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INCOME TAXES | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES On December 22, 2017, the U.S. government enacted the Tax Act. The Tax Act reduced the U.S. federal corporate tax rate from 35% to 21% effective January 1, 2018, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and created new U.S. taxes on certain foreign earnings. To account for the reduction in the U.S. federal corporate income tax rate, we remeasured our deferred tax assets and liabilities based on the rates at which they were expected to reverse in the future, generally 21%, which resulted in the recording of a provisional deferred tax benefit of $510.1 million during 2017. To determine the impact from the one-time transition tax on accumulated foreign earnings, we analyzed our cumulative foreign earnings and profits in accordance with the rules provided in the Tax Act and determined that no transition tax was due as a result of the net accumulated deficit in our foreign earnings and profits. As of December 31, 2018, we have completed our accounting for all of the enactment-date income tax effects of the Tax Act and determined that no material adjustments were required to our provisional amounts recorded as of December 31, 2017. Significant components of the provision for income tax benefit (expense) are as follows:
(In thousands) | Years Ended December 31,
| 2018 |  | 2017 |  | 2016
Current - Federal | $ | 1 |  |  | $ | (2,136 | ) |  | $ | (190 | )
Current - foreign | (18,535 | ) |  | (30,132 | ) |  | (44,687 | )
Current - state | (9,779 | ) |  | 1,484 |  |  | (2,908 | )
Total current expense | (28,313 | ) |  | (30,784 | ) |  | (47,785 | )
Deferred - Federal | (4,397 | ) |  | 491,239 |  |  | 38,715 |
Deferred - foreign | (6,531 | ) |  | (2,560 | ) |  | 56,036 |
Deferred - state | (7,110 | ) |  | (489 | ) |  | 2,665 |
Total deferred benefit (expense) | (18,038 | ) |  | 488,190 |  |  | 97,416 |
Income tax benefit (expense) | $ | (46,351 | ) |  | $ | 457,406 |  |  | $ | 49,631 |
Current tax expense of $28.3 million was recorded for 2018 as compared to a current tax expense of $30.8 million for 2017. The current tax expense recorded in 2018 was primarily related to foreign income taxes on operating profits generated in certain foreign jurisdictions during the period. The decrease in current tax expense when compared to 2017 was primarily attributable to a decrease in foreign tax expense which resulted primarily from a decrease in foreign earnings in certain jurisdictions during 2018. Current tax expense for state increased in 2018 primarily as a result of increased operating profits in certain state jurisdictions during the period. Current tax expense of $30.8 million was recorded for 2017 as compared to a current tax expense of $47.8 million for 2016. The current tax expense recorded in 2017 was primarily related to foreign income taxes on operating profits generated in certain foreign jurisdictions during the period. The decrease in current tax expense when compared to 2016 was primarily attributable to a decrease in foreign tax expense which resulted primarily from a decrease in foreign earnings in certain jurisdictions during 2017. Deferred tax expense of $18.0 million was recorded for 2018 compared with deferred tax benefit of $488.2 million for 2017. The decrease in deferred tax benefit during 2018 was primarily attributed to the $510.1 million provisional deferred tax benefit recorded in connection with the remeasurement of our U.S. deferred tax balances upon the enactment of the Tax Act described above in 2017. Deferred tax benefit of $488.2 million was recorded for 2017 compared with deferred tax benefit of $97.4 million for 2016. The increase in deferred tax benefit during 2017 was primarily attributed to the $510.1 million provisional deferred tax benefit recorded in connection with the remeasurement of our U.S. deferred tax balances upon the enactment of the Tax Act described above. In addition, the change in foreign deferred tax benefit recorded primarily related to the $43.3 million deferred tax benefit recorded in 2016 for the release of valuation allowance against certain net operating loss carryforwards in France. Significant components of the Company's deferred tax liabilities and assets as of December 31, 2018 and 2017 are as follows:
(In thousands) | 2018 |  | 2017
Deferred tax liabilities: |  |  |
Intangibles and fixed assets | $ | 1,167,903 |  |  | $ | 1,285,330 |
Long-term debt | 259,324 |  |  | — |
Investments | 2,733 |  |  | 16,484 |
Other | 15,605 |  |  | 9,868 |
Total deferred tax liabilities | 1,445,565 |  |  | 1,311,682 |
Deferred tax assets: |  |  |
Accrued expenses | 101,207 |  |  | 105,823 |
Long-term debt | — |  |  | 49,767 |
Net operating loss carryforwards | 985,403 |  |  | 1,106,319 |
Interest expense carryforwards | 347,843 |  |  | — |
Bad debt reserves | 12,820 |  |  | 11,731 |
Other | 28,574 |  |  | 27,654 |
Total gross deferred tax assets | 1,475,847 |  |  | 1,301,294 |
Less: Valuation allowance | 1,010,223 |  |  | 952,337 |
Total deferred tax assets | 465,624 |  |  | 348,957 |
Net deferred tax liabilities | $ | 979,941 |  |  | $ | 962,725 |
