Income Taxes | Income Taxes The Company recorded provisional amounts and a reasonable estimate in its provision for income taxes and estimated deferred tax assets, for the impact of TCJA. The provision (benefit) for income taxes for the years ended December 31, 2017 , 2016 and 2015 , consisted of the following (in thousands): Years Ended December 31, 2017 2016 2015 Current: Federal $ 133,097 $ 156,937 $ 181,640 State 24,944 34,927 36,281 Foreign 27,079 20,725 13,892 Deferred: Federal and state 41,717 (3,785 ) (8,398 ) Foreign 95 1,917 (181 ) $ 226,932 $ 210,721 $ 223,234 Income before the provision for income taxes for the years ended December 31, 2017 , 2016 and 2015 , consisted of the following (in thousands): Years Ended December 31, 2017 2016 2015 Domestic $ 445,418 $ 494,890 $ 528,916 Foreign 72,098 59,220 52,114 $ 517,516 $ 554,110 $ 581,030 The income taxes shown above varied from the statutory federal income tax rates for these periods as follows: Years Ended December 31, 2017 2016 2015 Federal U.S. income tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal tax benefit 3.7 4.2 4.2 Non-deductible expenses 0.4 0.5 0.5 Non-U.S. income taxed at different rates, net of foreign tax credits — (0.6 ) 0.1 Federal tax credits (1.3 ) (0.8 ) (0.6 ) Tax impact of uncertain tax positions 0.2 — (0.2 ) Valuation allowance release, net — (0.1 ) (0.5 ) Tax effects of TCJA 6.5 — — Other, net (0.6 ) (0.2 ) (0.1 ) Effective tax rate 43.9 % 38.0 % 38.4 % In accordance with TCJA, the Company remeasured certain deferred tax assets and liabilities, based on the rates at which they are expected to reverse in the future. The Company is still analyzing certain aspects of TCJA and refining our calculation, which could potentially affect the measurement of these balances or give rise to different deferred tax amounts. The provisional amount and reasonable estimate recorded related to the re-measurement of the Company’s deferred tax balance was $34.6 million . The Company recorded provisional amounts and a reasonable estimate for the one-time transition tax on its total post-1986 foreign earnings and profits, as required by TCJA. A provisional amount of $7.7 million in connection with the transition tax is offset by foreign tax credits in the Company's current income tax expense. The Company anticipates additional guidance will be released by the government throughout 2018 that may require the Company to adjust this estimate during the measurement period prescribed by SAB 118. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis differences inherent in our foreign entities, as the Company is still in the process of evaluating its foreign cash needs, and how much, if any, of the amount of earnings should be considered indefinitely reinvested. The deferred portion of the tax provision (benefit) consisted of the following (in thousands): Years Ended December 31, 2017 2016 2015 Amortization of franchise rights $ 495 $ 500 $ 514 Amortization of other intangibles 1,193 1,221 1,590 Accrued expenses, deducted for tax when paid 15,213 (6,889 ) (17,664 ) Capitalized costs for books, deducted for tax (5,790 ) 5,901 5,315 Depreciation (4,079 ) (2,405 ) (5,932 ) Federal impact of unrecognized tax benefits 39 75 1,058 Foreign tax credit carryforwards — — 3,636 Tax effects of TCJA 34,633 — — Other, net 108 (271 ) 2,904 $ 41,812 $ (1,868 ) $ (8,579 ) The components of the deferred income tax amounts at December 31, 2017 and 2016 , were as follows (in thousands): December 31, 2017 2016 Deferred Income Tax Assets Provision for bad debts $ 6,794 $ 10,510 Deferred compensation and other benefit obligations 68,101 112,811 Workers’ compensation 3,127 5,634 Stock-based compensation 8,614 16,772 Credits and net operating loss carryforwards 30,087 30,534 Other 13,343 18,116 Total deferred income tax assets 130,066 194,377 Deferred Income Tax Liabilities Amortization of intangible assets (20,220 ) (28,681 ) Property and equipment basis differences (4,421 ) (16,640 ) Other (10,847 ) (11,658 ) Total deferred income tax liabilities (35,488 ) (56,979 ) Valuation allowance (20,178 ) (18,907 ) Total deferred income tax assets, net $ 74,400 $ 118,491 Credits and net operating loss carryforwards primarily include net operating losses in foreign countries of $26.4 million that expire in 2018 and later ; and California enterprise zone tax credits of $3.5 million that expire in 2023 . Of the $3.5 million of California enterprise zone tax credits, the Company expects that it will utilize $2.0 million of these credits prior to expiration. Valuation allowances of $18.7 million have been established for net operating loss carryforwards and other deferred items in foreign countries. In addition, a valuation allowance of $1.5 million has been established for California enterprise zone tax credits. FASB authoritative guidance prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The literature also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The following table reconciles the total amounts of gross unrecognized tax benefits from January 1, 2015 to December 31, 2017 (in thousands): December 31, 2017 2016 2015 Balance at beginning of period $ 731 $ 814 $ 4,573 Gross increases—tax positions in prior years 1,503 92 — Gross decreases—tax positions in prior years (257 ) — (1,807 ) Gross increases—tax positions in current year 956 114 120 Settlements (40 ) — (520 ) Lapse of statute of limitations (7 ) (289 ) (1,552 ) Balance at end of period $ 2,886 $ 731 $ 814 The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $2.8 million , $0.5 million and $0.5 million for 2017 , 2016 and 2015 , respectively. The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. The total amount of interest and penalties accrued is $0.1 million as of December 31, 2017 . The total amount of interest and penalties accrued as of December 31, 2016 is $0.1 million , including a $0.1 million reduction recorded in income tax expense during the year. The total amount of interest and penalties accrued as of December 31, 2015 , was $0.2 million , including a $2.3 million reduction recorded in income tax expense during the year. The Company believes it is reasonably possible that the settlement of certain tax uncertainties could occur within the next twelve months; accordingly, $0.1 million of the unrecognized gross tax benefit has been classified as a current liability as of December 31, 2017 . This amount primarily represents unrecognized tax benefits composed of items related to assessed state income tax audits and negotiations. The Company’s major income tax jurisdictions are the United States, Australia, Belgium, Canada, France, Germany and the United Kingdom. For U.S. federal income tax, the Company remains subject to examination for 2014 and subsequent years. For major U.S. states, with few exceptions, the Company remains subject to examination for 2013 and subsequent years. Generally, for the foreign countries, the Company remains subject to examination for 2010 and subsequent years. |