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INCOME TAXES | 12 Months Ended
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Dec. 31, 2016
INCOME TAXES |
INCOME TAXES | 10.INCOME TAXES Income tax expense for the years ended December 31, 2016, 2015 and 2014 consisted of the following (in millions):
|  | Years Ended December 31, |
|  | 2016 |  | 2015 |  | 2014 |
Current: |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 10.0 |  | $ | 22.6 |  | $ | 45.5 |
State |  |  | (1.3) |  |  | 2.9 |  |  | 3.7 |
Total |  |  | 8.7 |  |  | 25.5 |  |  | 49.2 |
Deferred: |  |  | 39.9 |  |  | 49.3 |  |  | 2.7 |
Total income tax expense |  | $ | 48.6 |  | $ | 74.8 |  | $ | 51.9 |
Income tax expense for the years ended December 31, 2016, 2015, and 2014, differs from amounts computed by applying the statutory federal rate to income before income taxes for the following reasons:
|  | Years Ended December 31, |
|  | 2016 |  | 2015 |  | 2014 |
Computed federal income tax expense |  | 35.0 | % | 35.0 | % | 35.0 | %
State income tax |  | 1.8 | % | 2.5 | % | 2.2 | %
Valuation allowance |  | 0.3 | % | 1.1 | % | 3.3 | %
Foreign taxes |  | 0.4 | % | 0.6 | % | 0.4 | %
Deferred tax adjustment |  | 0.1 | % | 1.1 | % | (0.9) | %
Unrecognized tax benefits |  | (1.0) | % | 0.4 | % | (0.4) | %
Other — net |  | 1.0 | % | 1.4 | % | 2.7 | %
Effective income tax rate |  | 37.6 | % | 42.1 | % | 42.3 | %
The Company recorded a valuation allowance against operating losses related to a foreign subsidiary of $0.4 million, $1.8 million and $4.1 million in 2016, 2015 and 2014, respectively, as the Company determined the tax benefits associated with such losses may not be realized in future periods. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2016 and 2015, were as follows (in millions):
|  | As of December 31, |
|  | 2016 |  | 2015 |
Deferred tax assets: |  |  |  |  |  |  |
Benefit plans |  | $ | 78.1 |  | $ | 79.1 |
Federal net operating losses |  |  | 52.1 |  |  | 68.0 |
Insurance reserves |  |  | 9.9 |  |  | 15.4 |
State net operating losses |  |  | 7.9 |  |  | 7.8 |
Foreign losses |  |  | 4.9 |  |  | 5.7 |
Alternative minimum tax credits |  |  | 31.0 |  |  | 3.6 |
Allowance for doubtful accounts |  |  | 1.3 |  |  | 2.4 |
Reserves |  |  | 2.4 |  |  | — |
Other |  |  | 3.5 |  |  | 1.9 |
Total deferred tax assets |  |  | 191.1 |  |  | 183.9 |
Valuation allowance |  |  | (11.9) |  |  | (12.6) |
Total Deferred tax assets, net of valuation allowance |  |  | 179.2 |  |  | 171.3 |
Deferred tax liabilities: |  |  |  |  |  |  |
Basis differences for property and equipment |  |  | 339.0 |  |  | 300.8 |
Capital Construction Fund |  |  | 115.8 |  |  | 95.6 |
Intangibles |  |  | 53.8 |  |  | 53.0 |
Deferred revenue |  |  | 9.5 |  |  | 11.8 |
Joint ventures and other investments |  |  | 9.9 |  |  | 10.6 |
Reserves |  |  | — |  |  | 10.0 |
Total deferred tax liabilities |  |  | 528.0 |  |  | 481.8 |
Deferred tax liability, net |  | $ | 348.8 |  | $ | 310.5 |
The Company’s income taxes payable has been reduced by the tax benefits from share-based compensation. The Company receives an income tax benefit for exercised stock options calculated as the difference between the fair market value of the stock issued at the time of exercise and the option exercise price, tax-effected. The Company also receives an income tax benefit for non-vested stock when it vests, measured as the fair market value of the stock at the time of vesting, tax-effected. The net tax benefits from share-based transactions were $2.2 million, $2.6 million and $0.8 million for 2016, 2015 and 2014, respectively, and the portion of the tax benefit related to the excess of the amount reported as the tax deduction over expense was reflected as an increase to additional paid-in-capital in the Consolidated Statements of Shareholders’ Equity. Net Operating Losses and Tax Credit Carryforwards: The Company’s net operating losses (“NOLs”) and tax credit carryforwards at December 31, 2016 and 2015, were as follows:
(in millions) |  | Expiration Date |  | 2016 |  | 2015
U.S. Federal income tax NOLs |  | Various dates through December 31, 2034 |  | $ | 190.0 |  | $ | 194.2
U.S. State income tax NOLs |  | Various dates through December 31, 2034 |  | $ | 192.8 |  | $ | 192.4
Foreign income tax NOLs |  | No expiration date |  | $ | 17.6 |  | $ | 20.2
U.S. alternative minimum tax credit |  | No expiration date |  | $ | 31.0 |  | $ | 3.6
Valuation allowances recorded against all of the Company’s foreign income tax NOLs and a portion of the state income tax NOLs were $11.9 million and $12.6 million as of December 31, 2016 and 2015, respectively. The Company believes that it is more likely than not that the benefit from these amounts will not be realized. The U.S. federal and state income tax NOLs in the Company’s filed income tax returns include unrecognized tax benefits. The deferred tax assets recognized for those NOLs are presented net of these unrecognized tax benefits. Because of the change of ownership provisions of the Tax Reform Act of 1986, use of a portion of the Company’s domestic NOL and tax credit carryforwards may be limited in future periods. Further, a portion of the federal and state income tax NOLs and tax credit carryforwards may expire before being applied to reduce future income tax liabilities. Unrecognized Tax Benefits: Total unrecognized benefits represent the amount that, if recognized, would favorably affect the Company’s effective tax rate in future periods. The Company does not expect a material change in gross unrecognized benefits in the next twelve months. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in millions):
Unrecognized Tax Benefits: |  | Amount |
Balance at December 31, 2013 |  | $ | 7.2 |
Changes in tax positions of prior years, net |  |  | 0.5 |
Reductions for lapse of statute of limitations |  |  | (1.0) |
Balance at December 31, 2014 |  |  | 6.7 |
Changes in tax positions of prior years, net |  |  | 1.5 |
Additions from unrecognized tax benefits acquired |  |  | 14.4 |
Reductions for lapse of statute of limitations |  |  | (0.5) |
Balance at December 31, 2015 |  |  | 22.1 |
Changes in tax positions of prior years, net |  |  | (1.1) |
Reductions for lapse of statute of limitations |  |  | (0.6) |
Balance at December 31, 2016 |  | $ | 20.4 |
Included in the balance of unrecognized tax benefits at December 31, 2016 are potential benefits of $4.3 million that, if recognized, would affect the effective tax rate. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. To the extent interest and penalties are not ultimately assessed with respect to the settlement of uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision. Interest accrued related to the balance of unrecognized tax benefits totaled $0.4 million as of December 31, 2016 and 2015. The Company is no longer subject to U.S. federal income tax audits for years before 2012. The Company is routinely involved in State, local income and excise tax audits, and foreign tax audits.

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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=6907707&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=6907707&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=6907707&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=6907707&loc=d3e32537-109319 + Details
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