We have been organized and have operated as a REIT effective beginning with our taxable year that ended on December 31, 2014. As a REIT, we are generally permitted to deduct from our federal taxable income the dividends we pay to our stockholders. The income represented by such dividends is not subject to federal taxation at the entity level but is taxed, if at all, at the stockholder level. The income of our domestic TRSs, which hold our domestic operations that may not be REIT-compliant as currently operated and structured, is subject, as applicable, to federal and state corporate income tax. In addition, we and our subsidiaries continue to be subject to foreign income taxes in jurisdictions in which we have business operations or a taxable presence, regardless of whether assets are held or operations are conducted through subsidiaries disregarded for federal tax purposes or TRSs. We will also be subject to a separate corporate income tax on any gains recognized on the sale or disposition of any asset previously owned by a C corporation during a five-year period following the date on which that asset was first owned by a REIT that are attributable to "built-in" gains with respect to that asset on that date (e.g. with respect to the REIT conversion, the assets that we owned on January 1, 2014). This built-in gains tax has been imposed on our depreciation recapture recognized into income as a result of accounting method changes commenced in our pre-REIT period and in connection with the Recall Transaction. If we fail to remain qualified for taxation as a REIT, we will be subject to federal income tax at regular corporate income tax rates. Even if we remain qualified for taxation as a REIT, we may be subject to some federal, state, local and foreign taxes on our income and property in addition to taxes owed with respect to our TRS operations. In particular, while state income tax regimes often parallel the federal income tax regime for REITs, many states do not completely follow federal rules and some do not follow them at all.

On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Reform Legislation”) was enacted into law in the United States. The Tax Reform Legislation amends the Internal Revenue Code of 1986, as amended (the “Code”), to reduce tax rates and modify policies, credits and deductions for businesses and individuals. The following summarizes certain components of the Tax Reform Legislation and the impact such components of the Tax Reform Legislation had on our results of operations for the taxable year ended December 31, 2017:

a.Corporate Tax Rate Reduction

The Tax Reform Legislation reduced the United States corporate federal income tax rate from 35% to 21% for taxable years beginning after December 31, 2017 (the “U.S. Federal Rate Reduction”). Our deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled. As a result of the Tax Reform Legislation being enacted prior to December 31, 2017, our consolidated balance sheet as of December 31, 2017 reflects the revaluation of our deferred tax assets and liabilities based upon the U.S. Federal Rate Reduction. During the fourth quarter of 2017, we recorded a discrete tax benefit of approximately $4,685, representing the revaluation of our deferred tax assets and liabilities as a result of the U.S. Federal Rate Reduction included in the Tax Reform Legislation.

b.Deemed Repatriation Transition Tax

The Tax Reform Legislation imposes a transition tax (the “Deemed Repatriation Transition Tax”) on a mandatory deemed repatriation of post-1986 undistributed foreign earnings and profits not previously subject to United States tax as of November 2, 2017 or December 31, 2017, whichever is greater (the “Undistributed E&P”) as of the last taxable year beginning before January 1, 2018. The Deemed Repatriation Transition Tax varies depending on whether the Undistributed E&P is held in liquid (as defined in the Tax Reform Legislation) or non-liquid assets. A participation deduction against the deemed repatriation will result in a Deemed Repatriation Transition Tax on Undistributed E&P of 15.5% if held in cash and liquid assets and 8% if held in non-liquid assets. The Deemed Repatriation Transition Tax applies regardless of whether or not an entity has cash in its foreign subsidiaries and regardless of whether the entity actually repatriates the Undistributed E&P back to the United States.

Our current estimate of the amount of Undistributed E&P deemed repatriated under the Tax Reform Legislation in our taxable year ending December 31, 2017 is approximately $186,000 (the “Estimated Undistributed E&P”). We have opted to include the full amount of Estimated Undistributed E&P in our 2017 taxable income, rather than spread it over eight years (as permitted by the Tax Reform Legislation). Accordingly, included in our REIT taxable income for 2017 is approximately $82,000 related to the deemed repatriation of Undistributed E&P (the “Deemed Repatriation Taxable Income”). To remain qualified for taxation as a REIT, we are generally required to distribute at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and excluding net capital gains) each year to our stockholders.

