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INCOME TAXES | 12 Months Ended
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Dec. 31, 2015
INCOME TAXES |
18. | INCOME TAXES
Income before income taxes consisted of the following:
|  | Year Ended December 31, |
|  | 2013 |  |  | 2014 |  |  | 2015 |
Income before income taxes: |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 162,687 |  |  | $ | 205,521 |  |  | $ | 259,652 |
Foreign |  |  | 101,177 |  |  |  | 84,542 |  |  |  | 88,015 |
Total |  | $ | 263,864 |  |  | $ | 290,063 |  |  | $ | 347,667 |
Current and deferred income taxes were as follows:
|  | Year Ended December 31, |
|  | 2013 |  |  | 2014 |  |  | 2015 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 97,467 |  |  | $ | 61,732 |  |  | $ | 71,288 |
Foreign |  |  | 42,690 |  |  |  | 27,681 |  |  |  | 35,874 |
State |  |  | 10,951 |  |  |  | 6,125 |  |  |  | 10,682 |
Total current expense |  | $ | 151,108 |  |  | $ | 95,538 |  |  | $ | 117,844 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (30,833 | ) |  | $ | 6,322 |  |  | $ | 10,420 |
Foreign |  |  | 2,653 |  |  |  | (6,437 | ) |  |  | (3,339 | )
State |  |  | (9,612 | ) |  |  | 641 |  |  |  | 4,014 |
Total deferred taxes |  |  | (37,792 | ) |  |  | 526 |  |  |  | 11,095 |
Income taxes |  | $ | 113,316 |  |  | $ | 96,064 |  |  | $ | 128,939 |
A reconciliation between income tax expense and taxes computed by applying the applicable statutory federal income tax rate to income before income taxes follows:
|  | Year Ended December 31, |
|  | 2013 |  |  | 2014 |  |  | 2015 |
Computed statutory tax expense |  | $ | 92,353 |  |  | $ | 101,522 |  |  | $ | 121,683 |
Foreign inflation adjustments |  |  | 67 |  |  |  | 641 |  |  |  | (1,295 | )
State and local income taxes, net of federal income tax impact |  |  | 789 |  |  |  | 4,549 |  |  |  | 9,559 |
Foreign losses not benefited and other changes in valuation allowance |  |  | (2,052 | ) |  |  | (275 | ) |  |  | (2,408 | )
Foreign tax rate differential |  |  | (336 | ) |  |  | (2,125 | ) |  |  | (2,660 | )
Foreign dividends |  |  | 3,294 |  |  |  | 1,083 |  |  |  | — |
Sale of Mexican subsidiaries and related changes in intangible assets |  |  | 21,406 |  |  |  | (10,065 | ) |  |  | — |
Changes in uncertain tax positions |  |  | (2,024 | ) |  |  | (1,540 | ) |  |  | 3,717 |
Other — net |  |  | (181 | ) |  |  | 2,274 |  |  |  | 343 |
Income taxes |  | $ | 113,316 |  |  | $ | 96,064 |  |  | $ | 128,939 |
The Company reinvests the undistributed earnings of its non-U.S. subsidiaries with the exception of its subsidiary in Ecuador. Accordingly, deferred U.S. federal and state income taxes are provided only on the undistributed earnings of the Company’s subsidiary in Ecuador. As of December 31, 2015, the Company has not provided deferred taxes on approximately $316,000 of undistributed earnings of non-U.S. subsidiaries, as it is the Company’s policy to indefinitely reinvest these earnings in non-U.S. operations. However, the Company may periodically repatriate a portion of these earnings to the extent that it does not incur an additional U.S. tax liability. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested earnings is not practicable. Deferred Income Taxes The tax effects of significant temporary differences and tax loss and tax credit carryforwards comprising the net long-term deferred income tax liabilities as of December 31, 2014 and 2015 consisted of the following:
|  | December 31, |
|  | 2014 |  |  | 2015 |
Deferred liabilities: |  |  |  |  |  |  |  |
Theatre properties and equipment |  | $ | 127,010 |  |  | $ | 141,155 |
Tax impact of items in accumulated other comprehensive income (loss) |  |  | 55 |  |  |  | 158 |
Intangible asset — other |  |  | 29,342 |  |  |  | 28,889 |
Intangible asset — tradenames |  |  | 111,726 |  |  |  | 112,413 |
Investment in partnerships |  |  | 111,328 |  |  |  | 108,733 |
Total deferred liabilities |  |  | 379,461 |  |  |  | 391,348 |
Deferred assets: |  |  |  |  |  |  |  |
Deferred lease expenses |  |  | 27,341 |  |  |  | 26,966 |
Exchange loss |  |  | — |  |  |  | 3,736 |
Deferred revenue — NCM |  |  | 124,366 |  |  |  | 128,642 |
Capital lease obligations |  |  | 73,306 |  |  |  | 75,966 |
Tax loss carryforwards |  |  | 7,764 |  |  |  | 7,379 |
Alternative minimum tax and other credit carryforwards |  |  | 43,384 |  |  |  | 41,300 |
