Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Pre-tax earnings by significant geographical locations

Pre-tax earnings by significant geographical locations are as follows (in thousands):



	Year Ended December 31,
	2016		2015		2014
United States	$	124,500	$	146,940	$	113,967
Foreign	151,457		158,506		135,562
	$	275,957	$	305,446	$	249,529

Provisions for income taxes

The provisions for income taxes are as follows (in thousands):



	Year Ended December 31,
	2016		2015			2014
Current tax expense:
Federal	$	36,771	$	35,029		$	30,224
State	5,785		6,074			5,511
Foreign	64,109		19,884			11,389
	106,665		60,987			47,124
Deferred tax expense (benefit):
Federal	1,404		10,752			1,207
State	267		1,052			(1,115		)
Foreign	995		(9,031		)	2,052
	2,666		2,773			2,144
Total income tax provision	$	109,331	$	63,760		$	49,268

Deferred tax assets (liabilities)

Net deferred tax assets (liabilities) were classified on the balance sheet as follows (in thousands):



	December 31,
	2016			2015
Deferred tax assets, non-current	45,243			55,429
Deferred tax liabilities, non-current	(2,331		)	(3,623		)
Net deferred tax assets	$	42,912		$	51,806
Valuation allowance	$	2,924		$	2,607


Note 14.	Income Taxes—(Continued)

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



	December 31,
	2016			2015
Deferred tax assets:
Accrued liabilities and allowances	$	28,909		$	27,170
Tax credit and loss carry-forwards	25,522			29,297
Stock-based compensation	17,204			15,628
Inventory basis differences	11,337			10,494
Deferred revenue	4,758			6,184
Other assets	917			1,373
Gross deferred tax assets	88,647			90,146
Valuation allowance	(2,924		)	(2,607		)
Total deferred tax assets, net	85,723			87,539
Deferred tax liabilities:
Intangible assets	(33,564		)	(26,996		)
Property and equipment	(7,212		)	(6,612		)
Other liabilities	(2,035		)	(2,125		)
Total deferred tax liabilities	(42,811		)	(35,733		)
Net deferred tax assets	$	42,912		$	51,806

Effective income tax rate reconciliation

The provision for income taxes differs from the amount of tax determined by applying the applicable United States statutory federal income tax rate to pretax income as a result of the following differences:



	Year Ended December 31,
	2016		2015		2014
Statutory federal tax rate	35.0	%	35.0	%	35.0	%
(Decrease) increase in rates resulting from:
Foreign rate differential	(11.3	)	(7.8	)	(12.7	)
Foreign, federal and state income tax credits	(1.2	)	(2.1	)	(1.7	)
State taxes	2.3		2.4		2.1
European Union state aid recovery	14.4		—		—
Valuation allowance release	—		(6.4	)	(0.1	)
Other	0.4		(0.2	)	(2.9	)
Effective tax rate	39.6	%	20.9	%	19.7	%

The following table summarizes the activity related to unrecognized tax benefits, including amounts accrued for potential interest and penalties (in thousands):



	Year Ended December 31,
	2016			2015			2014
Balance, beginning of year	$	14,967		$	15,401		$	29,533
Increases related to current year tax positions	1,150			1,446			1,457
Increases related to prior year tax positions	40,756			299			12
Decreases related to prior year tax positions	(610		)	(724		)	(781		)
Lapse of statute of limitations	(4,070		)	(1,455		)	(5,165		)
Settlements	(342		)	—			(9,655		)
Balance, end of year	$	51,851		$	14,967		$	15,401

Tax years open to examination by major taxing jurisdictions

The Company currently has the following tax years open to examination by major taxing jurisdictions:



	Tax Years:
United States Federal	2013 - 2015
State of California	2013 - 2015
State of Massachusetts	2012 - 2015
State of Oregon	2013 - 2015
Sweden	2012 - 2015
United Kingdom	2012 - 2015
Belgium	2011 - 2015