Net deferred tax liabilities includes $644.9 million of deferred tax liabilities included in Liabilities subject to compromise at December 31, 2018. The deferred tax liability related to intangibles and fixed assets primarily relates to the difference in book and tax basis of acquired FCC licenses, billboard permits and tax deductible goodwill created from the Company’s various stock acquisitions. In accordance with ASC 350-10, Intangibles—Goodwill and Other, the Company does not amortize FCC licenses and billboard permits. As a result, this deferred tax liability will not reverse over time unless the Company recognizes future impairment charges related to its FCC licenses, permits and tax deductible goodwill or sells its FCC licenses or permits. As the Company continues to amortize its tax basis in its FCC licenses, permits and tax deductible goodwill, the deferred tax liability will increase over time. The Company’s net foreign deferred tax assets for the periods ending December 31, 2018 and 2017 were $45.0 million and $50.7 million, respectively. At December 31, 2018, the Company had recorded net operating loss carryforwards (tax effected) for federal and state income tax purposes of approximately $858.3 million, expiring in various amounts through 2037. The Tax Act amended Section 163(j) of the Internal Revenue Code, thereby establishing new rules governing a U.S. taxpayer’s ability to deduct interest expense beginning in 2018. Section 163(j), as amended, generally limits the deduction for business interest expense to thirty percent of adjusted taxable income, and provides that any disallowed interest expense may be carried forward indefinitely. In applying the new rules under Section 163(j), the Company recorded an interest expense limitation and carryforward deferred tax asset for federal and state purposes of $347.8 million as of December 31, 2018. The Company expects to realize the benefits of a portion of its deferred tax assets based upon expected future taxable income from deferred tax liabilities that reverse in the relevant federal and state jurisdictions and carryforward periods. As of December 31, 2018, the Company had recorded a valuation allowance of $893.0 million against a portion of these U.S. federal and state deferred tax assets which it does not expect to realize. After considering the deferred tax adjustments in connection with the utilization of net operating losses and the creation of interest limitation carryforwards the Company's U.S. federal and state deferred tax valuation allowance increased by $61.5 million during the current period. In addition, the Company recorded a net reduction of $7.8 million in valuation allowance against its foreign deferred tax assets during the year ended December 31, 2018. At December 31, 2018, the Company had recorded $127.1 million (tax-effected) of deferred tax assets for foreign net operating loss carryforwards, which are offset in part by an associated valuation allowance of $79.3 million. Additional deferred tax valuation allowance of $38.0 million offsets other foreign deferred tax assets that are not expected to be realized. Realization of these foreign deferred tax assets is dependent upon the Company’s ability to generate future taxable income in appropriate tax jurisdictions and carryforward periods. Due to the Company’s evaluation of all available evidence, including significant negative evidence of cumulative losses in these jurisdictions, the Company continues to record valuation allowances on the foreign deferred tax assets that are not expected to be realized. The Company expects to realize its remaining gross deferred tax assets based upon its assessment of deferred tax liabilities that will reverse in the same carryforward period and jurisdiction and are of the same character as the net operating loss carryforwards and temporary differences that give rise to the deferred tax assets. Any deferred tax liabilities associated with acquired FCC licenses, billboard permits and tax-deductible goodwill intangible assets are not relied upon as a source of future taxable income, as these intangible assets have an indefinite life. At December 31, 2018, net deferred tax liabilities include a deferred tax asset of $10.5 million relating to stock-based compensation expense under ASC 718-10, Compensation—Stock Compensation. Full realization of this deferred tax asset requires stock options to be exercised at a price equaling or exceeding the sum of the grant price plus the fair value of the option at the grant date and restricted stock to vest at a price equaling or exceeding the fair market value at the grant date. Accordingly, there can be no assurance that the stock price of the Company’s common stock will rise to levels sufficient to realize the entire deferred tax benefit currently reflected in its balance sheet. Loss before income taxes:
(In thousands) | Years Ended December 31,
| 2018 |  | 2017 |  | 2016
US | $ | (134,893 | ) |  | $ | (952,436 | ) |  | $ | (349,876 | )
Foreign | (21,395 | ) |  | 36,319 |  |  | 53,673 |
Total loss before income taxes | $ | (156,288 | ) |  | $ | (916,117 | ) |  | $ | (296,203 | )
The reconciliation of income tax computed at the U.S. federal statutory tax rates to the recorded income tax benefit (expense) is:
| Years Ended December 31,
(In thousands) | 2018 |  | 2017 |  | 2016
| Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent
Income tax benefit at statutory rates | $ | 32,821 |  |  | 21.0 | % |  | $ | 320,641 |  |  | 35.0 | % |  | $ | 103,670 |  |  | 35.0 | %
State income taxes, net of federal tax effect | 21,137 |  |  | 13.5 | % |  | 7,667 |  |  | 0.8 | % |  | 6,372 |  |  | 2.2 | %
Foreign income taxes | (29,559 | ) |  | (18.9 | )% |  | (19,981 | ) |  | (2.2 | )% |  | (24,307 | ) |  | (8.2 | )%
Nondeductible items | (5,400 | ) |  | (3.5 | )% |  | (6,659 | ) |  | (0.7 | )% |  | (5,760 | ) |  | (1.9 | )%
Changes in valuation allowance and other estimates | (64,913 | ) |  | (41.5 | )% |  | (350,407 | ) |  | (38.2 | )% |  | (31,229 | ) |  | (10.6 | )%
