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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | Note H — Income Taxes A reconciliation of the federal statutory rate of 35% to actual follows:
| Year Ended December 31,
| 2016 |  | 2015 |  | 2014
Tax at statutory rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
Goodwill impairment | (29.3 | )% |  | (27.0 | )% |  | — | %
State income taxes | 3.3 | % |  | 2.8 | % |  | 1.8 | %
Effect of foreign operations, net of foreign tax credits | (0.2 | )% |  | — | % |  | (4.4 | )%
Effect of current and prior year credits | 2.9 | % |  | 0.5 | % |  | (3.5 | )%
Adjustments to deferred taxes | 0.6 | % |  | — | % |  | (2.4 | )%
Valuation allowance | (6.6 | )% |  | (1.0 | )% |  | 6.2 | %
Other, net | 1.4 | % |  | (0.5 | )% |  | (0.4 | )%
Effective income tax rate | 7.1 | % |  | 9.8 | % |  | 32.3 | %
The components of income tax (benefit) expense are as follows:
| Year Ended December 31,
(In thousands) | 2016 |  | 2015 |  | 2014
Current expense (benefit) |  |  |  |  |
Federal | $ | 23,752 |  |  | $ | 29,668 |  |  | $ | 14,943 |
State | 779 |  |  | (6,432 | ) |  | 4,032 |
Foreign | (582 | ) |  | 2,575 |  |  | 1,673 |
Total current | 23,949 |  |  | 25,811 |  |  | 20,648 |
Deferred (benefit) expense |  |  |  |  |
Federal | (27,307 | ) |  | (100,139 | ) |  | 24,556 |
State | (6,586 | ) |  | (28,143 | ) |  | (90 | )
Foreign | 1,865 |  |  | (589 | ) |  | 817 |
Total deferred | (32,028 | ) |  | (128,871 | ) |  | 25,283 |
Total income tax (benefit) expense | $ | (8,079 | ) |  | $ | (103,060 | ) |  | $ | 45,931 |
Deferred tax assets (liabilities) consist of the following:
| December 31,
(In thousands) | 2016 |  | 2015
Deferred tax assets |  |  |
State net operating loss carryforwards | $ | 17,538 |  |  | $ | 16,032 |
Foreign net operating loss carryforwards | 17,234 |  |  | 20,396 |
Accrued liabilities | 70,733 |  |  | 62,115 |
Intangible assets | 43,662 |  |  | 29,913 |
Other assets including credits | 7,497 |  |  | 5,413 |
Foreign tax credit carryforwards | 13,576 |  |  | 13,576 |
Total deferred tax assets | 170,240 |  |  | 147,445 |
Valuation allowance | (35,410 | ) |  | (31,829 | )
Deferred tax assets, net | 134,830 |  |  | 115,616 |
Rental merchandise | (234,211 | ) |  | (263,158 | )
Property assets | (73,763 | ) |  | (56,888 | )
Total deferred tax liabilities | (307,974 | ) |  | (320,046 | )
Net deferred taxes | $ | (173,144 | ) |  | $ | (204,430 | )
At December 31, 2016, there are approximately $360.6 million of state NOL carryforwards expiring between 2017 and 2036, offset by a valuation allowance of $27.4 million. Of the total remaining state NOL carryforwards, approximately 16.5% represent acquired NOLs. Utilization of these NOLs is subject to applicable annual limitations for U.S. state tax purposes. At December 31, 2016, the Mexico NOL carryforwards were approximately $53.0 million, which expire between 2020 and 2026, and are offset with a full valuation allowance. The Puerto Rico NOL is $4.2 million and it will expire in 2024. In addition, at December 31, 2016, we also had approximately $13.6 million in foreign tax credit (“FTC”) carryforwards expiring between 2020 and 2025, offset by a valuation allowance of $11.1 million. We establish a valuation allowance to the extent we consider it more likely than not that the deferred tax assets attributable to our NOLs, FTCs or other deferred tax assets will not be recovered. We are subject to federal, state, local and foreign income taxes. Along with our U.S. subsidiaries, we file a U.S. federal consolidated income tax return. With few exceptions, we are no longer subject to U.S. federal, state, foreign and local income tax examinations by tax authorities for years before 2012. We are currently under examination in Mexico, Puerto Rico, and various states and have been notified of audit for years 2012 - 2014, by the Internal Revenue Service. We do not anticipate that adjustments as a result of these audits, if any, will result in a material change to our consolidated statement of earnings, financial condition, statement of cash flows or earnings per share. As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred tax assets. As of December 31, 2016, in part because in the current year, the Company achieved a history of cumulative pre-tax income in the U.S. federal tax jurisdiction, management determined that sufficient positive evidence exists as of December 31, 2016, to conclude that it is more likely than not that deferred taxes are realizable. A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:
| Year Ended December 31,
(In thousands) | 2016 |  | 2015 |  | 2014
Beginning unrecognized tax benefit balance | $ | 27,164 |  |  | $ | 13,376 |  |  | $ | 13,173 |
Additions based on tax positions related to current year | 773 |  |  | 1,508 |  |  | 425 |
Additions for tax positions of prior years | 8,396 |  |  | 20,684 |  |  | 2,400 |
Reductions for tax positions of prior years | (2,246 | ) |  | (8,354 | ) |  | (2,225 | )
Settlements | (364 | ) |  | (50 | ) |  | (397 | )
Ending unrecognized tax benefit balance | $ | 33,723 |  |  | $ | 27,164 |  |  | $ | 13,376 |
Included in the balance of unrecognized tax benefits at December 31, 2016, is $6.8 million, net of federal benefit, which, if ultimately recognized, will affect our annual effective tax rate. During the next twelve months, we anticipate that it is reasonably possible that the amount of unrecognized tax benefits could be reduced by approximately $8.1 million either because our tax position will be sustained upon audit or as a result of the expiration of the statute of limitations for specific jurisdictions. As of December 31, 2016, we have accrued approximately $2.4 million for the payment of interest for uncertain tax positions and recorded interest expense of approximately $0.5 million for the year then ended, which are excluded from the reconciliation of unrecognized tax benefits presented above.

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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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