The Company’s income before income taxes consisted of the following (in thousands):

	Years Ended December 31,
	2019		2018		2017
Domestic (U.S., state and local)	$	38,672	$	6,971	$	9,662
Foreign		47,251		49,946		71,645
	$	85,923	$	56,917	$	81,307

Significant components of the income tax provision were as follows (in thousands):

	Years Ended December 31,
	2019			2018			2017
Current:
U.S. federal	$	8,190		$	(492	)	$	29,986
State and local		1,506			54			855
Foreign		11,864			9,938			10,342
Total current provision for income taxes		21,560			9,500			41,183
Deferred:
U.S. federal	$	(1,238	)	$	(498	)		7,919
State and local		14			(85	)		922
Foreign		1,506			(926	)		(933	)
Total deferred provision (benefit) for income taxes		282			(1,509	)		7,908
	$	21,842		$	7,991		$	49,091

The temporary differences that gave rise to significant portions of the deferred income tax provision (benefit) were as follows (in thousands):

	Years Ended December 31,
	2019			2018			2017
Net operating loss and tax credit carryforwards	$	21,846		$	(613	)	$	1,231
Accrued expenses/liabilities		2,166			(2,512	)		16,470
Depreciation and amortization		(5,864	)		101			(10,571	)
Valuation allowance		(19,006	)		1,558			(1,441	)
Deferred statutory income		846			6			2,479
Other		294			(49	)		(260	)
	$	282		$	(1,509	)	$	7,908

The reconciliation of the income tax provision computed at the U.S. federal statutory tax rate to the Company’s effective income tax provision was as follows (in thousands):

	Years Ended December 31,
	2019			2018			2017
Tax at U.S. federal statutory tax rate	$	18,044		$	11,953		$	28,457
State income taxes, net of federal tax benefit		1,520			(31	)		594
Foreign rate differential		(5,119	)		(4,620	)		(14,736	)
Tax holidays		(3,080	)		(4,050	)		(2,951	)
Permanent differences		13,257			12,150			8,749
Tax credits		(8,218	)		(8,979	)		(5,102	)
Foreign withholding and other taxes		2,834			(840	)		2,661
Valuation allowance		781			1,549			(1,689	)
Uncertain tax positions		402			771			(1,812	)
Statutory tax rate changes		475			96			2,536
Change in assertion related to foreign earnings distribution		952			—			—
2017 Tax Reform Act		—			(217	)		32,705
Other		(6	)		209			(321	)
Total provision for income taxes	$	21,842		$	7,991		$	49,091

Withholding taxes on offshore cash movements assessed by certain foreign governments of $3.0 million, $2.0 million and $1.7 million were included in the provision for income taxes in the accompanying Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017, respectively.

On December 22, 2017, the 2017 Tax Reform Act was signed into law making significant changes to the Internal Revenue Code. Changes included, but are not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a participation exemption regime, and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. We estimated our provision for income taxes in accordance with the 2017 Tax Reform Act and guidance available upon enactment and as a result recorded $32.7 million as additional income tax expense in the fourth quarter of 2017, the period in which the legislation was enacted. The $32.7 million estimate included the provisional amount related to the one-time transition tax on the mandatory deemed repatriation of foreign earnings of $32.7 million based on cumulative foreign earnings of $531.8 million and $1.0 million of foreign withholding taxes on certain anticipated distributions. The provisional tax expense was partially offset by a provisional benefit of $1.0 million related to the remeasurement of certain deferred tax assets and liabilities, based on the rates at which they are expected to reverse in the future. The Company recorded a $0.2 million decrease to the provisional amounts during the year ended December 31, 2018 upon finalizing the impact of the 2017 Tax Reform Act.

The Company provides U.S. income taxes on the earnings of foreign subsidiaries unless they are exempted from taxation as a result of the new territorial tax system. During the fourth quarter of 2019, we partially reversed our permanent reinvestment assertion in connection with plans to distribute cash from certain of our foreign subsidiaries in 2020 or subsequent years. In connection with this change in assertion, the Company recorded $1.0 million of withholding tax. No additional income taxes have been provided for any remaining reinvested earnings or outside basis differences inherent in these entities as these amounts continue to be indefinitely reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability related to any remaining outside basis

difference in these entities is not practicable due to the inherent complexity of the multi-national tax environment in which the Company operates.

On December 22, 2017, the SEC issued SAB 118 to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Reform Act. In accordance with SAB 118, we determined that the deferred tax benefit recorded in connection with the remeasurement of certain deferred tax assets and liabilities and the current tax expense recorded in connection with the transition tax on the mandatory deemed repatriation of foreign earnings was a provisional amount and a reasonable estimate at December 31, 2017. Final computations were completed during the fourth quarter of 2018, resulting in the $0.2 million decrease to the provisional amount discussed above.

The 2017 Tax Reform Act instituted a number of new provisions effective January 1, 2018, including GILTI, Foreign Derived Intangible Income (“FDII”) and Base Erosion and Anti-Abuse Tax (“BEAT”). Based on the guidance, interpretations, and data available as of December 31, 2019, the Company has determined the impact of these measures is immaterial to its tax provision in 2019.

