Income Taxes

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Income taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

Income before income taxes from continuing operations consisted of the following: 

	Year ended December 31,
	2018			2017			2016
Domestic	$	1,083,578		$	1,725,822		$	1,278,754
International	(35,100		)	(326,036		)	344,351
	$	1,048,478		$	1,399,786		$	1,623,105

 Income tax expense for continuing operations consisted of the following:

	Year ended December 31,
	2018		2017			2016
Current:
Federal	$	140,064	$	330,191		$	322,940
State	32,990		47,228			44,525
International	7,557		3,422			1,928
Total current income tax	180,611		380,841			369,393
Deferred:
Federal	52,034		(98,760		)	88,412
State	21,096		37,347			(28,530		)
International	4,659		4,431			2,486
Total deferred income tax	77,789		(56,982		)	62,368
	$	258,400	$	323,859		$	431,761

Income taxes are allocated between continuing and discontinued operations as follows:

	Year ended December 31,
	2018		2017			2016
Continuing operations	$	258,400	$	323,859		$	431,761
Discontinued operations	99,768		(364,856		)	24,052
	$	358,168	$	(40,997	)	$	455,813

The reconciliation between the Company’s effective tax rate from continuing operations and the U.S. federal income tax rate is as follows:

	Year ended December 31,
	2018		2017		2016
Federal income tax rate	21.0	%	35.0	%	35.0	%
State income taxes, net of federal benefit	4.1		3.7		2.6
Gain on APAC JV ownership changes	—		(0.2	)	(9.9	)
Political advocacy costs	2.3		—		—
APAC investment impairment	—		6.4		—
Impact of 2017 Tax Act	(0.1	)	(20.5	)	—
Other	1.9		2.0		1.8
Impact of noncontrolling interests primarily attributable to non-tax paying entities	(4.6	)	(3.3	)	(2.9	)
Effective tax rate	24.6	%	23.1	%	26.6	%

On December 22, 2017, the President signed into law tax legislation known as the Tax Cuts and Jobs Act ("2017 Tax Act"). Consistent with Securities and Exchange Commission (SEC) Staff Accounting Bulletin No. 118, the Company completed its analysis of certain aspects of the 2017 Tax Act in the prior year and recorded provisional amounts for those items for which the accounting was not complete as of December 31, 2017. As of December 31, 2018, the Company has completed its analysis of these provisional items and recorded immaterial adjustments to the original estimates.

Deferred tax assets and liabilities arising from temporary differences for continuing operations were as follows:

	December 31,
	2018			2017
Receivables	$	19,327		$	19,705
Accrued liabilities	106,506			96,537
Net operating loss carryforwards	117,511			108,429
Other	36,712			37,794
Deferred tax assets	280,056			262,465
Valuation allowance	(70,474		)	(61,282		)
Net deferred tax assets	209,582			201,183
Intangible assets	(555,822		)	(501,763		)
Property and equipment	(118,008		)	(100,376		)
Investments in partnerships	(67,354		)	(61,529		)
Other	(30,934		)	(23,762		)
Deferred tax liabilities	(772,118		)	(687,430		)
Net deferred tax liabilities	$	(562,536	)	$	(486,247	)

 At December 31, 2018, the Company had federal net operating loss carryforwards of approximately $124,935 that expire through 2037, although a substantial amount expire by 2028. The Company also had state net operating loss carryforwards of $459,558 that expire through 2038 and international net operating loss carryforwards of $186,757, some of which have an indefinite life. The utilization of a portion of these losses may be limited in future years based on the profitability of certain entities. The net increase of $9,192 in the valuation allowance is primarily due to newly created net operating loss carryforwards in state and foreign jurisdictions that the Company does not anticipate being able to utilize.

The Company's foreign earnings continue to be indefinitely reinvested as of December 31, 2018. As a result of the passage of the 2017 Tax Act, the Company does not expect such earnings to be taxable if remitted.

Unrecognized tax benefits

A reconciliation of the beginning and ending liability for unrecognized tax benefits that do not meet the more-likely-than-not threshold is as follows:

	Year ended December 31,
	2018			2017
Beginning balance	$	32,776		$	24,066
Additions for tax positions related to current year	6,111			7,606
Additions for tax positions related to prior years	4,134			804
Reductions related to lapse of applicable statute	(338		)	(1,380		)
Impact of 2017 Tax Act	—			3,731
Reductions related to settlements with taxing authorities	(2,301		)	(2,051		)
Ending balance	$	40,382		$	32,776

As of December 31, 2018, the Company’s total liability for unrecognized tax benefits relating to tax positions that do not meet the more-likely-than-not threshold is $40,382, of which $37,538 would impact the Company’s effective tax rate if recognized. This balance represents an increase of $7,606 from the December 31, 2017 balance of $32,776, primarily due to additions for tax positions related to the current year.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. At December 31, 2018 and 2017, the Company had approximately $9,019 and $4,195, respectively, accrued for interest and penalties related to unrecognized tax benefits, net of federal tax benefit.

The Company and its subsidiaries file U.S. federal and state income tax returns and various foreign income tax returns. The Company is no longer subject to U.S. federal and state examinations by tax authorities for years before 2014 and 2009, respectively. In addition to being under audit in various state and local tax jurisdictions, the Company’s federal tax returns are under audit by the Internal Revenue Service for the years 2014-2016.