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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2018
Income Taxes |
Income (loss) from operations before income taxes | The provision for income taxes is based on income (loss) before provision for income taxes as follows (in thousands):
|  | Year Ended December 31, |
|  | 2018 |  | 2017 |  | 2016 |
U.S. |  | $ | 478,050 |  | $ | 36,493 |  | $ | 272,574 |
Non-U.S. |  |  | (362,703) |  |  | (348,783) |  |  | (165,170) |
Income (loss) before provision for income taxes |  | $ | 115,347 |  | $ | (312,290) |  | $ | 107,404 |
Schedule of provision (benefit) for income taxes | Our provision for income taxes consists of the following (in thousands):
|  | Year Ended December 31, |
|  | 2018 |  | 2017 |  | 2016 |
Current: |  |  |  |  |  |  |  |  |  |
State |  | $ | 5,010 |  | $ | 486 |  | $ | 2,700 |
Foreign |  |  | 1,303 |  |  | 1,171 |  |  | 482 |
|  |  | 6,313 |  |  | 1,657 |  |  | 3,182 |
Deferred: |  |  |  |  |  |  |  |  |  |
State |  |  | 111 |  |  | (805) |  |  | — |
Foreign |  |  | (570) |  |  | — |  |  | — |
|  |  | (459) |  |  | (805) |  |  | — |
Total provision for income taxes |  | $ | 5,854 |  | $ | 852 |  | $ | 3,182 |
Schedule of reconciliation of income taxes at the U.S. federal statutory rate to the provision for income taxes | A reconciliation of income taxes at the U.S. federal statutory rate to the provision for income taxes is as follows (in thousands):
|  | Year Ended December 31, |
|  | 2018 |  | 2017 |  | 2016 |
Provision (benefit) at U.S. federal statutory rate 1 |  | $ | 24,223 |  | $ | (109,302) |  | $ | 37,591 |
Unbenefited net operating losses and tax credits |  |  | (51,861) |  |  | (99,254) |  |  | (47,410) |
Excess tax benefits related to share-based compensation |  |  | (8,233) |  |  | (81,021) |  |  | (29,541) |
Deferred tax impact of Tax Cuts and Jobs Act of 2017 |  |  | — |  |  | 196,751 |  |  | — |
Foreign tax rate differential |  |  | 37,061 |  |  | 86,777 |  |  | 39,975 |
Non-deductible officer compensation |  |  | 4,114 |  |  | 6,351 |  |  | 2,061 |
Other |  |  | 550 |  |  | 550 |  |  | 506 |
Provision for income taxes |  | $ | 5,854 |  | $ | 852 |  | $ | 3,182 |
Schedule of significant components of deferred tax assets and liabilities | Significant components of our deferred tax assets and liabilities are as follows (in thousands):
|  | December 31, |
|  | 2018 |  | 2017 |
Deferred tax assets: |  |  |  |  |  |  |
Net operating loss carry forwards |  | $ | 148,142 |  | $ | 259,189 |
Federal and state research credits |  |  | 402,798 |  |  | 333,311 |
Capitalized research and development |  |  | 53,871 |  |  | 37,044 |
Deferred revenue and accruals |  |  | 9,443 |  |  | 11,721 |
Non-cash compensation |  |  | 58,194 |  |  | 44,647 |
Acquisition-related contingent consideration |  |  | 43,676 |  |  | 41,831 |
Intangibles, net |  |  | 93,730 |  |  | 94,249 |
Long term investments |  |  | 23,621 |  |  | 12,244 |
Other |  |  | 22,211 |  |  | 12,815 |
Total gross deferred tax assets |  |  | 855,686 |  |  | 847,051 |
Less valuation allowance for deferred tax assets |  |  | (836,992) |  |  | (834,783) |
Net deferred tax assets |  | $ | 18,694 |  | $ | 12,268 |
Deferred tax liabilities: |  |  |  |  |  |  |
Property and equipment |  | $ | (17,424) |  | $ | (11,463) |
Total gross deferred tax liabilities |  |  | (17,424) |  |  | (11,463) |
Net deferred income taxes |  | $ | 1,270 |  | $ | 805 |
Schedule of operating loss and tax credit carryforwards | As of December 31, 2018, the Company has net operating loss (“NOL”) carryforwards, research and development credit carryforwards and orphan drug tax credit carryforwards as follows (in thousands):
|  | Amount |  | Expiring if not utilized |
Net operating loss carryforwards |  |  |  |  |  |
Federal |  | $ | 216,970 |  | 2034 |
State |  |  | 343,022 |  | 2020 through 2037; indefinite |
Foreign |  |  | 757,312 |  | 2020 through 2025 |
Research and development credit carryforwards |  |  |  |  |  |
Federal |  |  | 197,400 |  | 2019 through 2038 |
State |  |  | 25,247 |  | 2021 through 2032; indefinite |
Orphan drug tax credit carryforwards |  |  | 210,242 |  | 2029 through 2038 |
Unrecognized tax benefits | The following table summarizes the gross amounts of unrecognized tax benefits (in thousands):
|  | Year Ended December 31, |
|  | 2018 |  | 2017 |
Balance at beginning of year |  | $ | 18,022 |  | $ | 10,798 |
Additions related to prior periods tax positions |  |  | 2,098 |  |  | 2,571 |
Reductions related to prior periods tax positions |  |  | — |  |  | (821) |
Additions related to current period tax positions |  |  | 2,466 |  |  | 5,555 |
Reductions due to lapse of applicable statute of limitations |  |  | (130) |  |  | (81) |
Currency translation adjustment |  |  | (61) |  |  | — |
Balance at end of year |  | $ | 22,395 |  | $ | 18,022 |

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