U.S. tax reform | — |  |  | — | % |  | 510,064 |  |  | 55.6 | % |  | — |  |  | — | %
Other, net | (437 | ) |  | (0.3 | )% |  | (3,919 | ) |  | (0.4 | )% |  | 885 |  |  | 0.3 | %
Income tax benefit (expense) | $ | (46,351 | ) |  | (29.7 | )% |  | $ | 457,406 |  |  | 49.9 | % |  | $ | 49,631 |  |  | 16.8 | %
The Company’s effective tax rate for the year ended December 31, 2018 is (29.7)%. The effective tax rate for 2018 was primarily impacted by $61.5 million of deferred tax expense attributed to the valuation allowance recorded against federal and state deferred tax assets generated in the current period due to the uncertainty of the ability to realize those assets in future periods. In addition, losses in certain foreign jurisdictions were not benefited primarily due to the uncertainty of the ability to utilize those losses in future periods. A tax benefit was recorded for the year ended December 31, 2017 of 49.9%. The effective tax benefit rate for 2017 was impacted by the effects of U.S. corporate tax reform which resulted in a provisional tax benefit of $510.1 million recorded in connection with the reduction in the U.S. federal corporate tax rate. In partial offset to this tax benefit, the Company recorded tax expense of $387.7 million in connection with the valuation allowance recorded against federal and state deferred tax assets generated in the current period due to the uncertainty of the ability to realize those assets in future periods. A tax benefit was recorded for the year ended December 31, 2016 of 16.8%. The effective tax benefit rate for 2016 was impacted by the $43.3 million deferred tax benefit recorded in connection with the release of valuation allowance in France, which was offset by $54.7 million of tax expense attributable to the sale of our outdoor business in Australia. Additionally, the 2016 effective tax benefit rate was impacted by the $31.8 million valuation allowance recorded against a portion of current period federal and state deferred tax assets due to the uncertainty of the ability to realize those assets in future periods. The Company provides for any related tax liability on undistributed earnings that the Company does not intend to be indefinitely reinvested outside the United States and that would become taxable upon remittance within our foreign structure. The Company has not provided U.S. federal income taxes for temporary differences with respect to investments in our foreign subsidiaries, which at December 31, 2018 currently result in tax basis amounts greater than the financial reporting basis. If any excess cash held by our foreign subsidiaries were needed to fund operations in the U.S., we could presently repatriate available funds without a requirement to accrue or pay U.S. taxes. The Company continues to record interest and penalties related to unrecognized tax benefits in current income tax expense. The total amount of interest accrued at December 31, 2018 and 2017 was $53.8 million and $48.6 million, respectively. The total amount of unrecognized tax benefits including accrued interest and penalties at December 31, 2018 and 2017 was $135.3 million and $136.3 million, respectively, of which $112.2 million and $110.1 million is included in “Other long-term liabilities” and $1.3 million and $0.0 million is included in “Accrued expenses” on the Company’s consolidated balance sheets, respectively. In addition, $21.8 million and $26.2 million of unrecognized tax benefits are recorded net with the Company’s deferred tax assets for its net operating losses as opposed to being recorded in “Other long-term liabilities” at December 31, 2018 and 2017, respectively. The total amount of unrecognized tax benefits at December 31, 2018 and 2017 that, if recognized, would impact the effective income tax rate is $73.6 million and $71.6 million, respectively.
(In thousands) | Years Ended December 31,
Unrecognized Tax Benefits | 2018 |  | 2017
Balance at beginning of period | $ | 87,665 |  |  | $ | 98,804 |
Increases for tax position taken in the current year | 7,109 |  |  | 7,366 |
Increases for tax positions taken in previous years | 1,007 |  |  | 2,291 |
Decreases for tax position taken in previous years | (7,120 | ) |  | (5,307 | )
Decreases due to settlements with tax authorities | — |  |  | (225 | )
Decreases due to lapse of statute of limitations | (7,159 | ) |  | (15,264 | )
Balance at end of period | $ | 81,502 |  |  | $ | 87,665 |
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. During 2018 the Company settled several state and local tax and foreign tax examinations resulting is a reduction of unrecognized tax benefits of $7.1 million, excluding interest. In addition, during 2018 the statute of limitations for certain tax years expired in the U.S., certain states, the United Kingdom and other jurisdictions resulting in the reduction to unrecognized tax benefits of $7.2 million, excluding interest. During 2017, the Company settled all outstanding U.S. federal income tax matters for tax years 2011 and 2012, which resulted in a reduction of unrecognized tax benefits of $4.7 million. In addition, during 2017 the statute of limitations for certain tax years expired in the U.S., certain states, the United Kingdom and other jurisdictions resulting in the reduction to unrecognized tax benefits of $15.3 million, excluding interest. All federal income tax matters through 2014 are closed. The majority of all material state, local, and foreign income tax matters have been concluded for years through 2011.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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