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INCOME TAXES
 12 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES:
 
The provision (benefit) for income taxes consisted of the following for the years ended December 31, 2018, 2017, and 2016 (in thousands):
 
 
2018
 
2017
 
2016
Current provision for income taxes:
 

 
 

 
 

Federal
$
58,785

 
$
77,477

 
$
113,737

State
8,061

 
6,625

 
2,273

 
66,846

 
84,102

 
116,010

Deferred (benefit) provision for income taxes:
 

 
 

 
 

Federal
(68,802
)
 
(196,468
)
 
8,555

State
(33,819
)
 
37,006

 
(2,437
)
 
(102,621
)
 
(159,462
)
 
6,118

(Benefit) provision for income taxes
$
(35,775
)
 
$
(75,360
)
 
$
122,128


 
The following is a reconciliation of federal income taxes at the applicable statutory rate to the recorded provision:
 
2018
 
2017
 
2016
Federal statutory rate
21.0
 %
 
35.0
 %
 
35.0
 %
Adjustments:
 

 
 

 
 

Federal tax credits (a)
(19.9
)%
 
(2.2
)%
 
(0.4
)%
State income taxes, net of federal tax benefit (b)
(9.0
)%
 
5.0
 %
 
0.2
 %
Non-deductible items (c)
(4.9
)%
 
1.5
 %
 
1.0
 %
Effect of consolidated VIEs (d)
1.6
 %
 
1.0
 %
 
1.2
 %
Federal tax reform (e)
(1.4
)%
 
(54.3
)%
 
—
 %
Domestic production activities deduction
—
 %
 
(1.7
)%
 
(3.4
)%
Other
0.9
 %
 
0.6
 %
 
(0.3
)%
Effective income tax rate
(11.7
)%
 
(15.1
)%
 
33.3
 %
 

(a)
During the years ended December 31, 2018 and 2017, we recorded a benefit of $58.2 million and $8.3 million, respectively, related to investments in sustainability initiatives whose activities qualify for federal income tax credits through 2021.
(b)
Included in state income taxes are deferred income tax effects related to certain acquisitions, intercompany mergers and/or impact of changes in apportionment.
(c)
Our 2018 income tax provision includes a $17.7 million permanent benefit recognized from an IRS tax ruling on the treatment of the gain from the sale of certain broadcast spectrum in connection with the Broadcast Incentive Auction, as discussed in Note 2. Acquisitions and Dispositions of Assets.
(d)
Certain of our consolidated VIEs incur expenses that are not attributable to non-controlling interests because we absorb certain related losses of the VIEs.  These expenses are not tax-deductible by us, and since these VIEs are treated as pass-through entities for income tax purposes, deferred income tax benefits are not recognized.
(e)
Our 2018 and 2017 income tax provisions include a non-recurring benefit of $4.3 million and $272.1 million, respectively, to reflect the effect of the U.S. Tax Cuts and Jobs Act (Tax Reform) enacted on December 22, 2017.
Temporary differences between the financial reporting carrying amounts and the tax bases of assets and liabilities give rise to deferred taxes.  Total deferred tax assets and deferred tax liabilities as of December 31, 2018 and 2017 were as follows (in thousands):
 
2018
 
2017
Deferred Tax Assets:
 

 
 

Net operating losses:
 

 
 

Federal
$
28,630

 
$
34,861

State
74,339

 
75,754

Goodwill and intangible assets
12,587

 
14,389

Other
47,361

 
33,462

 
162,917

 
158,466

Valuation allowance for deferred tax assets
(65,887
)
 
(62,865
)
Total deferred tax assets
$
97,030

 
$
95,601

Deferred Tax Liabilities:
 

 
 

Goodwill and intangible assets
$
(427,339
)
 
$
(514,776
)
Property & equipment, net
(80,461
)
 
(80,630
)
Other
(2,483
)
 
(15,431
)
Total deferred tax liabilities
(510,283
)
 
(610,837
)
Net deferred tax liabilities
$
(413,253
)
 
$
(515,236
)

At December 31, 2018, the Company had approximately $136.3 million and $1.5 billion of gross federal and state net operating losses, respectively. Those losses will expire during various years from 2019 to 2038, and some of them are subject to annual limitations under the Internal Revenue Code Section 382 and similar state provisions.  As discussed in Income taxes under Note 1. Nature of Operations and Summary of Significant Accounting Policies, we establish valuation allowances in accordance with the guidance related to accounting for income taxes.  As of December 31, 2018, a valuation allowance has been provided for deferred tax assets related to a substantial portion of our available state net operating loss carryforwards based on past operating results, expected timing of the reversals of existing temporary book/tax basis differences, alternative tax strategies and projected future taxable income. Although realization is not assured for the remaining deferred tax assets, we believe it is more likely than not that they will be realized in the future.  During the year ended December 31, 2018, we increased our valuation allowance by $3.0 million to $65.9 million. The increase in valuation allowance was primarily due to uncertainty in the realizability of a state deferred tax asset generated by a subsidiary in 2018. During the year ended December 31, 2017, we increased our valuation allowance by $11.1 million to $62.9 million. The increase in valuation allowance was primarily due to the impact of Tax Reform on the federal tax effect on certain state net operating loss carryforwards, for which a full valuation allowance was provided.
 
The following table summarizes the activity related to our accrued unrecognized tax benefits (in thousands):
 
2018
 
2017
 
2016
Balance at January 1,
$
7,237

 
$
4,739

 
$
3,257

Additions related to prior year tax positions
120

 
2,019

 
420

Additions related to current year tax positions
1,600

 
610

 
2,053

Reductions related to prior year tax positions
(453
)
 
—

 
—

Reductions related to settlements with taxing authorities
(436
)
 
(131
)
 
—

Reductions related to expiration of the applicable statute of limitations
(1,493
)
 
—

 
(991
)
Balance at December 31,
$
6,575

 
$
7,237

 
$
4,739


We are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions.  Our 2013 through 2015 federal tax returns are currently under audit, and several of our subsidiaries are currently under state examinations for various years. Our 2015 and subsequent federal and/or state tax returns remain subject to examination by various tax authorities.  Some of our pre-2015 federal and/or state tax returns may also be subject to examination. We do not anticipate the resolution of these matters will result in a material change to our consolidated financial statements.  In addition, we do not believe that our liability for unrecognized tax benefits would be materially impacted, in the next twelve months, as a result of expected statute of limitations expirations, the application of limits under available state administrative practice exceptions, and the resolution of examination issues and settlements with federal and certain state tax authorities.