
	2019		2018		2017
Continuing operations	$	(45,409)	$	(65,723)	$	(45,184)
Discontinued operations	470,346		42,952		49,718
Stockholders’ equity:
Excess tax benefits from stock-based compensation	—		—		(2,183)
	$	424,937	$	(22,771)	$	2,351


	2019		2018		2017
Current:
U.S. Federal	$	(39,534)	$	(33,626)	$	(33,289)
Non-U.S.	323		115		188
State	(16,092)		(4,414)		(976)
	(55,303)		(37,925)		(34,077)
Deferred:
U.S. Federal	1,245		(26,884)		(8,934)
Non-U.S.	149		21		(3)
State	8,500		(935)		(2,170)
	9,894		(27,798)		(11,107)
Total	$	(45,409)	$	(65,723)	$	(45,184)

Loss before income taxes, as shown above, is based on the location of the entity to which such losses are attributable. However, since such losses may be subject to taxation in more than one country, the income tax provision shown above as U.S. or non-U.S. may not correspond to the loss shown above.

Below is a reconciliation of expected income tax benefit computed by applying the U.S. federal statutory rate of 21.0% for fiscal 2019, the blended U.S. federal statutory rate of 31.5% for fiscal 2018, and the U.S. federal statutory rate of 35.0% for fiscal 2017, respectively, to loss before income taxes to actual income tax benefit from continuing operations (dollars in thousands):


	2019		2018		2017
Computed expected income tax (benefit)	$	(37,665)	$	(41,967)	$	(45,766)
Increase (reduction) in income taxes resulting from:
State income taxes, net of federal benefit	(5,998)		(3,329)		(2,045)
Research and other tax credits	(3,141)		(1,229)		(1,174)
Effect of federal rate change on deferred taxes	—		(24,565)		—
Nondeductible expenses	426		431		418

Stock-based compensation	(5,350)		4,452		2,150
Non-U.S. subsidiaries taxed at other rates	1,343		332		714
Adjustment to valuation allowances	5,204		—		—


Other, net	(228)		152		519
	$	(45,409)	$	(65,723)	$	(45,184)

On December 22, 2017, the U.S. enacted significant tax law changes following the passage of H.R.1, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (the “Tax Act”) (previously known as “The Tax Cuts and Jobs Act”). The Tax Act included significant changes to existing tax law, including a permanent reduction to the U.S. federal corporate income tax rate from 35% to 21%, a one-time repatriation tax on deferred foreign income, and numerous other changes to business-related deductions.

The permanent reduction to the U.S. federal corporate income tax rate from 35% to 21% became effective January 1, 2018 (the “Effective Date”). Because the Effective Date did not fall on the first day of our fiscal year ended March 31, 2018, we are required to apply a blended tax rate for the entire fiscal year based on a weighted daily average

rate. As a result of the Tax Act, our U.S. federal statutory corporate income tax rate is 21% for the fiscal year ended March 31, 2019 and 31.5% for the fiscal year ended March 31, 2018.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at March 31, 2019 and 2018 are presented below (dollars in thousands).


	2019		2018
Deferred tax assets:
Accrued expenses	$	3,332	$	5,737
Deferred revenue	19		437
Net operating loss carryforwards	13,638		40,783
Stock-based compensation	10,770		10,884
Nonqualified deferred compensation	3,147		3,217
Capital loss carryforward	—		2,099
Tax credit carryforwards	—		13,427
Other	3,102		185
Total deferred tax assets	34,008		76,769
Less valuation allowance	(18,947)		(38,321)
Net deferred tax assets	15,061		38,448
Deferred tax liabilities:
Prepaid expenses	$	(1,222)	$	(4,111)
Capitalized software costs	(636)		(7,343)
Property and equipment	(440)		(6,304)
Intangible assets	(5,631)		(42,402)
Deferred commissions	(2,586)		—
Accrued expenses	(4,550)		(7,828)
Total deferred tax liabilities	(15,065)		(67,988)
Net deferred tax liabilities	$	(4)	$	(29,540)

At March 31, 2019, the Company has net operating loss carryforwards of approximately $8.3 million and $22.6 million for U.S. federal and state income tax purposes, respectively. The net operating loss carryforwards will expire in various amounts and will completely expire if not used by 2039. The Company has foreign net operating loss carryforwards of approximately $37.4 million. Of this amount, $33.9 million do not have expiration dates. The remainder expires in various amounts and will completely expire if not used by 2024.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Realization of the Company’s net deferred tax assets is dependent upon its generation of sufficient taxable income of the proper character in future years in appropriate tax jurisdictions to obtain benefit from the reversal of temporary differences and net operating loss carryforwards.

Based upon the weight of available evidence, including the Company's disposal of the AMS business and the Company’s history of losses from continuing operations, management believes that it is not more likely than not the Company will realize the benefits of the deductible temporary differences and net operating loss carryforwards. Accordingly, the Company has established valuation allowances against its deferred tax assets.

The following table sets forth changes in the total gross unrecognized tax benefits for the fiscal years ended March 31, 2019, 2018 and 2017 (dollars in thousands):


	2019		2018		2017
Balance at beginning of period	$	15,415	$	12,870	$	10,906
Increases related to prior year tax positions	325		1,134		307
Decreases related to prior year tax positions	(292)		(208)		(466)
Increases related to current year tax positions	5,483		3,172		2,123

Lapse of statute of limitations	(1,331)		(1,553)		—
Balance at end of period	$	19,600	$	15,415	$	12,870

Gross unrecognized tax benefits as of March 31, 2019 was $19.6 million, which would reduce the Company’s effective tax rate in future periods if and when realized. The Company reports accrued interest and penalties related to unrecognized tax benefits in income tax expense. The combined amount of accrued interest and penalties related to tax positions on tax returns was approximately $0.4 million as of March 31, 2019. There was no material change in accrued interest and penalties during fiscal 2019. The Company anticipates a reduction of $0.8 million of unrecognized tax benefits within the next 12 months, as a result of a lapse of the statute of limitations.

The Company files a consolidated U.S. federal income tax return and tax returns in various state and local jurisdictions. The Company’s subsidiaries also file tax returns in various foreign jurisdictions in which they operate. In the U.S., the statute of limitations for Internal Revenue Service examinations remains open for the Company’s federal income tax returns for fiscal years after 2015. The Company’s federal income tax return for fiscal 2017 is currently under examination by the Internal Revenue Service. The status of U.S. federal, state and foreign tax examinations varies by jurisdiction. The Company does not anticipate any material adjustments to its financial statements resulting from tax examinations currently in progress.