Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

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):



	2019		2018		2017
United States	$	505,818	$	622,214	$	524,669
Foreign	572,001		472,911		368,921
Total	$	1,077,819	$	1,095,125	$	893,590

Components of Income Taxes

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



	2019			2018			2017
Current:
Federal	$	50,145		$	165,303		$	303,514
State	10,285			26,036			19,234
Foreign	84,433			95,053			78,354
Total current	144,863			286,392			401,102
Deferred:
Federal	(10,479		)	(19,688		)	(255,188		)
State	3,745			8,727			276
Foreign	44,617			8,211			7,200
Total deferred	37,883			(2,750		)	(247,712		)
Total provision	$	182,746		$	283,642		$	153,390

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 21% for 2019 and 2018 and 35% 2017, respectively, to income before income taxes for the years ended December 31, 2019, 2018 and 2017 due to the following (in thousands):



	2019					2018					2017
Computed “expected” tax expense	$	226,342		21.0	%	$	229,976		21.0	%	$	312,756		35.0	%
Changes resulting from:
Change in valuation allowance	(28,614		)	(2.7	)	25,193			2.8		18,289			2.0
Foreign income tax differential	(15,816		)	(1.4	)	9,921			0.9		(38,695		)	(4.3	)
State taxes net of federal benefits	12,482			1.2		20,480			1.9		12,884			1.4
Foreign-sourced nontaxable income	—					(28,861		)	(2.6	)	(8,836		)	(1.0	)
Foreign withholding tax	20,360			1.9		20,569			1.9		9,362			1.0
IRC Section 199 deduction	—			—		—			—		(8,844		)	(1.0	)
Excess tax benefits related to stock-based compensation	(38,156		)	(3.5	)	(19,255		)	(1.8	)	(18,058		)	(2.0	)
Revaluation of capital loss deferred tax asset	(24,279		)	(2.3	)	—			—		—			—
Impact of the Tax Act:
One-time transition tax	—			—		—			—		195,779			21.9
Foreign tax credit- one-time transition tax	—			—		17,385			1.6		(113,955		)	(12.8	)
Deferred tax effects	—			—		7,128			0.1		(209,965		)	(23.5	)
Sub-part F Income/GILTI	49,859			4.6		40,200			3.7		3,741			0.4
Foreign tax credits	(38,657		)	(3.6	)	(52,095		)	(4.8	)	—			—
Other	19,225			1.8		13,001			1.2		(1,068		)	0.1
Provision for income taxes	$	182,746		17.0	%	$	283,642		25.9	%	$	153,390		17.2	%

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):



	2019			2018
Deferred tax assets:
Accounts receivable, principally due to the allowance for doubtful accounts	$	9,586		$	8,518
Accrued expenses not currently deductible for tax	2,305			6,734
Lease deferral	24,713			—
Interest rate swap	13,781			—
Stock based compensation	39,779			40,081
Income tax credits	35,845			26,770
Net operating loss carry forwards	67,108			53,221
Investments	—			39,062
Accrued escheat	3,098			3,608
Other	3,522			4,240
Deferred tax assets before valuation allowance	199,737			182,234
Valuation allowance	(64,482		)	(90,366		)
Deferred tax assets, net	135,255			91,868
Deferred tax liabilities:
Intangibles—including goodwill	(499,525		)	(483,361		)
Basis difference in investment in subsidiaries	(42,314		)	(38,200		)
Lease deferral	(21,810		)	—
Mark to Market	(3,213		)	—
Accrued Expense Liability	(4,023		)	—
Prepaid expenses	(2,075		)
Property and equipment, prepaid expenses and other	(79,620		)	(59,101		)
Deferred tax liabilities	(652,580		)	(580,662		)
Net deferred tax liabilities	$	(517,325	)	$	(488,794	)

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):



	2019			2018
Long term deferred tax assets and liabilities:
Long term deferred tax assets	$	2,655		$	3,152
Long term deferred tax liabilities	(519,980		)	(491,946		)
Net deferred tax liabilities	$	(517,325	)	$	(488,794	)

Summary of Valuation Allowance

The valuation allowance for deferred tax assets changed during 2019 as follows (in thousands):



Balance at December 31, 2016	$	76,395
Additions based on changes in deferred tax assets in 2017	5,332
Reduction in valuation allowance due to rate change from Tax Act	(22,378		)
Balance at December 31, 2017 (after impact of tax reform)	59,349
Additions based on changes in deferred tax assets	25,193
Increase in valuation allowance due to rate change from Tax Act	5,824
Balance at December 31, 2018	90,366
Reductions based on changes in deferred tax assets	(28,601		)
Additions based on changes in deferred tax assets	2,717
Balance at December 31, 2019	$	64,482

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits including interest and penalties for the years ended December 31, 2019, 2018 and 2017 is as follows (in thousands):



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
Deductions based on settlement/expiration of prior year tax positions	(9,119		)
Additions based on tax provisions related to the prior year	1,171
Unrecognized tax benefits at December 31, 2017	31,558
Additions based on tax provisions related to the current year	3,755
Additions based on tax provisions related to the prior year	3,000
Deductions based on settlement/expiration of prior year tax positions	(4,161		)
Unrecognized tax benefits at December 31, 2018	34,152
Additions based on tax provisions related to the current year	4,284
Additions based on tax provisions related to the prior year	11,679
Deductions based on settlement/expiration of prior year tax positions	(7,342		)
Unrecognized tax benefits at December 31, 2019	$	42,773