Income Taxes (Tables)

12 Months Ended

Dec. 01, 2017

Income before income taxes, domestic and foreign

Income before income taxes for fiscal 2017, 2016 and 2015 consisted of the following (in thousands):



	2017		2016		2015
Domestic	$	1,056,156	$	805,749	$	589,371
Foreign	1,081,485		629,389		284,410
Income before income taxes	$	2,137,641	$	1,435,138	$	873,781

Provision for income taxes, current

The provision for income taxes for fiscal 2017, 2016 and 2015 consisted of the following (in thousands):



	2017			2016			2015
Current:
United States federal	$	298,802		$	94,396		$	204,834
Foreign	60,962			59,749			52,125
State and local	33,578			15,222			(14,975		)
Total current	393,342			169,367			241,984
Deferred:
United States federal	48,905			33,924			(31,011		)
Foreign	(4,242		)	(2,751		)	(9,368		)
State and local	5,682			(9,287		)	(25,511		)
Total deferred	50,345			21,886			(65,890		)
Tax expense attributable to employee stock plans	—			75,103			68,136
Provision for income taxes	$	443,687		$	266,356		$	244,230

Income tax expense differs from the expected tax expense

Total income tax expense differs from the expected tax expense (computed by multiplying the U.S. federal statutory rate of 35% by income before income taxes) as a result of the following (in thousands):



	2017			2016			2015
Computed “expected” tax expense	$	748,174		$	502,298		$	305,824
State tax expense, net of federal benefit	25,131			10,636			(8,316		)
Tax credits	(38,000		)	(48,383		)	(25,967		)
Differences between statutory rate and foreign effective tax rate	(215,490		)	(133,778		)	(90,063		)
Stock-based compensation, net of tax deduction	(42,512		)	15,101			9,623
Resolution of income tax examinations	(31,358		)	(68,003		)	(17,595		)
Domestic manufacturing deduction benefit	(32,200		)	(26,990		)	(16,800		)
Tax charge for licensing acquired company technology to foreign subsidiaries	24,771			5,346			80,015
Other, net	5,171			10,129			7,509
Provision for income taxes	$	443,687		$	266,356		$	244,230

Deferred tax assets and liabilities

The tax effects of the temporary differences that gave rise to significant portions of the deferred tax assets and liabilities as of December 1, 2017 and December 2, 2016 are presented below (in thousands):



	2017			2016
Deferred tax assets:
Acquired technology	$	4,846		$	7,421
Reserves and accruals	48,761			35,440
Deferred revenue	23,452			21,039
Unrealized losses on investments	11			2,391
Stock-based compensation	74,942			56,353
Net operating loss carryforwards of acquired companies	44,465			31,305
Credit carryforwards	124,205			63,315
Capitalized expenses	13,428			15,571
Benefits relating to tax positions	33,318			39,492
Other	30,289			26,439
Total gross deferred tax assets	397,717			298,766
Deferred tax asset valuation allowance	(93,568		)	(24,265		)
Total deferred tax assets	304,149			274,501
Deferred tax liabilities:
Depreciation and amortization	84,064			78,619
Undistributed earnings of foreign subsidiaries	382,744			292,844
Acquired intangible assets	117,282			120,698
Total deferred tax liabilities	584,090			492,161
Net deferred tax liabilities:	$	279,941		$	217,660

Gross amount of unrecognized tax benefits

During fiscal 2017 and 2016, our aggregate changes in our total gross amount of unrecognized tax benefits are summarized as follows (in thousands):



	2017			2016
Beginning balance	$	178,413		$	258,718
Gross increases in unrecognized tax benefits – prior year tax positions	3,680			6,047
Gross decreases in unrecognized tax benefits – prior year tax positions	(30,166		)	(67,870		)
Gross increases in unrecognized tax benefits – current year tax positions	24,927			23,068
Settlements with taxing authorities	(3,876		)	(33,265		)
Lapse of statute of limitations	(8,819		)	(8,456		)
Foreign exchange gains and losses	8,786			171
Ending balance	$	172,945		$	178,413