalty related to its uncertain tax positions. Consistent with prior practice, the Company recognizes interest and penalties related to uncertain tax positions in income tax expense in the accompanying Consolidated Statements of Operations.

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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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