Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For the three and six months ended June 30, 2019, income tax benefit was $1.4 million and income tax expense was $45.1 million, respectively, representing a negative effective tax rate of 1% and an effective tax rate of 14%, respectively, as compared to the federal statutory rate of 21%. For the three and six months ended June 30, 2019, the effective tax rate differs from the federal statutory rate due primarily to a tax benefit of $25.0 million resulting from a decrease in valuation allowances for foreign tax assets, a tax benefit of $7.2 million and $5.6 million relating to uncertain tax positions (including accrued interest) partially offset by state and local income tax expense of $4.1 million and $7.3 million, respectively. The decrease in the valuation allowance is primarily due to the expected utilization of foreign net operating loss carryforwards resulting from the planned implementation of certain tax planning strategies. The tax benefit relating to uncertain tax positions is primarily due to an audit settlement and the filing of state income tax returns under a voluntary disclosure agreement.

For the three and six months ended June 30, 2018, income tax expense was $32.5 million and $89.4 million, respectively, representing an effective tax rate of 23% and 25%, respectively, as compared to the federal statutory rate of 21%. For the three months ended June 30, 2018, the effective tax rate differs from the federal statutory rate due primarily to state and local income tax expense of $2.3 million. For the six months ended June 30, 2018, the effective tax rate differs from the federal statutory rate due primarily to tax expense of $16.1 million for an increase in valuation allowances for foreign taxes and U.S. foreign tax credits; state and local income tax expense of $6.2 million; a tax benefit of $8.3 million for the one-time rate change on deferred tax assets and liabilities that resulted from the extension of certain television production cost deductions included in the Bipartisan Budget Act of 2018 (enacted February 9, 2018); and a tax benefit from foreign subsidiary earnings indefinitely reinvested outside the U.S. of $5.8 million.

At June 30, 2019, the Company had foreign tax credit carry forwards of approximately $27.5 million, expiring on various dates from 2022 through 2029. These carryforwards have been reduced by a valuation allowance of $27.5 million as it is more likely than not that these carry forwards will not be realized. For the six months ended June 30, 2019, $0.7 million relating to amortization of tax deductible second component goodwill was realized as a reduction in tax liability (as determined on a 'with-and-without' approach).