Entity information:
Income Taxes
The components of loss before provision for (benefit from) income taxes were as follows (in thousands):
 
Year Ended January 31,
 
2018
 
2017
 
2016
 
 
*As Adjusted
 
*As Adjusted
Domestic
$
(85,167
)
 
$
(190,043
)
 
$
(119,302
)
Foreign
(229,619
)
 
(195,470
)
 
(154,729
)
Total
$
(314,786
)
 
$
(385,513
)
 
$
(274,031
)

*
Adjusted to reflect the adoption of ASU No. 2014-09, Revenue from Contracts with Customers. For further information, see Note 2.
The provision for (benefit from) income taxes consisted of the following (in thousands):
 
Year Ended January 31,
 
2018
 
2017
 
2016
Current:
 
 
 
 
 
Federal
$
—

 
$
213

 
$
(2,012
)
State
177

 
17

 
489

Foreign
4,251

 
3,573

 
2,869

Total
4,428

 
3,803

 
1,346

 
 
 
 
 
 
Deferred:
 
 
 
 
 
Federal
(535
)
 
(466
)
 
—

State
(100
)
 
(52
)
 
—

Foreign
2,643

 
(4,099
)
 
(329
)
Total
2,008

 
(4,617
)
 
(329
)
Provision for (benefit from) income taxes
$
6,436

 
$
(814
)
 
$
1,017


The items accounting for the difference between income taxes computed at the federal statutory income tax rate and the provision for (benefit from) income taxes consisted of the following: 
 
Year Ended January 31,
 
2018
 
2017
 
2016
 
 
*As Adjusted
 
*As Adjusted
Federal statutory rate
33.8
 %
 
35.0
 %
 
35.0
 %
Effect of:
 
 
 
 
 
Foreign income at other than U.S. rates
(26.5
)%
 
(18.5
)%
 
(25.7
)%
Intercompany transactions
10.2
 %
 
4.2
 %
 
5.2
 %
Research tax credits
9.1
 %
 
6.4
 %
 
5.1
 %
State taxes, net of federal benefit
—
 %
 
—
 %
 
(0.2
)%
U.S. corporate tax rate reduction
(81.3
)%
 
—
 %
 
—
 %
Changes in valuation allowance
33.0
 %
 
(20.4
)%
 
(15.1
)%
Stock compensation
20.0
 %
 
(6.1
)%
 
(5.4
)%
Other
(0.4
)%
 
(0.4
)%
 
0.7
 %
 
(2.1
)%
 
0.2
 %
 
(0.4
)%

*
Adjusted to reflect the adoption of ASU No. 2014-09, Revenue from Contracts with Customers. For further information, see Note 2.
On December 22, 2017, the Tax Act was enacted into law and reduced the corporate income tax rate to 21% effective January 1, 2018. Accordingly, we adjusted our federal statutory rate to a blended rate of 33.8% for the fiscal year ended January 31, 2018. As a result of the Tax Act, and the reduction in the corporate income tax rate, the U.S. federal and state deferred tax assets were remeasured resulting in a $256 million reduction of net deferred tax assets which was offset by changes in our valuation allowance. The Tax Act includes a number of other provisions including the elimination of loss carrybacks and limitations on the use of future losses. The Tax Act imposes a one-time mandatory transition tax on accumulated foreign earnings and as of the measurement date of November 2, 2017, our foreign operations did not have accumulated income and, therefore, the transition tax did not apply.
The Tax Act requires complex computations to be performed that were not previously required in U.S. tax law, judgments to be made in interpretation of the provisions of the Tax Act, estimates in calculations, and the preparation and analysis of information not previously relevant or regularly produced. The U.S. Treasury Department, the Internal Revenue Service ("IRS"), and other standard-setting bodies could interpret or issue guidance on how provisions of the Tax Act will be applied or otherwise administered that is different from our current interpretation.
The Company has calculated its best estimate of the impact of the Tax Act in its year end income tax provision in accordance with its understanding of the Tax Act and guidance available as of the date of this filing. As we complete our analysis of the Tax Act, collect and prepare necessary data, and interpret any additional guidance, we may make adjustments to our initial assessment. Pursuant to Staff Accounting Bulletin No. 118, adjustments to the provisional amounts recorded by the Company as of January 31, 2018 that are identified within a subsequent measurement period of up to one year from the enactment date will be included as an adjustment to tax expense from continuing operations in the period the amounts are determined.    
As a result of our history of net operating losses, the current provision for income taxes relates to state income taxes and the current foreign provision from our profitable foreign entities.
Significant components of our deferred tax assets and liabilities were as follows (in thousands):
 
January 31,
 
2018
 
2017
 
 
*As Adjusted
Deferred tax assets:
 
 
 
Unearned revenue
$
27,934

 
$
40,810

Other reserves and accruals
14,945

 
23,134

Federal net operating loss carryforwards
422,235

 
110,974

State and foreign net operating loss carryforwards
81,757

 
25,783

Property and equipment
—

 
24,754

Share-based compensation
39,294

 
70,642

Research and development credits
110,694

 
78,283

Other
5,622

 
23,209

 
702,481

 
397,589

Valuation allowance
(625,030
)
 
