INCOME TAXES (Tables)

12 Months Ended

Mar. 31, 2019

Schedule of Income before Income Tax Expense

Income (loss) before income tax expense (benefit) consisted of the following (in thousands):



	Year Ended March 31,
	2019			2018			2017
Domestic	$	(107,088	)	$	(35,032	)	$	32,475
Foreign	14,176			16,373			19,710
	$	(92,912	)	$	(18,659	)	$	52,185

Summary of Components of Income Tax Expense

The components of the income tax expense (benefit) are as follows (in thousands):



	Year Ended March 31,
	2019			2018			2017
Current income tax expense (benefit):
Federal	$	3,902		$	14,191		$	15,912
State	(136		)	1,925			3,152
Foreign	10,618			12,249			11,175
	14,384			28,365			30,239
Deferred income tax expense (benefit):
Federal	(25,347		)	(113,122		)	(8,278		)
State	(3,845		)	(10,037		)	3,578
Foreign	(4,780		)	(3,677		)	(6,645		)
	(33,972		)	(126,836		)	(11,345		)
	$	(19,588	)	$	(98,471	)	$	18,894

Schedule of Federal Statutory Income Tax Rate to Effective Tax Rate

The income tax expense (benefit) computed using the federal statutory income tax rate differs from NetScout's effective tax rate primarily due to the following:



	Year Ended March 31,
	2019		2018		2017
Statutory U.S. federal tax rate	21.0	%	31.6	%	35.0	%
State taxes, net of federal tax effect	3.4		6.9		9.7
Research and development tax credits	7.1		39.5		(8.2	)
Effect of foreign operations	(0.6	)	15.5		(6.7	)
Meals and entertainment	(1.0	)	(6.7	)	2.5
Domestic production activities deduction	—		13.8		(4.0	)
Change in valuation allowance	2.2		(0.2	)	(0.1	)
Stock Compensation	(2.6	)	(2.5	)	3.1
Divestiture	(1.0	)	—		—
GILTI/FDII	2.9		—		—
BEAT	(7.0	)	—		—
2017 Tax Act (transition tax and re-measurement of deferreds)	0.4		454.1		—
Foreign withholding	(3.0	)	(21.0	)	3.8
Other permanent differences	(0.7	)	(3.3	)	1.1
	21.1	%	527.7	%	36.2	%

Summary of Components of Net Deferred Tax Assets

The components of net deferred tax assets and liabilities are as follows (in thousands):



	Year Ended March 31,
	2019			2018
Deferred tax assets:
Accrued expenses	$	4,359		$	4,068
Deferred revenue	11,278			12,168
Reserves	5,463			3,375
Pension and other retiree benefits	5,960			5,307
Net operating loss carryforwards	14,992			21,251
Tax credit carryforwards	9,043			6,625
Share-based compensation	5,505			5,164
Other	166			418
Total gross deferred tax assets	56,766			58,376
Valuation allowance	(835		)	(3,108		)
Net deferred tax assets	55,931			55,268
Deferred tax liabilities:
Intangible assets	(164,199		)	(195,959		)
Other Deferred Liabilities	(1,609		)	—
Depreciation	(7,134		)	(4,187		)
Total deferred tax asset (liability)	$	(117,011	)	$	(144,878	)

Schedule of Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the fiscal years ended March 31, 2019, 2018 and 2017 is as follows (in thousands):



	Year Ended March 31,
	2019			2018			2017
Balance at April 1,	$	2,215		$	2,926		$	1,588
Additions based on tax positions related to the current year	28			126			46
Release of tax positions of prior years	(194		)	(481		)	(154		)
Increase in unrecognized tax benefits as a result of a tax position taken during a prior period	—			—			1,446
Decrease relating to settlements with taxing authorities	(735		)	(356		)	—
Balance at March 31,	$	1,314		$	2,215		$	2,926