Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Components of Income Before Income Taxes

For financial reporting purposes, income before income taxes includes the following components (in thousands):



	Years Ended December 31,
	2019			2018		2017
United States	$	(16,317	)	$	16,312	$	(42,863	)
Foreign	88,527			75,487		86,435
Total	$	72,210		$	91,799	$	43,572

Summary of Income Tax Expense (Benefit)

The expense (benefit) for income taxes consists of the following (in thousands):



	Years Ended December 31,
	2019			2018			2017
Federal
Current	$	3,738		$	6,545		$	2,586
Deferred	(25,150		)	(6,587		)	19,212
Total	(21,412		)	(42		)	21,798
State
Current	590			4,441			(1,857		)
Deferred	342			(2,649		)	(1,324		)
Total	932			1,792			(3,181		)
Foreign
Current	22,960			17,626			16,048
Deferred	2,668			3,502			3,772
Total	25,628			21,128			19,820
Total	$	5,148		$	22,878		$	38,437

Summary of Differences Between Income Tax Expense Computed at Statutory Federal Income Tax Rate and Per Consolidated Statements of Operations

Differences between the income tax expense computed at the statutory federal income tax rate and per the consolidated statements of operations are summarized as follows (in thousands):



	Years Ended December 31,
	2019			2018			2017
Tax expense at federal rate of 21% (35% pre-2018)	$	15,164		$	19,278		$	15,250
State income taxes, net of federal benefit	1,227			5,246			(2,238		)
Change in valuation allowance	(12,760		)	12,657			(1,884		)
Foreign tax rate differential	(2,535		)	(4,796		)	(15,622		)
Unrecognized tax benefit increase	898			1,262			3,007
Tax effect of foreign operations	6,698			8,546			5,532
Tax benefit of research & development	(2,506		)	(2,557		)	(1,904		)
Transition tax	—			(8,112		)	20,867
Revaluation of deferred tax balances	—			(4,937		)	14,953
Performance-based compensation	(560		)	(4,541		)	2,081
Domestic production activities	—			—			(3,793		)
Other	(478		)	832			2,188
Income tax provision	$	5,148		$	22,878		$	38,437

Summary of Deferred Tax Assets and Liabilities

The deferred tax assets and liabilities result from differences in the timing of the recognition of certain income and expense items for tax and financial accounting purposes. The sources of these differences at each balance sheet date are as follows (in thousands):



	December 31,
	2019			2018
Deferred income tax assets:
Net operating loss carryforwards	$	23,030		$	25,745
Tax credits	52,902			43,838
Compensation	18,791			15,934
Deferred revenue	25,599			27,587
Research and development expense deferral	—			12,631
Other	4,065			5,393
Gross deferred income tax assets	124,387			131,128
Less: valuation allowance	(7,653		)	(20,415		)
Net deferred income tax assets	$	116,734		$	110,713
Deferred income tax liabilities:
Depreciation and amortization	$	(52,978	)	$	(60,872	)
Deferred revenue	(44,198		)	(54,508		)
Total deferred income tax liabilities	(97,176		)	(115,380		)
Net deferred income taxes	$	19,558		$	(4,667	)
Deferred income taxes / liabilities included in the balance sheet are:
Deferred income tax asset – noncurrent	$	51,611		$	27,048
Deferred income tax liability – noncurrent	(32,053		)	(31,715		)
Net deferred income taxes	$	19,558		$	(4,667	)

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31 is as follows (in thousands):



	2019			2018			2017
Balance of unrecognized tax benefits at beginning of year	$	28,406		$	27,237		$	24,278
Increases for tax positions of prior years	2,784			315			2,478
Decreases for tax positions of prior years	(96		)	(61		)	(114		)
Increases for tax positions established for the current period	2,542			1,185			1,677
Decreases for settlements with taxing authorities	(220		)	—			(154		)
Reductions resulting from lapse of applicable statute of limitation	(4,462		)	(115		)	(1,155		)
Adjustment resulting from foreign currency translation	46			(155		)	227
Balance of unrecognized tax benefits at end of year	$	29,000		$	28,406		$	27,237