(292,365
)
Deferred tax assets, net of valuation allowance
77,451

 
105,224

Deferred tax liabilities:
 
 
 
Intangibles
(1,453
)
 
(3,742
)
Intercompany transactions
(40,338
)
 
(62,800
)
Other prepaid assets
(742
)
 
(1,079
)
Deferred commissions
(29,231
)
 
(33,267
)
Property and equipment
(3,803
)
 
—

 
(75,567
)
 
(100,888
)
Net deferred tax assets
$
1,884

 
$
4,336


*
Adjusted to reflect the adoption of ASU No. 2014-09, Revenue from Contracts with Customers. For further information, see Note 2.
We adopted ASU No. 2016-09 effective February 1, 2017, and recorded $448 million of U.S deferred tax assets related to excess tax benefits from share-based award activity as of January 31, 2017, which was fully offset by an increase in the valuation allowance.
We regularly assess the need for a valuation allowance against our deferred tax assets by considering both positive and negative evidence related to whether it is more likely than not that our deferred tax assets will be realized. In evaluating the need for a valuation allowance, we consider the cumulative losses in recent years as a significant piece of negative evidence that is generally difficult to overcome. As of January 31, 2018, we continue to maintain a full valuation allowance against our U.S. federal and state deferred tax assets.
As of January 31, 2018, we recorded a valuation allowance of $625 million for the portion of the deferred tax asset that we do not expect to be realized. The valuation allowance on our net deferred tax assets increased by $333 million and $100 million in fiscal 2018 and 2017, respectively. The increase in the valuation allowance is mainly due to an increase in our deferred tax assets on our net operating losses as a result of the recognition of excess tax benefits from share-based compensation resulting from the adoption of ASU No. 2016-09. This was partially offset by a decrease in our federal deferred tax assets resulting from the re-measurement of the corporate tax rate from 35% to 21%. We will continue to reassess the future realization of the deferred tax assets and adjust the valuation allowance accordingly.
As of January 31, 2018, we had approximately $2.0 billion of federal, $1.3 billion of state and $25 million of foreign net operating loss carryforwards available to offset future taxable income. If not utilized, the federal and state net operating loss carryforwards expire in varying amounts between fiscal 2019 and 2038. The foreign net operating losses do not expire and may be carried forward indefinitely.
We also had approximately $83 million of federal and $87 million of California research and development tax credit carryforwards as of January 31, 2018. The federal credits expire in varying amounts between fiscal 2026 and 2038. The California research credits do not expire and may be carried forward indefinitely.
Our ability to utilize the net operating loss and tax credit carryforwards in the future may be subject to substantial restrictions in the event of past or future ownership changes as defined in Section 382 of the Internal Revenue Code of 1986, as amended, and similar state tax law.
A reconciliation of the gross unrecognized tax benefit is as follows (in thousands):
 
Year Ended January 31,
 
2018
 
2017
 
2016
Unrecognized tax benefits at the beginning of the period
$
116,801

 
$
98,460

 
$
88,663

Additions for tax positions taken in prior years
1,500

 
3,981

 
2,818

Reductions for tax positions taken in prior years
(8,121
)
 
—

 
(881
)
Decrease for tax positions taken in prior years due to federal rate reduction
(10,062
)
 
—

 
—

Additions for tax positions related to the current year
7,731

 
14,475

 
9,144

Reductions related to a lapse of applicable statute of limitations
—

 
(115
)
 
(1,284
)
Unrecognized tax benefits at the end of the period
$
107,849

 
$
116,801

 
$
98,460


Our policy is to include interest and penalties related to unrecognized tax benefits within our provision for income taxes. Of the total amount of unrecognized tax benefits of $108 million, $1 million, if recognized, would impact the effective tax rate, as of January 31, 2018.
The reduction for tax positions taken in prior years is mainly due to the re-measurement of certain U.S. uncertain tax benefits from 35% to 21% under the Tax Act. We do not expect the total amounts of unrecognized tax benefits will significantly increase or decrease within 12 months of the reporting date.
We file federal, state, and foreign income tax returns in jurisdictions with varying statutes of limitations. Due to our net operating loss carryforwards, our income tax returns generally remain subject to examination by federal and most state and foreign tax authorities.
On December 1, 2015, the United States Tax Court issued its final decision with respect to Altera Corporation’s litigation with the IRS. The litigation relates to the treatment of share-based compensation expense in an inter-company cost-sharing arrangement with the taxpayer’s foreign subsidiary for fiscal 2004 through 2007. In its final decision, the Court accepted Altera’s position of excluding share-based compensation in its cost sharing arrangement and concluded that the related IRS Regulations were invalid. Subsequent to the decision, the IRS filed its appeal on February 23, 2016. Although the IRS has appealed the decision, based on the facts and circumstances of the Tax Court Case, we believe that it is more likely than not that the decision will be upheld. We have therefore recorded the effects of the decision and determined that there was no material impact to our effective tax rate and income tax expense due to our current full valuation allowance position. We will continue to monitor ongoing developments and potential impacts to our consolidated financial statements.