Income Taxes

The components of income before income taxes are as follows (in thousands):



	Fiscal Year Ended
	November 30, 2016			November 30, 2015			November 30, 2014
U.S.	$	78,477		$	62,813		$	68,882
Foreign	(113,757		)	(50,459		)	8,922
Total	$	(35,280	)	$	12,354		$	77,804

The provision for income taxes is comprised of the following (in thousands):



	Fiscal Year Ended
	November 30, 2016			November 30, 2015			November 30, 2014
Current:
Federal	$	12,934		$	18,418		$	7,796
State	3,178			1,526			765
Foreign	3,027			3,056			4,751
Total current	19,139			23,000			13,312
Deferred:
Federal	6,203			2,199			14,783
State	(1,963		)	60			730
Foreign	(2,933		)	(4,104		)	(479		)
Total deferred	1,307			(1,845		)	15,034
Total	$	20,446		$	21,155		$	28,346

A reconciliation of the U.S. Federal statutory rate to the effective tax rate is as follows (in thousands):



	Fiscal Year Ended
	November 30, 2016			November 30, 2015			November 30, 2014
Tax at U.S. Federal statutory rate	$	(12,348	)	$	4,324		$	27,231
Foreign rate differences	7,689			16,945			1,320
Effects of foreign operations included in U.S. Federal provision	(1,244		)	(996		)	(1,821		)
State income taxes, net	2,977			1,029			1,227
Research credits	(838		)	(681		)	(80		)
Domestic production activities deduction	(1,925		)	(1,750		)	(1,095		)
Tax-exempt interest	(76		)	(51		)	(80		)
Nondeductible stock-based compensation	740			1,875			2,152
Meals and entertainment	234			321			220
Compensation subject to 162(m)	—			228			350
Uncertain tax positions and tax settlements	(1,701		)	(332		)	(123		)
Prior period adjustment	(2,700		)	—			—
Release of valuation allowance on state research and development credits	(2,748		)	—			—
Goodwill Impairment	32,200			—			—
Other	186			243			(955		)
Total	$	20,446		$	21,155		$	28,346

During the preparation of our condensed consolidated financial statements for the three months ended May 31, 2016, we identified an error in our prior year income tax provision whereby income tax expense was overstated for the year ended November 30, 2015 by $2.7 million related to our tax treatment of an intercompany gain. We determined that the error is not material to the prior year financial statements. We also concluded that recording an out-of-period correction would not be material and therefore corrected this error by recording an out-of-period $2.7 million tax benefit in our interim financial statements for the periods ended May 31, 2016.

The components of deferred tax assets and liabilities are as follows (in thousands):



	November 30, 2016			November 30, 2015
Deferred tax assets:
Accounts receivable	$	360		$	628
Other assets	77			761
Accrued compensation	3,267			3,421
Accrued liabilities and other	3,207			4,945
Stock-based compensation	4,377			4,902
Deferred revenue	1,325			798
Tax credit and loss carryforwards	23,167			29,351
Gross deferred tax assets	35,780			44,806
Valuation allowance	(3,189		)	(8,160		)
Total deferred tax assets	32,591			36,646
Deferred tax liabilities:
Goodwill	(23,685		)	(21,580		)
Deferred revenue	—			—
Depreciation and amortization	(6,206		)	(11,207		)
Total deferred tax liabilities	(29,891		)	(32,787		)
Total	$	2,700		$	3,859

The valuation allowance primarily applies to net operating loss carryforwards and unutilized tax credits in jurisdictions or under conditions where realization is not more likely than not. The $5.0 million decrease in the valuation allowance during fiscal year 2016 primarily relates to release of the valuation allowance on state research and development tax credits and a valuation allowance on a foreign subsidiary that was liquidated during fiscal year 2016. The $1.5 million and $3.3 million decreases in the valuation allowance during fiscal years 2015 and 2014, respectively, primarily relate to foreign net operating loss carryforwards expiring unutilized.

At November 30, 2016, we have federal and foreign net operating loss carryforwards of $107.3 million expiring on various dates through 2034 and $0.8 million that may be carried forward indefinitely. In addition, we have state net operating loss carryforwards of $5.2 million expiring on various dates through 2022. At November 30, 2016, we have tax credit carryforwards of approximately $3.5 million expiring on various dates through 2031 and $2.1 million that may be carried forward indefinitely.

It is our intention to indefinitely reinvest the earnings of our non-U.S. subsidiaries. We have not provided for U.S. income taxes on the undistributed earnings of non-U.S. subsidiaries, which totaled $13.7 million as of November 30, 2016, as these earnings have been indefinitely reinvested. Any additional taxes that might be payable upon repatriation of our foreign earnings would not be significant.

As of November 30, 2016, the total amount of unrecognized tax benefits was $7.0 million, of which $3.8 million was recorded in other noncurrent liabilities on the consolidated balance sheet and $3.2 million of deferred tax assets, principally related to U.S and foreign net operating loss carry-forwards, have not been recorded.

A reconciliation of the balance of our unrecognized tax benefits is as follows (in thousands):



	Fiscal Year Ended
	November 30, 2016			November 30, 2015			November 30, 2014
Balance, beginning of year	$	4,779		$	1,711		$	1,022
Tax positions related to current year	1,106			107			849
Tax positions related to a prior period	1,638			—			—
Settlements with tax authorities	(21		)	(39		)	—
Tax positions acquired	—			4,464			—
Lapses due to expiration of the statute of limitations	(456		)	(1,464		)	(160		)
Balance, end of year	$	7,046		$	4,779		$	1,711

If recognized, all amounts of unrecognized tax benefits would affect the effective tax rate.

We recognize interest and penalties related to uncertain tax positions as a component of our provision for income taxes. In fiscal years 2016, 2015, and 2014 there was a minimal amount of estimated interest and penalties recorded in the provision for income taxes. We have accrued $0.3 million and $0.4 million of estimated interest and penalties at November 30, 2016 and 2015, respectively. We do not expect any significant changes to the amount of unrecognized tax benefits in the next twelve months.

The Internal Revenue Service completed their audit of our U.S. Federal income tax return for the years ended November 30, 2013 and November 30, 2014 with no significant changes. Our Federal income tax returns have been examined or are closed by statute for all years prior to fiscal year 2015. Our state income tax returns have been examined or are closed by statute for all years prior to fiscal year 2012, and we are no longer subject to audit for those periods.

Tax authorities for certain non-U.S. jurisdictions are also examining returns, none of which are material to our consolidated balance sheets, cash flows or statements of income. With some exceptions, we are generally no longer subject to tax examinations in non-U.S. jurisdictions for years prior to fiscal year 2011.