
	Year Ended December 31,
	2020		2019		2018
	(In thousands)
United States	$	457,830	$	452,793	$	420,597
Foreign	292,414		305,983		308,919
Total income before income taxes	$	750,244	$	758,776	$	729,516


	Year Ended December 31,
	2020		2019		2018
	(In thousands)
Current (benefit) expense:
Federal	$	(123,933)	$	74,283	$	99,127
State	10,522		2,069		1,088
Foreign, including withholding tax	29,152		31,385		76,199
	(84,259)		107,737		176,414
Deferred expense (benefit):
Federal	4,348		30,462		(16,448)
State	17,388		22,899		42,624
Foreign	(2,121)		(14,621)		(55,563)
	19,615		38,740		(29,387)
Total income tax (benefit) expense	$	(64,644)	$	146,477	$	147,027

The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017, and most of its provisions became effective in 2018. The Tax Act made substantial changes to U.S. taxation of corporations, including lowering the U.S. federal corporate income tax rate from 35% to 21% and instituting a territorial tax system, along with a one-time Transition Tax.

Federal current expense and federal deferred benefit for 2018 includes $96.4 million related to the Transition Tax, net of $106.7 million of carried forward and newly-generated foreign tax credits, payable as a result of the Tax Act. This amount is being paid in installments over an eight-year period which began in 2018, as allowed by the Tax Act.

State tax expense for 2018 was increased by $10.0 million remeasurement of deferred tax assets because of changes in certain state apportionment rates, and $5.6 million change in estimate related to the 2017 state income tax returns.

Foreign current expense and foreign deferred benefit for 2019 and 2018 includes $13.1 million and $60.7 million, respectively, of withholding taxes paid upon the repatriation of cash held by foreign subsidiaries.

The difference between income tax (benefit) expense and the amount resulting from applying the federal statutory rate of 21% to Income before income taxes is attributable to the following:


	Year Ended December 31,
	2020		2019		2018
	(In thousands)
Income tax expense at federal statutory rate	$	157,551	$	159,343	$	153,199
State taxes, net of federal benefit	23,167		20,573		35,852
Effect of non-U.S. operations	(27,691)		(25,178)		(26,271)
Stock-based compensation	(8,643)		(9,204)		(7,032)
Capital loss carryforwards expiration	—		—		769,706
Change in valuation allowance	(987)		(3,555)		(773,737)
Accrual for uncertain tax positions	(204,673)		7,365		2,637
Other	(3,368)		(2,867)		(7,327)
Total income tax (benefit) expense	$	(64,644)	$	146,477	$	147,027

During 2020, the Company recognized an income tax benefit as a result of the remeasurement of certain previously unrecognized income tax benefits. The majority of these income tax benefits, related to the worthless stock deduction taken in 2013. These remeasurements were based on written confirmations from IRS, indicating no examination adjustments would be proposed related to the worthless stock deduction or certain other matters reviewed as part of the audit of the Company’s federal income tax returns for 2010 through 2014, and the lapse of statutes of limitations related to other unrecognized income tax benefits. Notwithstanding these written confirmations, the Company’s U.S. federal income tax returns for those years

The Company qualified for a tax holiday in Switzerland until the end of 2019 which lowered tax rates on certain types of income and required certain thresholds of foreign source income. The tax holiday reduced our foreign income tax expense by $17.3 million ($0.15 per share), and $16.9 million ($0.14) in 2019, and 2018, respectively. The benefit from the tax holiday is calculated before consideration of any offsetting tax impact in the United States. Effective January 1, 2020, due to Swiss tax law changes, the tax holiday was eliminated, which was partially offset by a lowered statutory tax rate.


	As of December 31,
	2020		2019
	(In thousands)
Deferred tax assets:
Deferred revenues, accruals and reserves	$	66,926	$	70,539
Net operating loss carryforwards	5,623		17,897
Tax credit carryforwards	5,078		5,516
Other	2,379		7,401
Total deferred tax assets	80,006		101,353
Valuation allowance	(5,613)		(6,598)
Net deferred tax assets	74,393		94,755
Deferred tax liabilities:
Property and equipment	(4,167)		(3,466)
Other	(2,394)		(3,608)
Total deferred tax liabilities	(6,561)		(7,074)
Total net deferred tax assets	$	67,832	$	87,681

With the exception of deferred tax assets related to certain state net operating loss carryforwards, management believes it is more likely than not that the tax effects of the deferred tax liabilities together with future taxable income, will be sufficient to fully recover the remaining deferred tax assets. As of December 31, 2020, the Company’s Other long-term tax liabilities include the $66.1 million noncurrent liability for Transition Tax, net of applicable foreign tax credits, while the $7.8 million current portion of the liability is included in Accounts payable and accrued liabilities.

As of December 31, 2020, the Company’s deferred tax assets included $86.8 million of state net operating loss carryforwards, before applying tax rates for the respective jurisdictions. The tax credit carryforwards as of December 31, 2020 consisted primarily of foreign tax credit carryforwards. The state net operating loss carryforwards expire in various years from 2021 through 2034. The foreign tax credits will expire in 2028.

The Company maintains liabilities for uncertain tax positions. These liabilities involve considerable judgment and estimation and are continuously monitored by management based on the best information available including changes in tax regulations and other information. A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:


	As of December 31,
	2020		2019
	(In thousands)
Beginning balance	$	231,339	$	223,455
Increases in tax positions for prior years	7,138		4,467
Decreases in tax positions for prior years	(199,107)		(328)
Increases in tax positions for current year	1,613		3,745
Lapse in statute of limitations	(17,255)		—
Ending balance	$	23,728	$	231,339

As of December 31, 2020, approximately $23.1 million of unrecognized tax benefits, including penalties and interest, could affect the Company’s tax provision and effective tax rate. The Company does not expect the balance of unrecognized tax benefits to change materially during the next twelve months.

In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of tax expense. These accruals were not material in any period presented.

The Company’s major taxing jurisdictions are the U.S., the Commonwealth of Virginia, and Switzerland. The Company’s U.S. federal income tax returns are currently under examination by the IRS for 2010 through 2014. The U.S. federal statutes of limitations are closed for the 2015 and 2016 tax years. The Company’s other material tax returns are not currently under examination by their respective taxing jurisdictions. Because the Company has previously used net operating loss carryforwards and other tax attributes to offset its taxable income in income tax returns for the U.S. and Virginia, such attributes can be adjusted by these taxing authorities until the statute of limitations closes on the year in which such attributes were utilized. The open years for examination in Switzerland are the 2012 tax year and forward.