Entity information:
INCOME TAXES
The Company files tax returns as a separate company in various local and state jurisdictions, the U.K. and certain other foreign jurisdictions.
Income/(loss) before income taxes was comprised of the following (in thousands):
 
Year Ended December 31,
 
2016
 
2015
 
2014
Domestic
$
(101,943
)
 
$
(93,156
)
 
$
21,432

Foreign
13,686

 
11,896

 
9,584

Income/(loss) before income taxes
$
(88,257
)
 
$
(81,260
)
 
$
31,016


The provision/(benefit) for income taxes was comprised of the following (in thousands):
 
Year Ended December 31,
 
2016
 
2015
 
2014
Current:
 
 
 
 
 
Federal
$
16,297

 
$
11,588

 
$
14,433

State
2,116

 
2,423

 
1,691

Foreign
2,709

 
2,379

 
2,494

 
21,122

 
16,390

 
18,618

Deferred:
 
 
 
 
 
Federal
(20,895
)
 
(13,003
)
 
(8,411
)
State
(4,809
)
 
(3,562
)
 
(286
)
Foreign
(484
)
 
(943
)
 
(433
)
 
(26,188
)
 
(17,508
)
 
(9,130
)
Provision/(benefit) for income taxes
$
(5,066
)
 
$
(1,118
)
 
$
9,488


 
The provision for income taxes reconciled to the amount computed by applying the statutory federal rate to income before taxes as follows (in thousands):
 
Year Ended December 31,
 
2016
 
2015
 
2014
Federal taxes at statutory rate of 35%
$
(30,890
)
 
$
(28,441
)
 
$
10,855

State income taxes, net
(749
)
 
(326
)
 
998

Nondeductible goodwill
29,336

 
29,678

 
—

Effects of foreign income
(3,283
)
 
(2,972
)
 
(2,538
)
Foreign distribution
4,723

 
3,574

 
3,931

Foreign tax credit
(2,664
)
 
(2,232
)
 
(3,562
)
Deferred tax adjustment - U.K. statutory rate reduction
(354
)
 
(819
)
 
—

Deferred tax adjustment - statutory state rate change
(726
)
 
(550
)
 
—

Change in valuation allowance
—

 
—

 
(2,824
)
Transaction-related costs
—

 
61

 
1,803

Other items, net
(459
)
 
909

 
825

Provision/(benefit) for income taxes
$
(5,066
)
 
$
(1,118
)
 
$
9,488


The significant components of net deferred tax balances were as follows (in thousands): 
 
December 31,
 
2016
 
2015
Deferred tax assets:
 
 
 
Net operating loss and foreign tax credit carryforwards
$
2,538

 
$
3,333

Allowances and reserves
4,253

 
4,457

Stock-based compensation
6,671

 
3,724

Deferred compensation
6,072

 
8,038

Other, net
4,624

 
4,422

Total gross deferred tax assets
24,158

 
23,974

Less: valuation allowance
—

 
—

Total deferred tax assets, net of valuation allowance
24,158

 
23,974

Deferred tax liabilities:
 
 
 
Amortization of intangible assets
(88,304
)
 
(110,392
)
Depreciation and amortization
(20,297
)
 
(24,593
)
Other, net
(1,489
)
 
(1,758
)
Total deferred tax liabilities
(110,090
)
 
(136,743
)
Total net deferred tax liabilities
$
(85,932
)
 
$
(112,769
)

 
In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence, including our operating results, ongoing tax planning, and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis.
At December 31, 2016, 2015 and 2014, the Company had gross unrecognized tax benefits totaling $0.1 million, $0.3 million and $0.6 million, respectively, of which $0.1 million, $0.2 million, and $0.5 million, respectively, would have an impact on the Company’s effective income tax rate, if recognized. A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits (before federal impact of state items), excluding interest and penalties, was as follows (in thousands):
 
Year Ended December 31,
 
2016
 
2015
 
2014
Beginning balance
$
269

 
$
542

 
$
620

Additions for prior year tax positions
115

 
107

 
—

Reductions for prior year tax positions
(110
)
 
(32
)
 
(30
)
Settlements
(78
)
 
(184
)
 
—

Reductions due to lapse in statutes of limitations
(56
)
 
(164
)
 
(48
)
Ending balance
$
140

 
$
269

 
$
542


The Company is currently under audit by the Internal Revenue Service (“IRS”) and certain state, local, and foreign tax authorities. The examinations are in varying stages of completion. The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by tax authorities. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, case law developments and closing of statutes of limitations. Such adjustments are reflected in the provision for income taxes, as appropriate. Tax years prior to 2012 are generally not subject to examination by the IRS except for items involving tax attributes that have been carried forward to tax years whose statute of limitations remains open. With few exceptions, the Company is not subject to state or local examinations for years prior to 2009. In the U.K., tax years 2012 and prior are closed to audit due to the expiration of the statute of limitations. The Company is generally not able to reliably estimate the ultimate settlement amounts until the close of the audit. While the Company does not expect material changes, it is possible that the amount of unrecognized benefit with respect to its uncertain tax positions could significantly increase or decrease within the next 12 months related to the Company’s ongoing audits. At this time, the Company is unable to make a reasonable estimate of the range of impact on the balance of uncertain tax positions or the impact on the effective income tax rate related to such positions.
The Company had $0.3 million accrued for interest and penalties relating to uncertain tax positions at December 31, 2016, which is included in income taxes payable. At December 31, 2015 and 2014, the Company had immaterial amounts accrued for interest and penalties relating to uncertain tax positions. The Company recognized immaterial amounts of net interest and penalties relating to uncertain tax positions for the years ended December 31, 2016, 2015, and 2014, respectively.