Income Taxes (Tables)

12 Months Ended

Dec. 02, 2016

Income before income taxes, domestic and foreign

Income before income taxes for fiscal 2016, 2015 and 2014 consisted of the following (in thousands):



	2016		2015		2014
Domestic	$	805,749	$	589,371	$	191,563
Foreign	629,389		284,410		169,813
Income before income taxes	$	1,435,138	$	873,781	$	361,376

Provision for income taxes, current

The provision for income taxes for fiscal 2016, 2015 and 2014 consisted of the following (in thousands):



	2016			2015			2014
Current:
United States federal	$	94,396		$	204,834		$	26,822
Foreign	59,749			52,125			51,684
State and local	15,222			(14,975		)	4,713
Total current	169,367			241,984			83,219
Deferred:
United States federal	33,924			(31,011		)	(24,090		)
Foreign	(2,751		)	(9,368		)	(12,895		)
State and local	(9,287		)	(25,511		)	(6,476		)
Total deferred	21,886			(65,890		)	(43,461		)
Tax expense attributable to employee stock plans	75,103			68,136			53,223
Provision for income taxes	$	266,356		$	244,230		$	92,981

Income tax expense differs from the expected tax expense

Total income tax expense differs from the expected tax expense (computed by multiplying the U.S. federal statutory rate of 35% by income before income taxes) as a result of the following (in thousands):



	2016			2015			2014
Computed “expected” tax expense	$	502,298		$	305,824		$	126,481
State tax expense, net of federal benefit	10,636			(8,316		)	(4,411		)
Tax credits	(48,383		)	(25,967		)	(1,166		)
Differences between statutory rate and foreign effective tax rate	(133,778		)	(90,063		)	(33,769		)
Stock-based compensation, net of tax deduction	15,101			9,623			8,688
Resolution of income tax examinations	(68,003		)	(17,595		)	(1,896		)
Domestic manufacturing deduction benefit	(26,990		)	(16,800		)	(6,272		)
Tax charge for licensing acquired company technology to foreign subsidiaries	5,346			80,015			—
Other, net	10,129			7,509			5,326
Provision for income taxes	$	266,356		$	244,230		$	92,981

Deferred tax assets and liabilities

The tax effects of the temporary differences that gave rise to significant portions of the deferred tax assets and liabilities as of December 2, 2016 and November 27, 2015 are presented below (in thousands):



	2016			2015
Deferred tax assets:
Acquired technology	$	7,421		$	9,071
Reserves and accruals	35,440			33,251
Deferred revenue	21,039			17,110
Unrealized losses on investments	2,391			5,505
Stock-based compensation	56,353			59,103
Net operating loss carryforwards of acquired companies	31,305			20,877
Credit carryforwards	63,315			57,568
Capitalized expenses	15,571			17,566
Benefits relating to tax positions	39,492			43,095
Other	26,439			20,648
Total gross deferred tax assets	298,766			283,794
Deferred tax asset valuation allowance	(24,265		)	(21,286		)
Total deferred tax assets	274,501			262,508
Deferred tax liabilities:
Depreciation and amortization	78,619			62,143
Undistributed earnings of foreign subsidiaries	292,844			249,159
Acquired intangible assets	120,698			159,415
Total deferred tax liabilities	492,161			470,717
Net deferred tax liabilities	$	217,660		$	208,209

Gross amount of unrecognized tax benefits

During fiscal 2016 and 2015, our aggregate changes in our total gross amount of unrecognized tax benefits are summarized as follows (in thousands):



	2016			2015
Beginning balance	$	258,718		$	148,848
Gross increases in unrecognized tax benefits – prior year tax positions	6,047			3,784
Gross decreases in unrecognized tax benefits – prior year tax positions	(67,870		)	—
Gross increases in unrecognized tax benefits – current year tax positions	23,068			129,358
Settlements with taxing authorities	(33,265		)	(11,548		)
Lapse of statute of limitations	(8,456		)	(2,687		)
Foreign exchange gains and losses	171			(9,037		)
Ending balance	$	178,413		$	258,718