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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2015
Income Tax Disclosure |
Income taxes receivable (payable) | TDS’ current income taxes balances at December 31, 2015 and 2014 were as follows:
December 31, | 2015 |  | 2014
(Dollars in thousands) |  |  |  |  |
Federal income taxes receivable | $ | 66,785 |  | $ | 108,820
Net state income taxes receivable |  | 3,309 |  |  | 4,391
Income tax expense (benefit) | Income tax expense (benefit) is summarized as follows:
Year Ended December 31, | 2015 |  | 2014 |  | 2013
(Dollars in thousands) |  |  |  |  |  |  |  |
Current |  |  |  |  |  |  |  |
| Federal | $ | 92,887 |  | $ | (87,736) |  | $ | 181,579
| State |  | 8,256 |  |  | 11,091 |  |  | 11,614
Deferred |  |  |  |  |  |  |  |
| Federal |  | 60,939 |  |  | 41,851 |  |  | (65,970)
| Federal - valuation allowance adjustment |  | – |  |  | (10,816) |  |  | –
| State |  | 9,910 |  |  | 2,208 |  |  | (1,180)
| State - valuation allowance adjustment |  | – |  |  | 38,470 |  |  | –
|  | $ | 171,992 |  | $ | (4,932) |  | $ | 126,043
Income tax reconciliation | A reconciliation of TDS’ income tax expense computed at the statutory rate to the reported income tax expense, and the statutory federal income tax expense rate to TDS’ effective income tax expense rate is as follows:
Year Ended December 31, | 2015 |  | 2014 |  | 2013
|  | Amount |  | Rate |  | Amount |  | Rate |  | Amount |  | Rate
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Statutory federal income tax expense and rate | $ | 152,111 |  | 35.0 | % |  | $ | (53,278) |  | 35.0 | % |  | $ | 102,502 |  | 35.0 | %
State income taxes, net of federal benefit 1 |  | 11,002 |  | 2.5 |  |  |  | 42,834 |  | (28.1) |  |  |  | 10,548 |  | 3.6 |
Effect of noncontrolling interests |  | 2,791 |  | 0.6 |  |  |  | (5,777) |  | 3.8 |  |  |  | (1,034) |  | (0.4) |
Gains (losses) on investments and sale of assets 2 |  | – |  | – |  |  |  | – |  | – |  |  |  | 14,949 |  | 5.1 |
Change in federal valuation allowance 3 |  | 2,022 |  | 0.5 |  |  |  | (8,697) |  | 5.7 |  |  |  | – |  | – |
Goodwill impairment 4 |  | – |  | – |  |  |  | 18,260 |  | (12.0) |  |  |  | – |  | – |
Other differences, net |  | 4,066 |  | 1.0 |  |  |  | 1,726 |  | (1.2) |  |  |  | (922) |  | (0.3) |
Total income tax expense (benefit) and rate | $ | 171,992 |  | 39.6 | % |  | $ | (4,932) |  | 3.2 | % |  | $ | 126,043 |  | 43.0 | %
1 | State income taxes, net of federal benefit, include changes in unrecognized tax benefits as well as adjustments to the valuation allowance. During the third quarter of 2014 TDS recorded a $38.5 million increase to income tax expense related to a valuation allowance recorded against certain state deferred tax assets.
2 | Gains (losses) on investments and sale of assets represents 2013 tax expense related to the NY1 & NY2 Deconsolidation and the Divestiture Transaction. See Note 6 — Acquisitions, Divestitures and Exchanges and Note 8 — Investments in Unconsolidated Entities for additional information.
3 | Change in federal valuation allowance in 2015 relates primarily to losses incurred by certain entities where realization of deferred tax assets is not "more likely than not." The decrease to income tax expense in 2014 was due to a valuation allowance reduction for federal net operating losses previously limited under loss utilization rules.
4 | Goodwill impairment reflects an adjustment to increase income tax expense by $18.3 million related to a portion of the goodwill impairment of Suttle-Straus and the HMS reporting unit recorded in 2014 which is nonde ductible for income tax purposes. See Note 7 — Intangible Assets for additional information related to the goodwill impairment.
Temporary income tax differences | Significant components of TDS’ deferred income tax assets and liabilities at December 31, 2015 and 2014 were as follows:
December 31, | 2015 |  | 2014
(Dollars in thousands) |  |  |  |  |
Deferred tax assets |  |  |  |  |
| Current deferred tax assets | $ | – |  | $ | 113,402
| Net operating loss (“NOL”) carryforwards |  | 137,574 |  |  | 135,676
| Stock-based compensation |  | 61,680 |  |  | 54,789
| Compensation and benefits - other |  | 37,744 |  |  | 11,014
| Deferred rent |  | 19,896 |  |  | 19,604
| Other |  | 92,787 |  |  | 35,523
Total deferred tax assets |  | 349,681 |  |  | 370,008
| Less valuation allowance |  | (112,357) |  |  | (113,553)
Net deferred tax assets |  | 237,324 |  |  | 256,455
Deferred tax liabilities |  |  |  |  |
| Property, plant and equipment |  | 672,473 |  |  | 667,540
| Licenses/intangibles |  | 300,669 |  |  | 259,865
| Partnership investments |  | 163,287 |  |  | 151,123
| Other |  | – |  |  | 9,724
| Total deferred tax liabilities |  | 1,136,429 |  |  | 1,088,252
Net deferred income tax liability | $ | 899,105 |  | $ | 831,797
Deferred tax valuation allowance | A summary of TDS' deferred tax asset valuation allowance is as follows:
|  | 2015 |  | 2014 |  | 2013
(Dollars in thousands) |  |  |  |  |  |  |  |
Balance at beginning of year | $ | 113,553 |  | $ | 79,064 |  | $ | 70,502
| Charged (credited) to income tax expense |  | (1,196) |  |  | 34,489 |  |  | 1,954
| Charged to other accounts |  | – |  |  | – |  |  | 6,608
Balance at end of year | $ | 112,357 |  | $ | 113,553 |  | $ | 79,064
Income tax unrecognized benefits summary | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|  | 2015 |  | 2014 |  | 2013
(Dollars in thousands) |  |  |  |  |  |  |  |
Unrecognized tax benefits balance at beginning of year | $ | 37,816 |  | $ | 30,390 |  | $ | 28,420
| Additions for tax positions of current year |  | 7,382 |  |  | 7,610 |  |  | 6,388
| Additions for tax positions of prior years |  | 1,783 |  |  | 883 |  |  | 1,858
| Reductions for tax positions of prior years |  | (1,434) |  |  | (399) |  |  | (467)
| Reductions for settlements of tax positions |  | (1,225) |  |  | (312) |  |  | (1,337)
| Reductions for lapses in statutes of limitations |  | (5,448) |  |  | (356) |  |  | (4,472)
Unrecognized tax benefits balance at end of year | $ | 38,874 |  | $ | 37,816 |  | $ | 30,390

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: 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=6907707&loc=d3e32639-109319 + Details
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