Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Pre-tax earnings by significant geographical locations

Pre-tax earnings by significant geographical locations are as follows (in thousands):



	Year Ended December 31,
	2017		2016		2015
United States	$	143,924	$	124,500	$	146,940
Foreign	135,141		151,457		158,506
	$	279,065	$	275,957	$	305,446

Provisions for income taxes

The provisions for income taxes are as follows (in thousands):



	Year Ended December 31,
	2017			2016		2015
Current tax expense:
Federal	$	112,673		$	36,771	$	35,029
State	5,035			5,785		6,074
Foreign	19,689			64,109		19,884
	137,397			106,665		60,987
Deferred tax expense (benefit):
Federal	34,857			1,404		10,752
State	473			267		1,052
Foreign	(885		)	995		(9,031		)
	34,445			2,666		2,773
Total income tax provision	$	171,842		$	109,331	$	63,760

Deferred tax assets (liabilities)

Net deferred tax assets (liabilities) were classified on the balance sheet as follows (in thousands):



	December 31,
	2017			2016
Deferred tax assets, non-current	21,001			45,243
Deferred tax liabilities, non-current	(12,496		)	(2,331		)
Net deferred tax assets	$	8,505		$	42,912


Note 14.	Income Taxes - (Continued)

The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and deferred tax liabilities were as follows (in thousands):



	December 31,
	2017			2016
Deferred tax assets:
Accrued liabilities and allowances	$	20,425		$	28,909
Tax credit and loss carry-forwards	30,979			25,522
Stock-based compensation	11,715			17,204
Inventory basis differences	8,555			11,337
Deferred revenue	2,732			4,758
Other assets	2,527			917
Gross deferred tax assets	76,933			88,647
Valuation allowance	(3,392		)	(2,924		)
Total deferred tax assets, net	73,541			85,723
Deferred tax liabilities:
Intangible assets	(29,117		)	(33,564		)
Property and equipment	(16,499		)	(7,212		)
Unremitted earnings of foreign subsidiaries	(15,100		)	—
Other liabilities	(4,320		)	(2,035		)
Total deferred tax liabilities	(65,036		)	(42,811		)
Net deferred tax assets	$	8,505		$	42,912

Effective income tax rate reconciliation

The provision for income taxes differs from the amount of tax determined by applying the applicable United States statutory federal income tax rate to pretax income as a result of the following differences:



	Year Ended December 31,
	2017		2016		2015
Statutory federal tax rate	35.0	%	35.0	%	35.0	%
(Decrease) increase in rates resulting from:
Foreign rate differential	(10.7	)	(11.3	)	(7.8	)
Foreign, federal and state income tax credits	(2.0	)	(1.2	)	(2.1	)
State taxes	1.8		2.3		2.4
European Union state aid recovery	0.1		14.4		—
Valuation allowance release	—		—		(6.4	)
Tax rate change on deferred items	5.1		—		—
United States transition tax	23.8		—		—
Unremitted earnings of foreign subsidiaries	5.4		—		—
Other	3.1		0.4		(0.2	)
Effective tax rate	61.6	%	39.6	%	20.9	%

The following table summarizes the activity related to unrecognized tax benefits, including amounts accrued for potential interest and penalties (in thousands):



	Year Ended December 31,
	2017			2016			2015
Balance, beginning of year	$	51,851		$	14,967		$	15,401
Increases related to current year tax positions	17,264			40,840			1,446
Increases related to prior year tax positions	5,781			1,066			299
Increases (decreases) related to prior year tax positions	(759		)	(610		)	(724		)
Lapse of statute of limitations	(1,260		)	(4,070		)	(1,455		)
Settlements	(986		)	(342		)	—
Change due to currency translation	5,384			—			—
Balance, end of year	$	77,275		$	51,851		$	14,967

Tax years open to examination by major taxing jurisdictions

The Company currently has the following tax years open to examination by major taxing jurisdictions:



	Tax Years:
United States Federal	2014 - 2016
State of California	2013 - 2016
State of Massachusetts	2014 - 2016
State of Oregon	2014 - 2016
Sweden	2012 - 2016
United Kingdom	2013 - 2016
Belgium	2011 - 2016