INCOME AND OTHER TAXES

The Company’s effective income tax rate for the fiscal years ended February 3, 2017, January 29, 2016, and January 30, 2015 was as follows:



	Fiscal Years Ended
	February 3, 2017			January 29, 2016			January 30, 2015

Loss before income taxes	$	(63,477	)	$	(112,577	)	$	(61,235	)
Income tax benefit	$	(25,264	)	$	(40,196	)	$	(22,745	)
Effective tax rate	39.8		%	35.7		%	37.1		%

The change in the Company's effective income tax rate for the fiscal year ended February 3, 2017 over the effective income tax rate for the fiscal year ended January 29, 2016 was primarily attributable to the recognition of additional tax benefits relating to research and development tax credits during fiscal 2017. The change in the Company's effective income tax rate for the fiscal year ended January 29, 2016 over the effective income tax rate for the fiscal year ended January 30, 2015 was primarily attributable to a change in the mix of geographic losses.

During the periods presented in the accompanying Consolidated Financial Statements, SecureWorks did not file separate federal tax returns, as the Company generally was included in the tax grouping of other Dell entities within the respective entity’s tax jurisdiction. The income tax benefit has been calculated using the separate return method modified to apply the benefits-for-loss approach. Under the benefits-for-loss approach, net operating losses or other tax attributes are characterized as realized by SecureWorks when those attributes are utilized by other members of the Dell consolidated group.

A reconciliation of the Company's income tax provision to the statutory U.S. federal tax rate is as follows:



	Fiscal Year Ended
	February 3, 2017		January 29, 2016		January 30, 2015

U.S. federal statutory rate	35.0	%	35.0	%	35.0	%
Foreign income taxed at different rates	(0.3	)	(0.9	)	(0.7	)
State income taxes, net of federal tax benefit	3.2		1.9		2.8
Research and development credits	3.1		0.5		—
Nondeductible/nontaxable items	(1.2	)	(0.8	)	—
Total	39.8	%	35.7	%	37.1	%

The benefit for income taxes consists of the following:



	Fiscal Years Ended
	February 3, 2017			January 29, 2016			January 30, 2015
	(in thousands)
Current:
Federal	$	(22,470	)	$	(12,519	)	$	(7,552	)
State/Local	657			(1,517		)	(585		)
Foreign	1,379			(1,366		)	(383		)
Current	(20,434		)	(15,402		)	(8,520		)
Deferred:
Federal	(3,620		)	(24,472		)	(12,970		)
State/Local	(471		)	330			(1,172		)
Foreign	(739		)	(652		)	(83		)
Deferred	(4,830		)	(24,794		)	(14,225		)
Income tax benefit	$	(25,264	)	$	(40,196	)	$	(22,745	)

Loss before provision for income taxes consists of the following:



	Fiscal Years Ended
	February 3, 2017			January 29, 2016			January 30, 2015
	(in thousands)
Domestic	$	(64,542	)	$	(103,061	)	$	(58,641	)
Foreign	1,065			(9,516		)	(2,594		)
Loss before income taxes	$	(63,477	)	$	(112,577	)	$	(61,235	)

The components of the Company's net deferred tax balances are as follows:



	February 3, 2017			January 29, 2016
	(in thousands)
Deferred tax assets:
Deferred revenue	$	6,232		$	5,231
Provision for doubtful accounts	2,377			874
Credit carryforwards	—			480
Loss carryforwards	2,806			18,509
Stock-based and deferred compensation	9,568			6,443
Deferred tax assets	20,983			31,537
Valuation allowance	(2,806		)	(2,438		)
Deferred tax assets, net of valuation allowance	18,177			29,099
Deferred tax liabilities:
Property and equipment	(1,367		)	(192		)
Purchased intangible assets	(97,836		)	(107,901		)
Operating and compensation related accruals	(3,933		)	(7,855		)
Other	(29		)	(732		)
Deferred tax liabilities	(103,165		)	(116,680		)
Net deferred tax liabilities	$	(84,988	)	$	(87,581	)

Net deferred tax balances are included in other non-current assets and other non-current liabilities in the Consolidated Statements of Financial Position.

As of February 3, 2017 and January 29, 2016, SecureWorks had $2.8 million and $2.4 million of deferred tax assets, respectively, related to net operating loss carryforwards for state tax returns that are not included with those of other Dell entities. These net operating loss carryforwards began expiring in the fiscal year ended February 3, 2017. Due to the uncertainty surrounding the realization of these net operating loss carryforwards, the Company has provided valuation allowances for the full amount as of February 3, 2017 and January 29, 2016. Because the Company is included in the tax filings of certain other Dell entities, management has determined that it will be able to realize the remainder of its deferred tax assets. If the Company’s tax provision had been prepared using the separate return method, the unaudited pro forma pre-tax loss, tax benefit and net loss for the fiscal year ended February 3, 2017 would have been $63.5 million, $12.1 million and $51.4 million, respectively, as a result of the recognition of a valuation allowance that would be recorded on certain deferred tax assets.

The cumulative undistributed earnings in the Company’s non-U.S. jurisdictions are currently negative. The Company, therefore, has no unrecognized deferred tax liability on these earnings. The Company had $0.6 million of unrecognized tax benefits as of February 3, 2017 and no unrecognized tax benefits as of January 29, 2016. The Company is no longer subject to tax examinations for years prior to fiscal 2012.