The Company has been granted tax holidays in the Philippines, Colombia, Costa Rica and El Salvador, some of which have various expiration dates ranging from 2021 through 2028. In some cases, the tax holidays expire without possibility of renewal. In other cases, the Company expects to renew these tax holidays, but there are no assurances from the respective foreign governments that they will renew them. This could potentially result in future adverse tax consequences in the local jurisdiction, the impact of which is not practicable to estimate due to the inherent complexity of estimating critical variables such as long-term future profitability, tax regulations and rates in the multi-national tax environment in which the Company operates. The Company’s tax holidays decreased the provision for income taxes by $3.1 million ($0.07 per diluted share), $4.1 million ($0.10 per diluted share) and $3.0 million ($0.07 per diluted share) for the years ended December 31, 2019, 2018 and 2017, respectively.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income taxes. The temporary differences that gave rise to significant portions of the deferred tax assets and liabilities are presented below (in thousands):

	December 31,
	2019			2018
Deferred tax assets:
Net operating loss and tax credit carryforwards	$	13,310		$	34,565
Valuation allowance		(12,666	)		(32,299	)
Accrued expenses		9,798			9,500
Deferred revenue and customer liabilities		3,346			4,138
Depreciation and amortization		3,224			1,693
Other		129			413
		17,141			18,010
Deferred tax liabilities:
Depreciation and amortization		(14,919	)		(13,199	)
Deferred statutory income		(862	)		(838	)
Accrued liabilities		(4,384	)		(1,779	)
Other		(189	)		(253	)
		(20,354	)		(16,069	)
Net deferred tax assets (liabilities)	$	(3,213	)	$	1,941

There are approximately $79.9 million of income tax loss carryforwards as of December 31, 2019, with varying expiration dates, approximately $48.9 million relating to foreign operations, $30.7 million relating to U.S. state operations and $0.3 million related to U.S. federal operations. With respect to foreign operations, $24.4 million of the net operating loss carryforwards have an indefinite expiration date and the remaining $24.5 million net operating

loss carryforwards have varying expiration dates through December 2040. Regarding the foreign and U.S. state aforementioned tax loss carryforwards, no benefit has been recognized for $41.8 million and $22.8 million, respectively, as the Company does not anticipate that the losses will more likely than not be fully utilized.

During the year ended December 31, 2019, the Company completed a reorganization of certain of its foreign subsidiaries that resulted in the derecognition of the related deferred tax assets for net operating losses which were subject to a valuation allowance. As a result, the Company reduced both its net operating loss deferred tax assets and valuation allowance by approximately $19.7 million.

The Company accrued $2.7 million as of both December 31, 2019 and 2018, excluding penalties and interest, for the liability for unrecognized tax benefits, which was included in “Long-term income tax liabilities” in the accompanying Consolidated Balance Sheets. Had the Company recognized these tax benefits, approximately $2.7 million, along with the related interest and penalties, would have favorably impacted the effective tax rate in both 2019 and 2018. The Company does not anticipate that any of the unrecognized tax benefits will be recognized in the next twelve months.

The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. The Company had $1.1 million and $0.6 million accrued for interest and penalties as of December 31, 2019 and 2018, respectively. Of the accrued interest and penalties at December 31, 2019 and 2018, $0.6 million and $0.4 million, respectively, relate to statutory penalties. The amount of interest and penalties, net, included in the provision for income taxes in the accompanying Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017 was $0.4 million, $0.7 million and $(9.5) million, respectively.

The tabular reconciliation of the amounts of unrecognized net tax benefits is presented below (in thousands):

	Years Ended December 31,
	2019			2018			2017
Balance at the beginning of the period	$	2,720		$	1,342		$	8,531
Current period tax position increases		—			2,950			—
Decreases from settlements with tax authorities		—			(191	)		(10,865	)
Decreases due to lapse in applicable statute of limitations		—			(1,310	)		(466	)
Foreign currency translation increases (decreases)		(9	)		(71	)		4,142
Balance at the end of the period	$	2,711		$	2,720		$	1,342

The Company received assessments for the Canadian 2003-2009 audit. Requests for Competent Authority Assistance were filed with both the Canadian Revenue Agency and the U.S. Internal Revenue Service and the Company paid mandatory security deposits to Canada as part of this process. As of June 30, 2017, the Company determined that all material aspects of the Canadian audit were effectively settled pursuant to ASC 740. As a result, the Company recognized an income tax benefit of $1.2 million, net of the U.S. tax impact, at that time and the deposits were applied against the anticipated liability. During the year ended December 31, 2018, the Company finalized procedures ancillary to the Canadian audit and recognized an additional $2.8 million income tax benefit due to the elimination of certain assessed penalties, interest and withholding taxes.

The Company is currently under audit in several tax jurisdictions. The Company believes it has adequate reserves related to all matters pertaining to these audits. Should the Company experience unfavorable outcomes from these audits, such outcomes could have a significant impact on its financial condition, results of operations and cash flows.

The Company and its subsidiaries file federal, state and local income tax returns as required in the U.S. and in various foreign tax jurisdictions. The major tax jurisdictions and tax years that are open and subject to examination by the respective tax authorities as of December 31, 2019 are tax years 2016 through 2019 for the U.S.