INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2016

The income tax expense (benefit) for the year ended December 31, 2016 is as follows (in thousands):



	Current			Deferred			Total
International	$	627,718		$	(14,359	)	$	613,359
U.S. Federal	63,613			(32,405		)	31,208
U.S. State	(1,175		)	(65,141		)	(66,316		)
Total	$	690,156		$	(111,905	)	$	578,251

The income tax expense (benefit) for the year ended December 31, 2015 is as follows (in thousands):



	Current		Deferred			Total
International	$	526,052	$	(17,789	)	$	508,263
U.S. Federal	88,237		(68,696		)	19,541
U.S. State	24,006		25,150			49,156
Total	$	638,295	$	(61,335	)	$	576,960

The income tax expense (benefit) for the year ended December 31, 2014 is as follows (in thousands):



	Current		Deferred			Total
International	$	496,719	$	(10,613	)	$	486,106
U.S. Federal	10,316		47,847			58,163
U.S. State	28,953		(5,527		)	23,426
Total	$	535,988	$	31,707		$	567,695

Tax effects of temporary differences that give rise to significant portions of deterred tax assets and liabilities

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities at December 31, 2016 and 2015 are as follows (in thousands):



	2016			2015
Deferred tax assets/(liabilities):
Net operating loss carryforward — U.S.	$	15,977		$	59,220
Net operating loss carryforward — International	18,371			18,153
Accrued expenses	72,631			61,703
Stock-based compensation and other stock based payments	60,937			77,761
Other	—			8,001
Subtotal	167,916			224,838

Discount on convertible notes	(77,845		)	(112,886		)
Intangible assets and other	(740,329		)	(822,685		)
Euro denominated debt	(117,737		)	(92,230		)
Fixed assets	(2,245		)	(3,658		)
Other	(3,958		)	—
Less valuation allowance on deferred tax assets	(24,475		)	(64,845		)
Net deferred tax liabilities⁽¹⁾	$	(798,673	)	$	(871,466	)

(1) Includes deferred tax assets of $23.7 million and $21.1 million as of December 31, 2016 and 2015, respectively, reported in "Other assets" in the Consolidated Balance Sheets.

Schedule of effective income tax rate reconciliation

The effective income tax rate of the Company is different from the amount computed using the expected U.S. statutory federal rate of 35% as a result of the following items (in thousands):



	2016			2015			2014
Income tax expense at federal statutory rate	$	949,633		$	1,094,912		$	1,046,307
Adjustment due to:
Foreign rate differential	(377,542		)	(316,078		)	(289,692		)
Innovation Box Tax benefit	(324,633		)	(260,193		)	(233,545		)
Impairment of goodwill and cost-method investment	343,484			—			—
Other	(12,691		)	58,319			44,625
Income tax expense	$	578,251		$	576,960		$	567,695

Reconciliation of unrecognized tax benefits

The following is a reconciliation of the total beginning and ending amount of unrecognized tax benefits (in thousands):



	2016			2015			2014
Unrecognized tax benefit — January 1	$	42,594		$	52,356		$	22,104
Gross increases — tax positions in current period	2,468			3,411			9,305
Gross increases — tax positions in prior periods	859			4,305			6,569
Increase acquired in business combination	—			—			17,767
Gross decreases — tax positions in prior periods	(217		)	(10,365		)	(2,164		)
Reduction due to lapse in statute of limitations	(9,077		)	(7,113		)	(346		)
Reduction due to settlements during the current period	(3,912		)	—			(879		)
Unrecognized tax benefit — December 31	$	32,715		$	42,594		$	52,356