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INCOME TAX (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

The income tax provision (benefit) for the year ended December 31, 2017, the 2016 fiscal transition period and the years ended May 31, 2016 and 2015 consisted of the following:

	Year Ended December 31,				Seven Months Ended December 31,				Year Ended May 31,
	2017				2016				2016				2015
	(in thousands)
Current income tax provision (benefit):
Federal	$	79,903			$	22,859			$	26,493			$	25,022
State	3,468				3,443				5,454				3,905
Foreign	67,851				42,681				56,689				(10,346		)
	151,222				68,983				88,636				18,581
Deferred income tax provision (benefit):
Federal	(266,869		)		(36,447		)		(18,205		)		14,822
State	9,678				(1,842		)		(3,620		)		3,606
Foreign	4,582				4,967				3,884				70,986
	(252,609		)		(33,322		)		(17,941		)		89,414
	$	(101,387	)		$	35,661			$	70,695			$	107,995

Schedule of Income before Income Tax, Domestic and Foreign

The following presents income (loss) before income taxes for the year ended December 31, 2017, the 2016 fiscal transition period and the years ended May 31, 2016 and 2015:

	Year Ended December 31,				Seven Months Ended December 31,				Year Ended May 31,
	2017				2016				2016				2015
	(in thousands)
United States	$	29,692			$	(55,279	)		$	59,876			$	135,901
Foreign	362,991				228,623				301,036				281,209
	$	392,683			$	173,344			$	360,912			$	417,110

Schedule of Effective Income Tax Rate Reconciliation

Our effective tax rates for periods presented differ from the federal statutory rate for the year ended December 31, 2017, the 2016 fiscal transition period and the years ended May 31, 2016 and 2015 as follows:

	Year Ended December 31,			Seven Months Ended December 31,			Year Ended May 31,
	2017			2016			2016			2015
Federal U.S. statutory rate	35.0	%		35.0	%		35.0	%		35.0	%
State income taxes, net of federal income tax benefit	1.9			0.6			0.4			1.1
Federal U.S. transition tax	16.2			—			—			—
Federal U.S. rate reduction	(55.6	)		—			—			—
Foreign income taxes (primarily U.K.)	(12.0	)		(12.6	)		(10.1	)		(8.5	)
Foreign interest income not subject to tax	(2.2	)		(2.3	)		(2.6	)		(1.8	)
Taxes on unremitted earnings	—			—			(3.5	)		—
Share-based compensation expense	(4.2	)		—			—			—
Valuation allowance	(3.2	)		—			—			—
Other	(1.7	)		(0.1	)		0.4			1.0
Effective tax rate attributable to Global Payments	(25.8	)		20.6			19.6			26.8
Effective tax rate allocated to noncontrolling interests	—			—			—			(0.9	)
Effective tax rate	(25.8	)%		20.6	%		19.6	%		25.9	%

Schedule of Deferred Tax Assets and Liabilities

As of December 31, 2017 and 2016, principal components of deferred tax items were as follows:

	2017				2016
	(in thousands)
Deferred income tax assets:
Basis difference - U.K. business	$	8,961			$	11,145
Domestic net operating loss carryforwards	17,228				12,723
Foreign income tax credit carryforwards	—				7,140
Foreign net operating loss carryforwards	3,819				2,559
Share-based compensation expense	7,856				11,656
Accrued expenses	34,582				54,030
Other	18,502				9,101
	90,948				108,354
Less valuation allowance	(16,550		)		(16,611		)
	74,398				91,743
Deferred tax liabilities:
Acquired intangibles	410,563				663,922
Property and equipment	77,481				86,548
Other	10,087				1,956
	498,131				752,426
Net deferred income tax liability	$	(423,733	)		$	(660,683	)

The net deferred income taxes reflected on our consolidated balance sheets as of December 31, 2017 and 2016 are as follows:

	2017				2016
	(in thousands)
Noncurrent deferred income tax asset	$	13,146			$	15,789
Noncurrent deferred income tax liability	(436,879		)		(676,472		)
	$	(423,733	)		$	(660,683	)

Summary of Valuation Allowance

Changes to our valuation allowance during the year ended December 31, 2017, the 2016 fiscal transition period and the years ended May 31, 2016 and 2015 are summarized below (in thousands):

Balance at May 31, 2014	$	(7,199	)
Utilization of foreign net operating loss carryforwards	3,387
Other	(11		)
Balance at May 31, 2015	(3,823		)
Allowance for foreign income tax credit carryforward	(7,140		)
Allowance for domestic net operating loss carryforwards	(4,474		)
Allowance for domestic net unrealized capital loss	(1,526		)
Release of allowance of domestic capital loss carryforward	1,746
Other	98
Balance at May 31, 2016	(15,119		)
Allowance for domestic net operating loss carryforwards	(1,504		)
Release of allowance of domestic net unrealized capital loss	12
Balance at December 31, 2016	(16,611		)
Allowance for foreign net operating loss carryforwards	(6,469		)
Allowance for domestic net operating loss carryforwards	(3,793		)
Allowance for state credit carryforwards	(685		)
Rate change on domestic net operating loss and capital loss carryforwards	3,868
Utilization of foreign income tax credit carryforward	7,140
Balance at December 31, 2017	$	(16,550	)

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amounts of unrecognized income tax benefits, excluding penalties and interest, for the year ended December 31, 2017, the 2016 fiscal transition period and the years ended May 31, 2016 and 2015 is as follows:

	Year Ended December 31,				Seven Months Ended December 31,				Year Ended May 31,
	2017				2016				2016				2015
	(in thousands)
Balance at the beginning of the year	$	17,916			$	7,803			$	2,559			$	67,576
Additions based on income tax positions related to the current year	7,537				4,626				287				6,311
Additions related to acquisition	13,061				6,149				6,151				—
Additions for income tax positions of prior years	411				247				753				512
Effect of foreign currency fluctuations on income tax positions	27				(3		)		2				(5,713		)
Reductions for income tax positions of prior years	(7,285		)		(906		)		(123		)		(32		)
Settlements with income tax authorities	(449		)		—				(1,826		)		(504		)
Changes in judgment regarding tax position	—				—				—				(65,591		)
Balance at the end of the year	$	31,218			$	17,916			$	7,803			$	2,559

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the change in unrecognized tax benefits.

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