Entity information:
Income Taxes

Income (loss) before income taxes consisted of the following:
Year Ended December 31,
2017
 
2016
 
2015
 
(In thousands)
U.S.
$
12,303

 
$
33,051

 
$
22,414

Foreign
29,959

 
30,190

 
(54,187
)
Income (loss) before income taxes
$
42,262

 
$
63,241

 
$
(31,773
)


The provision for income taxes consisted of the following:
Year Ended December 31,
2017
 
2016
 
2015
 
(In thousands)
Current:
 
 
 
 
 
U.S. federal and state
$
9,077

 
$
5,196

 
$
5,716

Foreign
8,320

 
9,838

 
3,996

Deferred:
 
 
 
 
 
U.S. federal and state
389

 
9,788

 
5,786

Foreign
(2,747
)
 
743

 
(1,666
)
Provision for income taxes
$
15,039

 
$
25,565

 
$
13,832



Net cash payments for income taxes were $15,574,000, $16,170,000, and $9,690,000 in 2017, 2016, and 2015, respectively.

The provision for income taxes is reconciled to the federal statutory income tax rate of 35% as follows:
Year Ended December 31,
2017
 
2016
 
2015
 
(In thousands)
Federal income taxes at statutory rate
$
14,792

 
$
22,134

 
$
(11,121
)
State income taxes, net of federal benefit
1,349

 
2,280

 
1,872

Goodwill impairment
428

 
—

 
15,824

Foreign taxes
(3,226
)
 
2,273

 
3,804

Change in valuation allowance
2,913

 
(2,196
)
 
3,643

Research and development credits
(448
)
 
(429
)
 
(1,912
)
Foreign tax credits
(2,002
)
 
(865
)
 
(651
)
Nondeductible meals and entertainment
1,222

 
1,111

 
1,441

Tax Act-revaluation of deferred taxes
(3,756
)
 
—

 
—

Tax Act-transition tax, net of credits
7,550

 
—

 
—

Benefit of international restructuring
(2,989
)
 
—

 
—

Tax rate changes
(212
)
 
(71
)
 
412

Other
(582
)
 
1,328

 
520

Provision for income taxes
$
15,039

 
$
25,565

 
$
13,832



The Company's consolidated effective income tax rate may change periodically due to changes in enacted statutory tax rates, changes in tax law or policy, changes in the composition of taxable income from the countries in which it operates, the Company's ability to utilize net operating loss and tax credit carryforwards, and changes in unrecognized tax benefits. The Company's 2017 effective income tax rate was impacted by the Tax Act in the U.S. and international restructuring activities. The Company's 2015 effective income tax rate was distortive, primarily due to the largely nondeductible non-cash goodwill impairment charge, the Company's inability to recognize tax benefits for certain international net operating losses, and fluctuations in the mix of income earned. Additionally, 2015 losses in certain operations, including losses due to restructuring and special charges, were in jurisdictions with lower tax rates or where the losses are unable to be benefited.

On December 22, 2017, the Tax Act was enacted. The changes include, but are not limited to: a federal corporate rate reduction from 35% to 21%, limitations on the deductibility of interest expense and executive compensation, creation of a new minimum tax on global intangible low taxed income (“GILTI”), and a one-time U.S. tax liability on those earnings which have not previously been repatriated to the U.S. (the “Transition Tax”) as a result of the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system. At December 31, 2017, the Company has not fully completed its accounting for the tax effects of enactment of the Tax Act in accordance with Staff Accounting Bulletin ("SAB 118") as described in Note 1, “Significant Accounting and Reporting Policies.” However, in certain cases, the Company has made a reasonable estimate of the effects on its existing deferred tax balances and the one-time Transition Tax based on the Tax Act guidance that currently exists. For the items for which the Company was able to determine a reasonable estimate, a provisional tax expense was recognized of $3.8 million, which is included as a component of income tax expense from continuing operations. These adjustments, which are described in further detail below, increased the Company's effective tax rate for 2017 by 9.0%.

The Company remeasured all domestic deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. However, the Company is still analyzing certain aspects of the Tax Act and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the remeasurement of our domestic deferred tax balance resulted in a tax benefit of $3.8 million.

The one-time Transition Tax is based on our total post-1986 earnings and profits ("E&P") in foreign jurisdictions, which was not previously subject to U.S. income taxes. The Company recorded a provisional amount for its one-time Transition Tax liability for all of its controlled foreign corporations, resulting in an increase in income tax expense of $7.6 million, net of foreign tax credits generated in the current year. The residual tax due will be offset by foreign tax credit carryforwards and is not anticipated to result in a cash tax liability. The Transition Tax is based in part on the total post 1986 foreign E&P and the amount of those earnings held in cash and other specified assets. The Transition Tax may change when the Company finalizes the calculation of post-1986 foreign E&P, which was not previously subject to U.S. taxation.

No additional income or withholding taxes have been provided for any undistributed foreign earnings, including those subject to the Transition Tax nor have any taxes been provided for the outside basis difference inherent in these entities as these amounts continue to be indefinitely reinvested in foreign operations. Additionally, due to withholding tax, basis computations, and other related tax considerations, it is not practicable to estimate any taxes to be provided on outside basis differences at this time. The ultimate tax impact related to the Tax Act may differ, possibly materially, due to further refinement of our calculations, changes in interpretation and assumptions, or issuance of additional guidance issued by the relevant tax authorities.

