INCOME TAXES (Tables)
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12 Months Ended |
Dec. 31, 2017 |
Income Tax Disclosure [Abstract] |
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Income tax expense (benefit) |
The income tax expense (benefit) for the year ended December 31, 2017 is as follows (in thousands): | | | | | | | | | | | | | | Current | | Deferred | | Total | International | $ | 755,836 |
| | $ | (10,361 | ) | | $ | 745,475 |
| U.S. Federal | 1,327,663 |
| | (57,350 | ) | | 1,270,313 |
| U.S. State | 6,523 |
| | 35,246 |
| | 41,769 |
| Total | $ | 2,090,022 |
| | $ | (32,465 | ) | | $ | 2,057,557 |
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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 |
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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 |
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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, 2017 and 2016 are as follows (in thousands): | | | | | | | | | | 2017 | | 2016 | Deferred tax assets/(liabilities): | |
| | |
| Net operating loss carryforward — U.S. | $ | 70,750 |
| | $ | 15,977 |
| Net operating loss carryforward — International | 27,831 |
| | 18,371 |
| Accrued expenses | 57,524 |
| | 72,631 |
| Stock-based compensation and other stock based payments | 48,104 |
| | 60,937 |
| Euro denominated debt | 57,740 |
| | — |
| Fixed assets | 8,600 |
| | — |
| Subtotal - deferred tax assets | 270,549 |
| | 167,916 |
| | | | | Discount on convertible notes | (32,810 | ) | | (77,845 | ) | Intangible assets and other | (517,353 | ) | | (740,329 | ) | Euro denominated debt | — |
| | (117,737 | ) | Fixed assets | — |
| | (2,245 | ) | State income tax on accumulated unremitted international earnings | (36,616 | ) | | — |
| Unrealized gain on investments | (70,408 | ) | | — |
| Other | (9,480 | ) | | (3,958 | ) | Subtotal - deferred tax liabilities | (666,667 | ) | | (942,114 | ) | Valuation allowance on deferred tax assets | (43,694 | ) | | (24,475 | ) | Net deferred tax liabilities (1) | $ | (439,812 | ) | | $ | (798,673 | ) |
(1) Includes deferred tax assets of $41.3 million and $23.7 million as of December 31, 2017 and 2016, respectively, reported in "Other assets" in the Consolidated Balance Sheets.
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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): | | | | | | | | | | | | | | 2017 | | 2016 | | 2015 | Income tax expense at federal statutory rate | $ | 1,539,413 |
| | $ | 949,633 |
| | $ | 1,094,912 |
| Adjustment due to: | |
| | |
| | |
| Foreign rate differential | (458,252 | ) | | (377,542 | ) | | (316,078 | ) | Innovation Box Tax benefit | (397,074 | ) | | (324,633 | ) | | (260,193 | ) | Impairment of goodwill and cost-method investment | — |
| | 343,484 |
| | — |
| Tax Act - Remeasurement of deferred tax balances | (216,572 | ) | | — |
| | — |
| Tax Act - U.S. transition tax and other transition impacts | 1,562,532 |
| | — |
| | — |
| Other | 27,510 |
| | (12,691 | ) | | 58,319 |
| Income tax expense | $ | 2,057,557 |
| | $ | 578,251 |
| | $ | 576,960 |
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Reconciliation of unrecognized tax benefits |
The following is a reconciliation of the total beginning and ending amount of unrecognized tax benefits (in thousands): | | | | | | | | | | | | | | 2017 | | 2016 | | 2015 | Unrecognized tax benefit — January 1 | $ | 32,715 |
| | $ | 42,594 |
| | $ | 52,356 |
| Gross increases — tax positions in current period | 5,119 |
| | 2,468 |
| | 3,411 |
| Gross increases — tax positions in prior periods | 5,822 |
| | 859 |
| | 4,305 |
| Gross decreases — tax positions in prior periods | (9,202 | ) | | (217 | ) | | (10,365 | ) | Reduction due to lapse in statute of limitations | (1,009 | ) | | (9,077 | ) | | (7,113 | ) | Reduction due to settlements during the current period | (1,050 | ) | | (3,912 | ) | | — |
| Unrecognized tax benefit — December 31 | $ | 32,395 |
| | $ | 32,715 |
| | $ | 42,594 |
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