Our current estimate of Estimated Undistributed E&P includes certain assumptions made by us regarding the cumulative earnings and profits of our foreign subsidiaries, as well as the characterization of such Estimated Undistributed E&P (liquid versus non-liquid assets). In 2018, we will perform additional analysis to determine the actual amount of Undistributed E&P associated with our foreign subsidiaries, as well as the characterization of such Undistributed E&P. We do not believe this will have an impact on our provision for income taxes or our qualification as a REIT. However, it may impact our shareholder dividend reporting.

The significant components of our deferred tax assets and deferred tax liabilities are presented below:



	December 31,
	2016			2017
Deferred Tax Assets:
Accrued liabilities	$	30,901		$	17,565
Deferred rent	2,930			1,337
Net operating loss carryforwards	98,879			105,026
Federal benefit of unrecognized tax benefits	12,036			3,051
Foreign deferred tax assets and other adjustments	20,131			20,029
Valuation allowance	(71,359		)	(61,756		)
	93,518			85,252
Deferred Tax Liabilities:
Other assets, principally due to differences in amortization	(179,977		)	(168,028		)
Plant and equipment, principally due to differences in depreciation	(52,572		)	(61,530		)
	(232,549		)	(229,558		)
Net deferred tax liability	$	(139,031	)	$	(144,306	)

The deferred tax assets and liabilities are presented below:



	December 31,
	2016			2017
Noncurrent deferred tax assets (Included in Other, a component of Other Assets, net)	$	12,264		$	11,422
Noncurrent deferred tax liabilities	(151,295		)	(155,728		)

We have federal net operating loss carryforwards, which expire from 2023 through 2036, of $66,313 at December 31, 2017 to reduce future federal taxable income, of which $1,662 of federal tax benefit is expected to be realized. We can carry forward these net operating losses to the extent we do not utilize them in any given available year. We have state net operating loss carryforwards, which expire from 2018 through 2036, of which an insignificant state tax benefit is expected to be realized. We have assets for foreign net operating losses of $103,550, with various expiration dates (and in some cases no expiration date), subject to a valuation allowance of approximately 59%.

Rollforward of the valuation allowance is as follows:



Year Ended December 31,	Balance at Beginning of the Year		Charged (Credited) to Expense			Other Increases/(Decreases)(1)			Balance at End of the Year
2015	$	40,182	$	33,509		$	(13,682	)	$	60,009
2016	60,009		7,660			3,690			71,359
2017	71,359		(4,317		)	(5,286		)	61,756

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(1)	Other increases and decreases in valuation allowances are primarily related to changes in foreign currency exchange rates and disposal of certain foreign subsidiaries.

The components of income (loss) from continuing operations before provision (benefit) for income taxes and gain on sale of real estate are:



	Year Ended December 31,
	2015			2016		2017
United States	$	179,928		$	106,223	$	161,198
Canada	37,131			28,157		50,019
Other Foreign	(54,993		)	12,264		4,888
	$	162,066		$	146,644	$	216,105

The provision (benefit) for income taxes consists of the following components:



	Year Ended December 31,
	2015			2016			2017
Federal—current	$	13,083		$	52,944		$	16,345
Federal—deferred	(9,579		)	(28,127		)	(12,655		)
State—current	522			6,096			3,440
State—deferred	158			(1,479		)	(1,276		)
Foreign—current	31,581			36,272			42,532
Foreign—deferred	1,948			(20,762		)	(22,439		)
	$	37,713		$	44,944		$	25,947

A reconciliation of total income tax expense and the amount computed by applying the former federal income tax rate of 35.0% to income from continuing operations before provision (benefit) for income taxes and gain on sale of real estate for the years ended December 31, 2015, 2016 and 2017, respectively, is as follows:



	Year Ended December 31,
	2015			2016			2017
Computed "expected" tax provision	$	56,723		$	51,325		$	75,637
Changes in income taxes resulting from:
Tax adjustment relating to REIT	(51,625		)	(18,526		)	(78,873		)
Deferred tax adjustment and other taxes due to REIT conversion	(9,067		)	247			—
State taxes (net of federal tax benefit)	2,017			3,796			2,692
Increase (decrease) in valuation allowance (net operating losses)	33,509			7,660			(4,317		)
Foreign repatriation	4,030			510			29,476
U.S. Federal Rate Reduction	—			—			(4,685		)
Reserve (reversal) accrual and audit settlements (net of federal tax benefit)	(2,874		)	1,898			(9,103		)
Foreign tax rate differential	(8,915		)	(13,328		)	(11,949		)
Disallowed foreign interest, Subpart F income, and other foreign taxes	18,022			7,773			29,325
Other, net	(4,107		)	3,589			(2,256		)
Provision (Benefit) for Income Taxes	$	37,713		$	44,944		$	25,947

Our effective tax rates for the years ended December 31, 2015, 2016 and 2017 were 23.3%, 30.6% and 12.0%, respectively. Our effective tax rate is subject to variability in the future due to, among other items: (1) changes in the mix of income between our qualified REIT subsidiaries and our TRSs, as well as among the jurisdictions in which we operate; (2) tax law changes; (3) volatility in foreign exchange gains and losses; (4) the timing of the establishment and reversal of tax reserves; and (5) our ability to utilize net operating losses that we generate.

The primary reconciling items between the former federal statutory tax rate of 35.0% and our overall effective tax rate for the year ended December 31, 2015 were the benefit derived from the dividends paid deduction of $51,625 and an out-of-period tax adjustment ($9,067 tax benefit) recorded during the third quarter to correct the valuation of certain deferred tax assets associated with the REIT conversion that occurred in 2014, partially offset by valuation allowances on certain of our foreign net operating losses of $33,509, primarily related to our foreign subsidiaries in Argentina, Brazil, France and Russia.

The primary reconciling items between the former federal statutory tax rate of 35.0% and our overall effective tax rate for the year ended December 31, 2016 were the benefit derived from the dividends paid deduction of $18,526 and the impact of differences in the tax rates at which our foreign earnings are subject resulting in a tax benefit of $13,328, partially offset by valuation allowances on certain of our foreign net operating losses of $7,660.

The primary reconciling items between the former federal statutory tax rate of 35.0% and our overall effective tax rate for the year ended December 31, 2017 were the benefit derived from the dividends paid deduction of $78,873, the impact of differences in the tax rates at which our foreign earnings are subject resulting in a tax benefit of $11,949, and a release of valuation allowances on certain of our foreign net operating losses of $4,317 as a result of the merger of certain of our foreign subsidiaries, partially offset by the impact of the Tax Reform Legislation of $24,791 (reflecting the impact of the Deemed Repatriation Transition Tax, partially offset by the impact of the U.S. Federal Rate Reduction).

As a REIT, we are entitled to a deduction for dividends paid, resulting in a substantial reduction of federal income tax expense. As a REIT, substantially all of our income tax expense will be incurred based on the earnings generated by our foreign subsidiaries and our domestic TRSs.

Following our conversion to a REIT in 2014, we concluded that it was not our intent to reinvest our current and future undistributed earnings of our foreign subsidiaries indefinitely outside the United States.

During 2016, as a result of the closing of the Recall Transaction and the subsequent integration of Recall’s operations into our operations, we reassessed our intentions regarding the indefinite reinvestment of such undistributed earnings of our foreign subsidiaries outside the United States (the “2016 Indefinite Reinvestment Assessment”). As a result of the 2016 Indefinite Reinvestment Assessment, we concluded that it is our intent to indefinitely reinvest our current and future undistributed earnings of certain of our unconverted foreign taxable REIT subsidiaries (“TRSs”) outside the United States and, therefore, during 2016, we recognized a decrease in our provision for income taxes from continuing operations in the amount of $3,260, representing the reversal of previously recognized incremental foreign withholding taxes on the earnings of such unconverted foreign TRSs. As a result of the 2016 Indefinite Reinvestment Assessment, we no longer provide incremental foreign withholding taxes on the retained book earnings of these unconverted foreign TRSs, which was approximately $230,000 as of December 31, 2017. As a REIT, future repatriation of incremental undistributed earnings of our foreign subsidiaries will not be subject to federal or state income tax, with the exception of foreign withholding taxes in limited instances; however, such future repatriations will require distribution in accordance with REIT distribution rules, and any such distribution may then be taxable, as appropriate, at the stockholder level. We continue, however, to provide for incremental foreign withholding taxes on net book over outside basis differences related to the earnings of our foreign qualified REIT subsidiaries and certain other foreign TRSs (excluding unconverted foreign TRSs).