Other expenses, not currently deductible for tax purposes |  |  | 25,807 |  |  |  | 20,204 |
Total deferred assets |  |  | 301,968 |  |  |  | 304,193 |
Net deferred income tax liability before valuation allowance |  |  | 77,493 |  |  |  | 87,155 |
Valuation allowance against deferred assets — current |  |  | 2,384 |  |  |  | — |
Valuation allowance against deferred assets — non-current |  |  | 50,489 |  |  |  | 50,636 |
Net deferred income tax liability |  | $ | 130,366 |  |  | $ | 137,791 |
Net deferred tax liability — Foreign |  | $ | 12,213 |  |  | $ | 4,212 |
Net deferred tax liability — U.S. |  |  | 118,153 |  |  |  | 133,579 |
Total |  | $ | 130,366 |  |  | $ | 137,791 |
The Company’s foreign tax credit carryforwards began to expire 2015. Some foreign net operating losses will expire in the next reporting period; however, some losses may be carried forward indefinitely. State net operating losses may be carried forward for periods of between five and twenty years with the last expiring year being 2035. During November 2015, the FASB issued ASU 2015-17, which simplifies the presentation of deferred income taxes. ASU 2015-17 requires that deferred tax assets and liabilities be classified as long-term on the balance sheet. The Company elected to early adopt ASU 2015-17 effective December 31, 2015, on a prospective basis. Adoption of ASU 2015-17 resulted in a reclassification of the Company’s net current deferred tax asset to the net long-term deferred tax asset on the Company’s consolidated balance sheet as of December 31, 2015. Balances as of December 31, 2014 have not been recast. Uncertain Tax Positions The following is a reconciliation of the total amounts of unrecognized tax benefits excluding interest and penalties, for the years ended December 31, 2013, 2014 and 2015:
|  | Year Ended December 31, |
|  | 2013 |  |  | 2014 |  |  | 2015 |
Balance at January 1, |  | $ | 33,222 |  |  | $ | 18,780 |  |  | $ | 16,515 |
Gross increases — tax positions in prior periods |  |  | 413 |  |  |  | 10 |  |  |  | 40 |
Gross decreases — tax positions in prior periods |  |  | — |  |  |  | (2,379 | ) |  |  | — |
Gross increases — current period tax positions |  |  | 1,476 |  |  |  | 1,324 |  |  |  | 2,112 |
Gross decreases — current period tax positions |  |  | — |  |  |  | — |  |  |  | — |
Settlements |  |  | (15,444 | ) |  |  | (963 | ) |  |  | (871 | )
Foreign currency translation adjustments |  |  | (887 | ) |  |  | (257 | ) |  |  | (663 | )
Balance at December 31, |  | $ | 18,780 |  |  | $ | 16,515 |  |  | $ | 17,133 |
The Company had $15,693 and $17,008 of unrecognized tax benefits, including interest and penalties, as of December 31, 2014 and 2015, respectively. Of these amounts, $15,693 and $17,008 represent the amount of unrecognized tax benefits that if recognized would impact the effective income tax rate for the years ended December 31, 2014 and 2015, respectively. The Company had $2,500 and $3,198 accrued for interest and penalties as of December 31, 2014 and 2015, respectively. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and in certain state and foreign jurisdictions and are routinely under audit by many different tax authorities. The Company believes that its accrual for tax liabilities is adequate for all open audit years based on its assessment of many factors including past experience and interpretations of tax law. This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events. The Company is no longer subject to income tax audits from the Internal Revenue Service for years before 2012. The Company is no longer subject to state income tax examinations by tax authorities in its major state jurisdictions for years before 2011. Certain state returns were amended as a result of the Internal Revenue Service examination closures for 2007 through 2009, and the statutes remain open for those amendments. The Company is no longer subject to non-U.S. income tax examinations by tax authorities in its major non-U.S. tax jurisdictions for years before 2004. The Company is currently under audit in the non-U.S. tax jurisdictions of Brazil and Chile. The Company believes that it is reasonably possible that the Chile audit will be completed within the next twelve 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 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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