Income Taxes

Income (loss) from continuing operations before income taxes by geographic area is as follows:



	Years Ended December 31,
	2015		2014			2013
Domestic	$	461,293	$	341,070		$	260,364
Foreign^(a)	12,536		(6,000		)	(9,363		)
	$	473,829	$	335,070		$	251,001


(a)	Inclusive of income (loss) before income taxes from Puerto Rico.

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



	Years Ended December 31,
	2015			2014			2013
Current:
Federal	$	495		$	213		$	684
Foreign	(5,675		)	(6,413		)	(5,110		)
State	(3,981		)	(4,415		)	(12,305		)
Total current	(9,161		)	(10,615		)	(16,731		)
Deferred:
Federal	44,716			23,070			(164,769		)
Foreign	(1,048		)	(819		)	(130		)
State	16,950			(392		)	(9,370		)
Total deferred	60,618			21,859			(174,269		)
Total tax benefit (provision)	$	51,457		$	11,244		$	(191,000	)

A reconciliation between the benefit (provision) for income taxes and the amount computed by applying the federal statutory income tax rate to the income (loss) before income taxes is as follows:



	Years Ended December 31,
	2015			2014			2013
Benefit (provision) for income taxes at statutory rate	$	(165,840	)	$	(117,274	)	$	(87,850	)
Tax effect of foreign income (losses)	(527		)	(4,296		)	(3,277		)
Tax adjustment related to REIT operations	186,649			132,951			—
Tax adjustment related to the REIT election^(a)	—			—			(67,395		)
Tax adjustment related to the inclusion of small cells in the REIT^(b)	33,759			—			—
Expenses for which no federal tax benefit was recognized	(414		)	(463		)	(9,570		)
Valuation allowances	3,000			9,000			—
State tax (provision) benefit, net of federal	1,210			(3,136		)	(14,852		)
Foreign tax	(6,723		)	(7,232		)	(5,240		)
Other	343			1,694			(2,816		)
	$	51,457		$	11,244		$	(191,000	)


(a)	Inclusive of a $39.8 million adjustment during the year ended December 31, 2013 to reclassify a deferred tax charge from AOCI to the provision for income taxes.


(b)	During the fourth quarter of 2015, the Company de-recognized the net deferred tax liabilities related to the Company's small cells previously included in one or more TRSs in conjunction with the inclusion of small cells in the REIT in January 2016.

The components of the net deferred income tax assets and liabilities are as follows:



	December 31,
	2015			2014
Deferred income tax liabilities:
Property and equipment	$	334		$	167,491
Deferred site rental receivable	5,742			18,320
Intangible assets	—			102,624
Total deferred income tax liabilities	6,076			288,435
Deferred income tax assets:
Intangible assets	40,654			—
Net operating loss carryforwards	7,891			133,096
Deferred ground lease payable	1,312			1,627
Accrued liabilities	4,183			158,813
Receivables allowance	196			1,459
Other	1,252			1,278
Valuation allowances	(1,994		)	(21,038		)
Total deferred income tax assets, net	53,494			275,235
Net deferred income tax asset (liabilities)	$	47,418		$	(13,200	)

During the fourth quarter of 2015, the Company completed the necessary steps to include its small cells that were previously included in one or more TRSs in the REIT effective January 2016. See note 19. As a result, during the fourth quarter of 2015, the Company de-recognized the net deferred tax liabilities in conjunction with the inclusion of small cells in the REIT in January 2016, which resulted in a net non-cash income tax benefit of $33.8 million.

During the fourth quarter of 2013, the Company completed the steps necessary to qualify to operate as a REIT for U.S. federal income tax purposes and received final approval from the Company's board of directors. As a result, the Company de-recognized the net deferred tax assets and liabilities related to the entities included in the REIT, which resulted in net non-cash income tax charge of $67.4 million in conjunction with the REIT conversion. Included in the REIT conversion charge of $67.4 million is a $39.8 million adjustment to reclassify a deferred tax charge from AOCI to the provision for income taxes.

During 2013, in connection with completing the steps necessary to qualify to operate as a REIT, the Company reversed $29.4 million of valuation allowance associated with capital loss carryforwards as the Company generated sufficient capital gains in 2013 to fully realize these capital loss carryforwards. Also, during 2013, the Company recorded a valuation allowance of $12.0 million against federal NOLs of its TRSs as the Company determined that a portion of its TRSs federal NOLs more likely than not will not be realized.

The components of the net deferred income tax assets (liabilities) are as follows:



	December 31, 2015									December 31, 2014
Classification	Gross			Valuation Allowance			Net			Gross		Valuation Allowance			Net
Federal	$	48,273		$	—		$	48,273		$	6,557	$	(3,000	)	$	3,557
State	1,203			—			1,203			462		(16,208		)	(15,746		)
Foreign	(64		)	(1,994		)	(2,058		)	819		(1,830		)	(1,011		)
Total	$	49,412		$	(1,994	)	$	47,418		$	7,838	$	(21,038	)	$	(13,200	)

At December 31, 2015, the Company had U.S. federal and state NOLs of approximately $1.3 billion and $0.6 billion, respectively, which are available to offset future taxable income. These amounts include $244.6 million of losses related to stock-based compensation. If not utilized, the Company's U.S. federal NOLs expire starting in 2024 and ending in 2032, and the state NOLs expire starting in 2016 and ending in 2035. The utilization of the NOLs is subject to certain limitations. The Company's U.S. federal and state income tax returns generally remain open to examination by taxing authorities until three years after the applicable NOLs have been used or expired. The remaining valuation allowance relates to certain foreign net deferred tax assets (primarily NOLs).

As of December 31, 2015, the total amount of unrecognized tax benefits that would impact the effective tax rate, if recognized, was $6.7 million. The aggregate changes in the balance of unrecognized tax benefits are as follows:



	Years Ended December 31,
	2015			2014
Balance at beginning of year	$	8,333		$	14,089
Additions based on prior year tax positions	212			286
Reductions as a result of the lapse of statute limitations	(1,775		)	(6,042		)
Balance at end of year	$	6,770		$	8,333

From time to time, the Company is subject to examinations by various tax authorities in jurisdictions in which the Company has business operations. At this time, the Company is not subject to an IRS examination. The Australian Taxation Office is conducting an audit of the tax consequences for Australian tax purposes of the Company’s sale of CCAL. The Company regularly assesses the likelihood of additional assessments in each of the tax jurisdictions. The Company believes it has adequately provided for uncertain tax positions and does not believe assessments, if any, arising from current or future examination or audits will have a material effect on the Company's financial statements.

As of December 31, 2015, the Company's deferred tax assets are included in "long-term prepaid rent, deferred financing costs and other assets, net" and the Company's deferred tax liabilities are included in "other long-term liabilities" on the Company's consolidated balance sheet. See note 2 for a discussion of recently adopted guidance on the presentation of deferred tax assets and deferred tax liabilities.