The evaluation of an uncertain tax position is a two-step process. The first step is a recognition process whereby we determine whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step is a measurement process whereby a tax position that meets the more likely than not recognition threshold is calculated to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.

We have elected to recognize interest and penalties associated with uncertain tax positions as a component of the (benefit) provision for income taxes in the accompanying Consolidated Statements of Operations. We recorded an increase of $2,173, $1,805 and $289 for gross interest and penalties for the years ended December 31, 2015, 2016 and 2017, respectively. We had $8,646 and $7,061 accrued for the payment of interest and penalties as of December 31, 2016 and 2017, respectively.

A summary of tax years that remain subject to examination by major tax jurisdictions is as follows:



Tax Years		Tax Jurisdiction
See Below		United States—Federal and State
2012 to present		Canada
2014 to present		United Kingdom

The normal statute of limitations for United States federal tax purposes is three years from the date the tax return is filed; however, the statute of limitations may remain open for periods longer than three years in instances where a federal tax examination is in progress. The 2014, 2015 and 2016 tax years remain subject to examination for United States federal tax purposes as well as net operating loss carryforwards utilized in these years. We utilized net operating losses from 2001 and 2008 through 2014 in our federal income tax returns for these tax years. The normal statute of limitations for state purposes is between three to five years. However, certain of our state statute of limitations remain open for periods longer than this when audits are in progress.

We are subject to income taxes in the United States and numerous foreign jurisdictions. We are subject to examination by various tax authorities in jurisdictions in which we have business operations or a taxable presence. We regularly assess the likelihood of additional assessments by tax authorities and provide for these matters as appropriate. As of December 31, 2016, we had $59,466 of reserves related to uncertain tax positions, of which $56,303 and $3,163 is included in other long-term liabilities and deferred income taxes, respectively, in the accompanying Consolidated Balance Sheet. As of December 31, 2017, we had $38,533 of reserves related to uncertain tax positions, of which $34,003 and $4,530 is included in other long-term liabilities and deferred income taxes, respectively, in the accompanying Consolidated Balance Sheet. Although we believe our tax estimates are appropriate, the final determination of tax audits and any related litigation could result in changes in our estimates.

A rollforward of unrecognized tax benefits is as follows:



Gross tax contingencies—December 31, 2014	$	55,951
Gross additions based on tax positions related to the current year	3,484
Gross additions for tax positions of prior years	979
Gross reductions for tax positions of prior years	(3,588		)
Lapses of statutes	(9,141		)
Settlements	—
Gross tax contingencies—December 31, 2015	$	47,685
Gross additions based on tax positions related to the current year	3,704
Gross additions for tax positions of prior years	12,207
Gross reductions for tax positions of prior years(1)	(1,740		)
Lapses of statutes	(2,390		)
Settlements	—
Gross tax contingencies—December 31, 2016	$	59,466
Gross additions based on tax positions related to the current year	4,067
Gross additions for tax positions of prior years	3,368
Gross reductions for tax positions of prior years	(2,789		)
Lapses of statutes	(2,629		)
Settlements	(22,950		)
Gross tax contingencies—December 31, 2017	$	38,533

_______________________________________________________________________________

(1) This amount includes gross additions related to the Recall Transaction.

The reversal of these reserves of $38,533 ($35,776 net of federal tax benefit) as of December 31, 2017 will be recorded as a reduction of our income tax provision, if sustained. We believe that it is reasonably possible that an amount up to approximately $4,524 of our unrecognized tax positions may be recognized by the end of 2018 as a result of a lapse of statute of limitations or upon closing and settling significant audits in various worldwide jurisdictions. Additionally, we believe that it is reasonably possible that an amount up to $14,020, which is included as a component of accrued expenses (and not included in the above table) in our Consolidated Balance Sheet as of December 31, 2017, could be released by the end of 2018 as a result of the resolution of a tax matter.