Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

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

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



	Years Ended December 31,
	2016		2015		2014
Domestic	$	466.2	$	456.3	$	(509.7	)
Foreign	361.2		395.9		423.4
Total pretax income (loss)	$	827.4	$	852.2	$	(86.3	)

Schedule of Components of Provision for Income Taxes

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



	Years Ended December 31,
	2016			2015			2014
Current provision:
Federal	$	121.4		$	181.4		$	180.1
States	10.3			15.9			15.2
Foreign	46.0			43.3			33.7
Total current provision	177.7			240.6			229.0
Deferred provision (benefit):
Federal	57.2			(16.7		)	17.3
States	4.3			(0.4		)	1.2
Foreign	(4.5		)	(5.0		)	0.5
Total deferred provision (benefit)	57.0			(22.1		)	19.0
Total provision for income taxes	$	234.7		$	218.5		$	248.0

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 income (loss) as follows (in millions):



	Years Ended December 31,
	2016			2015			2014
Expected provision (benefit) at 35% rate	$	289.6		$	298.3		$	(30.2	)
State taxes, net of federal benefit	8.9			8.9			9.5
Foreign income at different tax rates	(53.4		)	(68.9		)	(90.2		)
R&D tax credits	(16.8		)	(12.7		)	(17.1		)
Share-based compensation	10.5			13.2			25.3
Non-deductible goodwill impairment	—			—			297.5
Gain on sale of Junos Pulse	—			—			75.6
Release of valuation allowance	(0.7		)	—			(22.8		)
Domestic production activities	(9.5		)	(15.1		)	(6.8		)
Non-deductible compensation	2.4			3.7			3.2
Cost sharing adjustment^(*)	—			(13.2		)	—
Other	3.7			4.3			4.0
Total provision for income taxes	$	234.7		$	218.5		$	248.0

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^(*)	Represents cumulative impact through fiscal year 2014 for the change in treatment of share-based compensation as a result of the U.S. Tax Court decision in Altera Corp. v. Commissioner, 145 T.C. No. 3 (2015).

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,
	2016			2015
Deferred tax assets:
Net operating loss carry-forwards	$	23.8		$	1.0
Research and other credit carry-forwards	137.5			128.7
Deferred revenue	125.6			109.3
Stock-based compensation	52.3			49.1
Cost sharing adjustment	69.9			70.1
Reserves and accruals not currently deductible	141.3			173.9
Other	12.8			19.2
Total deferred tax assets	563.2			551.3
Valuation allowance	(154.4		)	(146.2		)
Deferred tax assets, net of valuation allowance	408.8			405.1
Deferred tax liabilities:
Property and equipment basis differences	(58.1		)	(44.1		)
Purchased intangibles	(28.8		)	(3.1		)
Unremitted foreign earnings	(311.4		)	(290		)
Deferred compensation and other	(11.0		)	(12.0		)
Total deferred tax liabilities	(409.3		)	(349.2		)
Net deferred tax (liabilities) assets	$	(0.5	)	$	55.9

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,
	2016			2015			2014
Balance at beginning of year	$	216.1		$	199.2		$	137.6
Tax positions related to current year:
Additions	27.2			18.1			62.5
Tax positions related to prior years:
Additions	1.0			5.3			0.6
Reductions	(4.1		)	(2.9		)	—
Settlements	(14.3		)	—			—
Lapses in statutes of limitations	(2.8		)	(3.6		)	(1.5		)
Balance at end of year	$	223.1		$	216.1		$	199.2