The Company has not completed its accounting for the income tax effects of certain elements of the Tax Act, including: GILTI, executive compensation, Transition Tax including associated foreign tax credits, and state taxes. Additionally, any changes to these provisional estimates would require the Company to reassess the realizability of its domestic deferred tax assets. Due to the complexity of the new tax rules of the Tax Act, we are continuing to evaluate these provisions of the Tax Act and whether GILTI taxes are recorded as a current period expense when incurred or whether such amounts should be factored into a company's measurement of its deferred taxes. As a result, the Company has not included an estimate of the tax impacts related to GILTI for the period ended December 31, 2017. The Company will continue to refine these estimates in accordance with SAB 118.

Deferred income taxes consisted of the following at December 31, 2017 and 2016:
 
2017
 
2016
 
(In thousands)
Accounts receivable allowance
$
55

 
$
(6,148
)
Accrued compensation
8,741

 
13,862

Accrued pension liabilities
12,482

 
33,295

Self-insured risks
5,831

 
9,304

Deferred revenues
6,793

 
9,949

Accrued rent
3,380

 
1,511

Interest
6,146

 
5,258

Tax credit carryforwards
18,490

 
24,784

Loss carryforwards
29,655

 
23,518

Other
1,913

 
895

Gross deferred income tax assets
93,486

 
116,228

Unbilled revenues
12,689

 
13,917

Depreciation and amortization
38,339

 
58,985

Other post-retirement benefits
116

 
235

Gross deferred income tax liabilities
51,144

 
73,137

Net deferred income tax assets before valuation allowance
42,342

 
43,091

Valuation allowance
(18,829
)
 
(14,498
)
Net deferred income tax assets
$
23,513

 
$
28,593

Amounts recognized in the Consolidated Balance Sheets consist of :
 

 
 

Long-term deferred income tax assets included in "Deferred income tax assets"
24,359

 
30,379

Long-term deferred income tax liabilities included in "Other noncurrent liabilities"
(846
)
 
(1,786
)
Net deferred income tax assets
$
23,513

 
$
28,593



At December 31, 2017, the Company had deferred tax assets related to loss carryforwards of $30,074,000, before netting of unrecognized tax benefits of $419,000. An estimated $17,266,000 of the deferred tax assets will not expire, and $12,808,000 will expire over the next 20 years if not utilized by the Company.

Changes in the Company's deferred tax valuation allowance are recorded as adjustments to the provision for income taxes. An analysis of the Company's deferred tax asset valuation allowances is as follows for the years ended December 31, 2017, 2016, and 2015.
 
2017
 
2016
 
2015
 
(In thousands)
Balance, beginning of year
$
14,498

 
$
17,204

 
$
15,231

Other changes
4,331

 
(2,706
)
 
1,973

Balance, end of year
$
18,829

 
$
14,498

 
$
17,204



Changes to the valuation allowance for the year ended December 31, 2017 were primarily due to losses in certain of the Company’s international operations and domestic operations impacting state NOLs. For the year ended December 31, 2016 the change was primarily due to release of valuation allowances based on expected utilization of deferred tax assets. For the year ended December 31, 2015 the change was primarily due to losses in certain of the Company's international operations.

A reconciliation of the beginning and ending balance of unrecognized income tax benefits follows: 
 
(In thousands)
Balance at December 31, 2014
$
5,897

Additions for tax provisions related to the current year
229

Reductions for tax positions related to the current year
(2,224
)
Additions for tax positions related to prior years
$
2,349

Lapses of applicable statutes of limitation
(64
)
Balance at December 31, 2015
6,187

Additions for tax provisions related to the current year
159

Reductions for tax positions related to prior years
$
(989
)
Additions for tax positions related to prior years
278

Lapses of applicable statutes of limitation
$
(166
)
Balance at December 31, 2016
5,469

Additions for tax provisions related to the current year
6,318

Reductions for tax positions related to prior years
(41
)
Additions for tax positions related to prior years
823

Lapses of applicable statutes of limitation
(1,232
)
Currency translation adjustment
(40
)
Balance at December 31, 2017
$
11,297



The Company accrues interest and, if applicable, penalties related to unrecognized tax benefits in income taxes. Total accrued interest expense at December 31, 2017, 2016, and 2015, was $275,000, $155,000, and $31,000, respectively.

Included in the total unrecognized tax benefits at December 31, 2017, 2016, and 2015 were $9,389,000, $3,332,000, and $3,899,000, respectively, of tax benefits that, if recognized, would affect the effective income tax rate.

The Company conducts business in a number of countries and, as a result, files U.S. federal and various state and foreign jurisdiction income tax returns. In the normal course of business, the Company is subject to examination by various taxing jurisdictions throughout the world, including Canada, the U.K., and the U.S. With few exceptions, the Company is no longer subject to income tax examinations for years before 2007.

Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, including interest and penalties, have been provided for any adjustments that are expected to result from those years.

The Company expects $6,200,000 in reductions to unrecognized income tax benefits within the next 12 months as a result of projected resolutions of income tax uncertainties.