Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of components of income (loss) before income taxes

The following table presents domestic and foreign components of loss before income taxes for the periods presented (in thousands):



	Year Ended December 31,
	2018			2017			2016
United States	$	(170,040	)	$	(158,187	)	$	5,577
Foreign	(14,102		)	(36,457		)	(114,872		)
Total	$	(184,142	)	$	(194,644	)	$	(109,295	)

Schedule of components for income tax expense

The income tax expense (benefit) is composed of the following (in thousands):



	Year Ended December 31,
	2018			2017			2016
Current tax provision:
Federal	$	(1,048	)	$	(87,961	)	$	78,782
State	388			(8,429		)	9,878
Foreign	4,895			5,032			5,256
Total current	4,235			(91,358		)	93,916
Deferred tax provision:
Federal	(1,570		)	154,817			(87,584		)
State	(210		)	18,902			(11,622		)
Foreign	(768		)	187			(1,228		)
Total deferred	(2,548		)	173,906			(100,434		)
Total income tax expense (benefit)	$	1,687		$	82,548		$	(6,518	)

Schedule of reconciliation of effective tax to statutory federal rate

The reconciliation of the Company’s effective tax rate to the statutory federal rate is as follows:



	Year Ended December 31,
	2018		2017		2016
Tax at federal statutory rate	21.0	%	35.0	%	35.0	%
State taxes, net of federal effect	(0.1	)	(5.4	)	4.3
Foreign rate differential	(3.9	)	(9.3	)	(38.9	)
Tax credits	6.3		4.1		9.0
Domestic production activities deduction	—		(3.5	)	5.0
Stock-based compensation ⁽¹⁾	(4.9	)	(5.3	)	(4.6	)
Change in prior year reserves	(0.1	)	(2.0	)	1.9
Out-of-period adjustment	—		—		(2.8	)
Change in valuation allowance	(15.2	)	(35.2	)	—
Effect of change in tax rate due to Tax Act	—		(23.4	)	—
Other ⁽²⁾	(4.0	)	2.6		(2.9	)
Effective tax rate	(0.9	)%	(42.4	)%	6.0	%

(1) Starting in 2017, excess tax benefits from share-based award activity are reflected as reduction of the provision for income taxes, whereas they were previously recognized in equity. This will result in increased volatility in the Company’s effective tax rate. The amount of net stock compensation windfalls previously recognized by the Company in equity in 2016 was $22.0 million.

Schedule of tax effects of temporary differences for deferred tax assets

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets were as follows (in thousands):



	December 31,
	2018			2017
Deferred tax assets:
Net operating losses and credits	$	61,494		$	23,338
Fixed assets and intangible assets	55,476			10,625
Accruals and reserves	53,818			49,886
Stock-based compensation	9,494			12,154
Inventory	911			4,345
Other	4,806			3,325
Total deferred tax assets	185,999			103,673
Less: valuation allowance	(181,122		)	(99,570		)
Deferred tax assets, net of valuation allowance	4,877			4,103

Deferred tax liabilities:
Other	(560		)	(369		)
Total deferred tax liabilities	(560		)	(369		)
Net deferred tax assets	$	4,317		$	3,734

Schedule of reconciliation of unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):



	December 31,
	2018			2017			2016
Balance at beginning of year	$	29,938		$	35,584		$	23,518
Reductions based on tax positions related to prior year	(820		)	(6,335		)	(2,100		)
Additions based on tax positions related to prior year	263			108			2,809
Additions based on tax positions related to current year	11,860			9,289			11,357
Reductions due to tax authorities’ settlements	(43		)	(8,603		)	—
Reductions due to expiration of statutes of limitation	—			(105		)	—
Balance at end of year	$	41,198		$	29,938		$	35,584