Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Before The Provision for Income Taxes

Income before the provision for income taxes is attributable to the following jurisdictions for years ended December 31 (in thousands) :



	2017		2016		2015
United States	$	524,669	$	383,427	$	304,743
Foreign	368,921		259,492		231,261
Total	$	893,590	$	642,919	$	536,004

Components of Income Taxes

The provision for income taxes for the years ended December 31 consists of the following (in thousands):



	2017			2016			2015
Current:
Federal	$	303,514		$	147,406		$	82,926
State	19,234			10,725			8,051
Foreign	78,354			61,084			51,970
Total current	401,102			219,215			142,947
Deferred:
Federal	(255,188		)	(18,723		)	36,723
State	276			1,608			1,525
Foreign	7,200			(11,566		)	(7,622		)
Total deferred	(247,712		)	(28,681		)	30,626
Total provision	$	153,390		$	190,534		$	173,573

Summary of Provision for Income Taxes and U.S. Federal Tax Rate

The provision for income taxes differs from amounts computed by applying the U.S. federal tax rate of 35% to income before income taxes for the years ended December 31 due to the following (in thousands):



	2017					2016					2015
Computed “expected” tax expense	$	312,756		35.0	%	$	225,022		35.0	%	$	187,601		35.0	%
Changes resulting from:
Change in valuation allowance	18,289			2.0		11,952			1.9		20,243			3.8
Foreign income tax differential	(38,695		)	(4.3	)	(25,533		)	(4.0	)	(23,718		)	(4.4	)
State taxes net of federal benefits	12,884			1.4		9,439			1.5		6,711			1.2
Foreign-sourced nontaxable income	(8,836		)	(1.0	)	(13,659		)	(1.2	)	(10,573		)	(2.0	)
IRC Section 199 deduction	(8,844		)	(1.0	)	(7,731		)	(1.2	)	(10,221		)	(1.9	)
Excess tax benefits related to stock-based compensation	(18,058		)	(2.0	)	(11,974		)	(1.9	)	—			—
Subpart F income/transition tax - federal only	195,779			21.9		—			—		—			—
Foreign tax credit/transition tax - federal only	(113,955		)	(12.8	)	—			—		—			—
Tax reform - federal rate reduction	(209,966		)	(23.5	)	—			—		—			—
Other	12,036			1.3		3,018			(0.4	)	3,530			0.7
Provision for income taxes	$	153,390		17.2	%	$	190,534		29.7	%	$	173,573		32.4	%

Summary of Deferred Tax Assets and Liabilities

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



	2017			2016
Deferred tax assets:
Accounts receivable, principally due to the allowance for doubtful accounts	$	6,752		$	7,148
Accrued expenses not currently deductible for tax	442			2,647
Stock based compensation	37,274			41,415
Income tax credits	376			376
Net operating loss carry forwards	41,168			45,969
Investments	37,804			53,379
Accrued escheat	4,768			7,290
Fixed assets, intangibles and other	12,604			15,622
Deferred tax assets before valuation allowance	141,188			173,846
Valuation allowance	(59,349		)	(76,395		)
Deferred tax assets, net	81,839			97,451
Deferred tax liabilities:
Intangibles—including goodwill	(508,958		)	(687,443		)
Basis difference in investment in foreign subsidiaries	(39,287		)	(48,354		)
Prepaid expenses	(1,605		)	(3,644		)
Property and equipment, principally due to differences between book and tax depreciation, and other	(49,100		)	(24,157		)
Deferred tax liabilities	(598,950		)	(763,598		)
Net deferred tax liabilities	$	(517,111	)	$	(666,147	)

Deferred Tax Balance Classification in Balance Sheet

The Company’s deferred tax balances are classified in its balance sheets as of December 31 as follows (in thousands):



	2017			2016
Long term deferred tax assets and liabilities:
Long term deferred tax assets	1,801			2,433
Long term deferred tax liabilities	(518,912		)	(668,580		)
Net long term deferred taxes	(517,111		)	(666,147		)
Net deferred tax liabilities	$	(517,111	)	$	(666,147	)

Summary of Valuation Allowance

The valuation allowance for deferred tax assets changed during 2017 as follows (in thousands):



Balances at December 31, 2014	$	27,082
Additions	35,523
Balance at December 31, 2015	62,605
Additions	13,790
Balance at December 31, 2016	76,395
Additions	5,332
Reduction in valuation allowance due to rate change from Tax Act	(22,378		)
Balance at December 31, 2017	$	59,349

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits including interest for the years ended December 31, 2017, 2016 and 2015 is as follows (in thousands):



Unrecognized tax benefits at December 31, 2014	$	18,641
Additions based on tax provisions related to the current year	9,079
Additions based on tax provisions related to the prior year	477
Deductions based on settlement/expiration of prior year tax positions	(6,363		)
Unrecognized tax benefits at December 31, 2015	21,834
Additions based on tax provisions related to the current year	3,332
Additions based on tax provisions related to the prior year	2,496
Deductions based on settlement/expiration of prior year tax positions	(1,507		)
Unrecognized tax benefits at December 31, 2016	26,155
Additions based on tax provisions related to the current year	4,143
Additions for tax positions due to acquisitions	9,208
Additions based on tax provisions related to the prior year	1,171
Deductions based on settlement/expiration of prior year tax positions	(9,119		)
Unrecognized tax benefits at December 31, 2017	$	31,558