17. Income Taxes

The following table presents the domestic and foreign components of income (loss) before income taxes for 2018, 2017 and 2016 (in thousands):


	2018		2017		2016
Domestic income / (loss)	$	(10,471)	$	122,828	$	146,063
Foreign income		16,362		17,514		12,746
Total income	$	5,891	$	140,342	$	158,809

A summary of the provision (benefit) for income tax follows (in thousands):


	2018		2017		2016
Current:
Federal	$	(5,324)	$	28,951	$	32,477
Foreign		4,736		4,602		2,669
State and local		1,529		(234)		2,947
Deferred		1,705		498		11,624
Total income taxes	$	2,646	$	33,817	$	49,717

Significant deferred tax assets (liabilities) follow (in thousands):


	December 30,		December 31,
	2018		2017
Accrued liabilities	$	16,339	$	11,378
Accrued bonuses		724		192
Other assets and liabilities		10,705		7,913
Equity awards		5,862		5,690
Other		2,196		2,178
Foreign net operating losses		1,555		2,773
Foreign tax credit carryforwards		7,230		4,707
Total deferred tax assets		44,611		34,831
Valuation allowance on foreign net operating and capital losses, foreign deferred tax assets, and foreign tax credit carryforwards		(8,183)		(7,415)
Total deferred tax assets, net of valuation allowances		36,428		27,416

Deferred expenses		(5,576)		(6,912)
Accelerated depreciation		(24,239)		(19,228)
Goodwill		(12,645)		(12,248)
Other		(1,064)		(989)
Total deferred tax liabilities		(43,524)		(39,377)
Net deferred liability	$	(7,096)	$	(11,961)

The Company had approximately $5.3 million and $9.4 million of foreign net operating loss carryovers as of December 30, 2018 and December 31, 2017, respectively. The Company had approximately $0.6 million and $2.1 million of valuation allowances primarily related to these foreign net operating losses as of December 30, 2018 and December 31, 2017, respectively. A substantial majority of our foreign net operating losses do not have an expiration date.

In addition, the Company had approximately $7.2 million in foreign tax credit carryforwards as of December 30, 2018 that expire 10 years from inception in years 2025 through 2028. Our ability to utilize these foreign tax credit carryforwards is dependent on our ability to generate foreign earnings in future years sufficient to claim foreign tax credits in excess of foreign taxes paid in those years. The Company provided a full valuation allowance of $7.2 million for these foreign tax credit carryforwards as we believe realization based on the more-likely-than-not criteria has not been met as of December 30, 2018.

The reconciliation of income tax computed at the U.S. federal statutory rate to income tax expense for the years ended December 30, 2018, December 31, 2017 and December 25, 2016 is as follows in both dollars and as a percentage of income before income taxes ($ in thousands):


	2018				2017				2016
	Income Tax		Income		Income Tax		Income		Income Tax		Income
	Expense		Tax Rate		Expense		Tax Rate		Expense		Tax Rate

Tax at U.S. federal statutory rate	$	1,237	21.0	%	$	49,120	35.0	%	$	55,583	35.0	%
State and local income taxes		150	2.6	%		2,432	1.7	%		2,972	1.9	%
Foreign income taxes		4,879	82.8	%		5,306	3.8	%		3,143	2.0	%
Income of consolidated partnerships
attributable to noncontrolling interests		(371)	(6.3)	%		(1,554)	(1.1)	%		(2,312)	(1.4)	%
Non-qualified deferred compensation plan
(income) loss		483	8.2	%		(1,236)	(0.9)	%		(428)	(0.3)	%
Excess tax benefits on equity awards		447	7.6	%		(1,879)	(1.4)	%		—	—	%
Remeasurement of deferred taxes		—	—	%		(7,020)	(5.0)	%		—	—	%
Tax credits		(6,945)	(117.9)	%		(6,909)	(4.9)	%		(6,771)	(4.3)	%
Disposition of China		4,118	69.9	%		—	—	%		—		%
Other		(1,352)	17.5	%		(4,443)	(3.1)	%		(2,470)	(1.6)	%
Total	$	2,646	85.4	%	$	33,817	24.1	%	$	49,717	31.3	%

Income taxes paid were $14.0 million in 2018, $37.2 million in 2017 and $35.1 million in 2016.

On December 22, 2017, the Tax Cuts and Jobs Act, (the “Tax Act”) was signed into law. The Tax Act contains substantial changes to the Internal Revenue Code, including a reduction of the corporate tax rate from 35% to 21% effective January 1, 2018. Upon enactment, 2017 deferred tax assets and liabilities were remeasured. This remeasurement yielded a benefit of approximately $7.0 million in the fourth quarter of 2017. At December 30, 2018 the Company has completed its analysis of the Tax Act. See Note 2 for additional information.

The Company files income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company, with few exceptions, is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2014. The Company is currently undergoing examinations by various tax authorities. The Company anticipates that the finalization of these current examinations and other issues could result in a decrease in the liability for unrecognized tax benefits (and a decrease of income tax expense) of approximately $240,000 during the next 12 months.

The Company had $2.0 million of unrecognized tax benefits at December 30, 2018 which, if recognized, would affect the effective tax rate. A reconciliation of the beginning and ending liability for unrecognized tax benefits excluding interest and penalties is as follows, which is recorded as an other long-term liability (in thousands):


Balance at December 25, 2016	$	4,827
Additions for tax positions of current year		134
Additions for tax positions of prior years		(2,862)
Reductions for lapse of statute of limitations		(71)
Balance at December 31, 2017		2,028
Additions for tax positions of current year		510
Reductions for tax positions of prior years		(515)
Reductions for lapse of statute of limitations		—
Balance at December 30, 2018	$	2,023

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as part of income tax expense. The Company’s 2018 and 2017 income tax expense includes interest expense of $39,000 and a benefit of $416,000, respectively. The Company has accrued approximately $165,000 and $124,000 for the payment of interest and penalties as of December 30, 2018 and December 31, 2017, respectively.