Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Pre-tax earnings by significant geographical locations

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



	Year Ended December 31,
	2018		2017		2016
United States	$	165,719	$	143,924	$	124,500
Foreign	141,384		135,141		151,457
	$	307,103	$	279,065	$	275,957

Provisions for income taxes

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



	Year Ended December 31,
	2018			2017			2016
Current tax expense (benefit):
Federal	$	17,900		$	112,673		$	36,771
State	5,980			5,035			5,785
Foreign	(16,008		)	19,689			64,109
	7,872			137,397			106,665
Deferred tax expense (benefit):
Federal	1,273			34,857			1,404
State	235			473			267
Foreign	15,298			(885		)	995
	16,806			34,445			2,666
Total income tax provision	$	24,678		$	171,842		$	109,331

Deferred tax assets (liabilities)

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



	December 31,
	2018			2017
Deferred tax assets, non-current	100,620			21,001
Deferred tax liabilities, non-current	(22,927		)	(12,496		)
Net deferred tax assets	$	77,693		$	8,505

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,
	2018			2017
Deferred tax assets:
Accrued liabilities and allowances	$	19,783		$	20,425
Tax credit and loss carry-forwards	30,831			30,979
Stock-based compensation	12,461			11,715
Inventory basis differences	10,749			8,555
Deferred revenue	2,900			2,732
Intangible assets	20,882			—
Unremitted earnings of foreign subsidiaries	2,121			—
Other assets	1,156			2,527
Gross deferred tax assets	100,883			76,933
Valuation allowance	(3,196		)	(3,392		)
Total deferred tax assets, net	97,687			73,541
Deferred tax liabilities:
Intangible assets	—			(29,117		)
Property and equipment	(14,070		)	(16,499		)
Unremitted earnings of foreign subsidiaries	—			(15,100		)
Other liabilities	(5,924		)	(4,320		)
Total deferred tax liabilities	(19,994		)	(65,036		)
Net deferred tax assets	$	77,693		$	8,505

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,
	2018		2017		2016
Statutory federal tax rate	21.0	%	35.0	%	35.0	%
(Decrease) increase in rates resulting from:
State taxes	2.5		1.8		2.3
Difference between statutory rate and foreign effective rate	(0.2	)	(10.7	)	(11.3	)
Foreign, federal and state income tax credits	(1.5	)	(2.0	)	(1.2	)
European Union state aid matter	(10.8	)	0.1		14.4
United States transition tax	(3.4	)	23.8		—
Tax rate change on deferred items	—		5.1		—
Unremitted earnings of foreign subsidiaries	—		5.4		—
Other	0.4		3.1		0.4
Effective tax rate	8.0	%	61.6	%	39.6	%

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,
	2018			2017			2016
Balance, beginning of year	$	77,275		$	51,851		$	14,967
Increases related to current year tax positions	—			17,264			40,840
Increases related to prior year tax positions	2,229			5,022			456
Lapse of statute of limitations	(1,558		)	(1,260		)	(4,070		)
Settlements	(40,514		)	(986		)	(342		)
Change due to currency translation	(4,227		)	5,384			—
Balance, end of year	$	33,205		$	77,275		$	51,851

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	2015 - 2017
State of California	2014 - 2017
State of Massachusetts	2014 - 2017
State of Oregon	2015 - 2017
Sweden	2012 - 2017
United Kingdom	2014 - 2017
Belgium	2011 - 2017