Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Components of income before the provision for income taxes and noncontrolling interest

The components of pretax (loss) income and noncontrolling interest are summarized as follows (in millions):



	Years Ended December 31,
	2015		2014			2013
Domestic	$	456.3	$	(509.7	)	$	248.7
Foreign	395.9		423.4			276.8
Total pretax (loss) income	$	852.2	$	(86.3	)	$	525.5

Schedule of Components of Provision for Income Taxes

The provision for income taxes is summarized as follows (in millions):



	Years Ended December 31,
	2015			2014		2013
Current provision (benefit):
Federal	$	181.4		$	180.1	$	(12.9	)
States	15.9			15.2		(5.0		)
Foreign	43.3			33.7		32.5
Total current provision (benefit)	240.6			229.0		14.6
Deferred provision (benefit):
Federal	(16.7		)	17.3		51.2
States	(0.4		)	1.2		(2.7		)
Foreign	(5.0		)	0.5		22.6
Total deferred provision (benefit)	(22.1		)	19.0		71.1
Income tax benefits attributable to employee stock plan activity	—			—		—
Total provision (benefit) for income taxes	$	218.5		$	248.0	$	85.7

Schedule of Effective Income Tax Rate Reconciliation

The provision for income taxes differs from the amount computed by applying the federal statutory rate to pretax (loss) income as follows (in millions):



	Years Ended December 31,
	2015			2014			2013
Expected (benefit) provision at 35% rate	$	298.3		$	(30.2	)	$	184.0
State taxes (benefit), net of federal benefit	8.9			9.5			(3.6		)
Foreign income at different tax rates	(68.9		)	(90.2		)	(37.7		)
R&D tax credits	(12.7		)	(17.1		)	(32.5		)
Share-based compensation	13.2			25.3			25.6
Non-deductible goodwill impairment	—			297.5			—
Gain on sale of Junos Pulse	—			75.6			—
Release of valuation allowance	—			(22.8		)	—
Settlement with tax authorities	—			—			(28.3		)
Domestic production activities	(15.1		)	(6.8		)	(26.3		)
Non-deductible compensation	3.7			3.2			1.5
Cost sharing adjustment	(13.2		)	—			—
Other	4.3			4.0			3.0
Total provision for income taxes	$	218.5		$	248.0		$	85.7

Schedule of Deferred Tax Assets and Liabilities

Significant components of the Company's long-term deferred tax assets and deferred tax liabilities are as follows (in millions):



	As of December 31,
	2015			2014
Deferred tax assets:
Net operating loss carry-forwards	$	1.0		$	1.3
Foreign tax credit carry-forwards	75.4			69.7
Research and other credit carry-forwards	128.7			122.5
Deferred revenue	109.3			104.9
Stock-based compensation	49.1			55.8
Cost sharing adjustment	70.1			—
Reserves and accruals not currently deductible	173.9			129.8
Other	19.2			19.8
Total deferred tax assets	626.7			503.8
Valuation allowance	(146.2		)	(144.5		)
Deferred tax assets, net of valuation allowance	480.5			359.3
Deferred tax liabilities:
Property and equipment basis differences	(44.1		)	(35.6		)
Purchased intangibles	(3.1		)	(16.7		)
Unremitted foreign earnings	(365.4		)	(260.6		)
Deferred compensation and other	(12.0		)	(5.1		)
Other	—			—
Total deferred tax liabilities	(424.6		)	(318.0		)
Net deferred tax assets⁽¹⁾	$	55.9		$	41.3

_______________________________

⁽¹⁾

During the year ended December 31, 2015, the Company early adopted ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, requiring all deferred tax assets and liabilities, and any related valuation allowance, to be classified as non-current on the Consolidated Balance Sheets. Certain amounts in the prior-year Consolidated Financial Statements were retrospectively adjusted to conform to the current-year presentation.

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of the Company's total gross unrecognized tax benefits was as follows (in millions):



	Years Ended December 31,
	2015			2014			2013
Balance at beginning of year	$	199.2		$	137.6		$	136.1
Tax positions related to current year:
Additions	18.1			62.5			15.8
Tax positions related to prior years:
Additions	5.3			0.6			22.6
Reductions	(2.9		)	—			(2.2		)
Settlements	—			—			(31.1		)
Lapses in statutes of limitations	(3.6		)	(1.5		)	(3.6		)
Balance at end of year	$	216.1		$	199.2		$	137.6