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Income Taxes | 9 Months Ended
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Sep. 30, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes On July 16, 2014, we ceased to be a member of the CBS consolidated tax group and on July 17, 2014, we began operating in a manner that will allow us to qualify as a REIT for U.S. federal income tax purposes for the tax year commencing July 17, 2014, and ending December 31, 2014. In the third quarter of 2014, as a result of our REIT conversion, substantially all Deferred income tax liabilities, net, was reversed into Net income via a non-cash benefit of approximately $232.3 million. As a result of our REIT conversion, our expected effective tax rate for the second half of 2014 will be substantially lower than previous periods. Prior to July 17, 2014 our U.S. operating results were included in consolidated federal, and certain state and local income tax returns filed by CBS. The income tax expense reflected in the Consolidated Statements of Operations, deferred tax assets and liabilities included in the Consolidated Statements of Financial Position and income tax payments reflected in the Condensed Consolidated Statements of Cash Flows were prepared as if these amounts were calculated on a separate tax return basis for us. We believe that the assumptions and estimates used to determine these tax amounts were reasonable. However, the consolidated financial statements herein may not necessarily reflect our income tax expense or tax payments, or what our tax amounts would have been if we had been a stand-alone company during the periods prior to July 17, 2014. As a REIT, we must distribute to our stockholders, for the tax year commencing July 17, 2014, and ending December 31, 2014, at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gain. To the extent that we satisfy the 90% distribution requirement, but distribute less than 100% of our taxable income, we will be subject to U.S. federal corporate income tax on the undistributed income. In addition, we are subject to a 4% nondeductible excise tax on the amount, if any, by which our distributions in any calendar year are less than a minimum amount specified under U.S. federal income tax laws. We intend to distribute net income to our stockholders in a manner to satisfy the REIT 90% distribution requirement and to avoid the 4% nondeductible excise tax. On September 30, 2014, we distributed a quarterly dividend of $0.37 per share, which we anticipate will be taxed as ordinary income by our stockholders. On April 2, 2014, we entered into a tax matters agreement, which governs the respective rights, responsibilities and obligations of CBS and us with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings, and other matters regarding taxes for the periods during which we are a member of the CBS consolidated tax group. The tax matters agreement also separately allocates among the parties any tax liability arising as a result of any failure of the Separation to qualify as a tax-free transaction based on actions taken during the two-year period following the Separation. Our effective income tax rate represents a combined annual effective tax rate for federal, state, local and foreign taxes applied to interim operating results. Excluding the non-cash benefit recorded as a result of our REIT conversion in 2014, the effective income tax rate was 27.7% in the three months ended September 30, 2014, and 43.9% in the three months ended September 30, 2013. Excluding the non-cash benefit recorded as a result of our REIT conversion in 2014, the effective income tax rate was 39.3% in the nine months ended September 30, 2014, and 43.5% in the nine months ended September 30, 2013. The difference between income taxes expected at the U.S. federal statutory income tax rate of 35% and the provision for income taxes is summarized as follows:
|  | Three Months Ended |  | Nine Months Ended
|  | September 30, |  | September 30,
(in millions) |  | 2014 |  | 2013 |  | 2014 |  | 2013
Taxes on income at U.S. statutory rate |  | $ | 2.5 |  |  | $ | 22.7 |  |  | $ | 21.2 |  |  | $ | 56.7 |
State and local taxes, net of federal tax benefit |  | 0.9 |  |  | 4.0 |  |  | 4.2 |  |  | 9.9 |
Effect of foreign operations |  | 1.0 |  |  | 0.7 |  |  | 2.2 |  |  | 1.7 |
Reversal of deferred tax liability |  | (232.3 | ) |  | — |  |  | (232.3 | ) |  | — |
Other, net |  | 1.5 |  |  | 1.1 |  |  | 1.8 |  |  | 2.2 |
Provision for income taxes |  | $ | (226.4 | ) |  | $ | 28.5 |  |  | $ | (202.9 | ) |  | $ | 70.5 |
The following table sets forth the change in the reserve for uncertain tax positions, excluding related accrued interest and penalties.
(in millions) |  |
As of December 31, 2013 |  | $ | 4.0 |
Additions for current year tax positions |  | 0.1 |
Reductions for prior year tax positions |  | (2.9 | )
As of September 30, 2014 |  | $ | 1.2 |
Reductions for prior year tax positions includes $2.1 million of liabilities which were transferred to CBS pursuant to our tax matters agreement. The reduction in this liability did not impact our provision for income taxes during the period. The reserve for uncertain tax positions of $1.2 million as of September 30, 2014, includes $0.8 million which would affect our effective income tax rate if and when recognized in future years.

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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 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: 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 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 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 Reference 6: 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 + Details
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