Entity information:
INCOME TAXES
(Loss) income before income taxes consisted of the following components:
 
Year ended December 31,
 
2017
 
2016
 
2015
 
(in thousands)
Domestic
$
(301,948
)
 
$
(212,095
)
 
$
365,362

Foreign
(11,690
)
 
(21,295
)
 
(23,191
)
(Loss) income before income taxes
$
(313,638
)
 
$
(233,390
)
 
$
342,171


Income tax (benefit) expense consisted of the following components:
 
Year ended December 31,
 
2017
 
2016
 
2015
 
(in thousands)
Current:
 

 
 

 
 

Federal
$
23,965

 
$
67,326

 
$
104,711

State
4,458

 
9,928

 
13,414

Foreign
3,376

 
6,632

 
4,297

Total current income tax expense
31,799

 
83,886

 
122,422

Deferred:
 

 
 

 
 

Federal
(182,217
)
 
(32,397
)
 
3,193

State
(13,773
)
 
(1,110
)
 
(1,412
)
Foreign
(596
)
 
2,481

 
(1,331
)
Total deferred income tax (benefit) expense
(196,586
)
 
(31,026
)
 
450

Total income tax (benefit) expense
$
(164,787
)
 
$
52,860

 
$
122,872


Income tax (benefit) expense reflected in the accompanying Consolidated Statements of Operations varies from the amounts that would have been provided by applying the United States federal statutory income tax rate of 35% to (loss) income before income taxes as shown below:
 
Year ended December 31,
 
2017
 
2016
 
2015
 
(in thousands)
U.S. federal statutory income tax
$
(109,773
)
 
$
(81,686
)
 
$
119,760

Increase (reduction) resulting from:
 
 
 
 
 
State income tax, net of federal tax benefit
(6,678
)
 
6,316

 
11,976

Nondeductible goodwill
6,219

 
132,800

 
—

Brand name impairment
50,957

 
—

 
—

Exchange of convertible senior notes
(9,526
)
 
—

 
—

Other permanent differences
2,513

 
633

 
1,369

International operations, net of foreign tax credits
(1,087
)
 
3,454

 
13,035

Worthless stock tax benefit
—

 
—

 
(11,634
)
Federal tax credits and income deductions
(2,698
)
 
(6,030
)
 
(8,554
)
Tax impact of uncertain tax positions and other
(4,224
)
 
(2,627
)
 
(3,080
)
Impact of 2017 Tax Act
(90,490
)
 
—

 
—

Income tax (benefit) expense
$
(164,787
)
 
$
52,860

 
$
122,872

On December 22, 2017, tax reform legislation known as The Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”) was enacted.  The 2017 Tax Act made significant changes to the Internal Revenue Code, including a reduction in the corporate tax rate from 35% to 21%, which is effective for tax years beginning after December 31, 2017.  The Company has calculated the impact of the 2017 Tax Act as part of the year end income tax provision.  The Company has recorded a non-cash income tax benefit of $90.5 million in 2017, related to the remeasurement of its deferred tax assets and liabilities to reflect the effects of these temporary differences at enacted tax rates expected to be in effect when taxes are actually paid or recovered.
On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Act. The accompanying Consolidated Financial Statements include an immaterial provisional tax impact related to deemed repatriated earnings. The ultimate impact may differ from these provisional amounts, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made and additional regulatory guidance that may be issued. Any subsequent adjustment will be recorded to current tax expense in the quarter of 2018 when the analysis is complete. 
    The adjustment explained above related to the 2017 Tax Act was recorded prior to long-lived asset impairment charges primarily related to the Company's indefinite-lived brand asset explained in Note 5, "Goodwill and Intangible Assets." The reduction to the applicable deferred tax liability associated with the indefinite-lived intangible asset impaired utilized the updated statutory rate associated with the 2017 Tax Act resulting in a reconciling item in the table above, which begins with the 35% statutory rate enacted in the year ended December 31, 2017. In addition, the effective tax rates in 2017 and 2016 were significantly impacted by goodwill impairment charges totaling $24.3 million and $471.1 million, respectively, the majority of which is not deductible for income tax purposes.
Deferred tax assets and liabilities consisted of the following at December 31:
 
2017
 
2016
 
Assets
 
Liabilities
 
Net
 
Assets
 
Liabilities
 
Net
 
(in thousands)
Deferred tax assets (liabilities):
 

 
 

 
 

 
 

 
 

 
 

Operating reserves
$
6,213

 
$
—

 
$
6,213

 
$
9,774

 
$
—

 
$
9,774

Deferred revenue
1,897

 
—

 
1,897

 
4,439

 
—

 
4,439

Prepaid expenses
—

 
(3,873
)
 
(3,873
)
 
—

 
(4,556
)
 
(4,556
)
Intangible assets
—

 
(102,602
)
 
(102,602
)
 
—

 
(300,253
)
 
(300,253
)
Fixed assets
15,420

 
—

 
15,420

 
16,006

 
—

 
16,006

Stock-based compensation
4,586

 
—

 
4,586

 
4,597

 
—

 
4,597

Net operating loss and credit carryforwards
28,244

 
—

 
28,244

 
26,628

 
—

 
26,628

Long-term rent liabilities
6,946

 
—

 
6,946

 
8,604

 
—

 
8,604

Convertible senior notes
—

 
(5,755
)
 
(5,755
)
 
—

 
(12,581
)
 
(12,581
)
Other
4,018

 
—

 
4,018

 
9,541

 
—

 
9,541

Valuation allowance
(17,478
)
 
—

 
(17,478
)
 
(21,324
)
 
—

 
(21,324
)
Total net deferred taxes
$
49,846

 
$
(112,230
)
 
$
(62,384
)
 
$
58,265

 
$
(317,390
)
 
$
(259,125
)

At December 31, 2017 and 2016, the Company had deferred tax assets relating to foreign and state NOLs with lives ranging from 5 to 20 years. As of December 31, 2017 and 2016, a valuation allowance was provided for certain NOLs, as the Company currently believes that these NOLs may not be realizable prior to their expiration. In 2017, the Company reduced its valuation allowance by $3.8 million. During 2016 and 2015, the Company increased its valuation allowance by $4.4 million and $2.3 million, respectively. The valuation allowance was adjusted in 2017 based on a change in circumstances, including anticipated future earnings, which caused a change in judgment about the realizability of certain deferred tax assets related to NOLs.
The Company does not have any material undistributed earnings of international subsidiaries at December 31, 2017 as these subsidiaries are considered to be branches for United States tax purposes, to have incurred cumulative NOLs, or to have only minimal undistributed earnings.
GNC Holdings, Inc. files a consolidated federal tax return and various consolidated and separate tax returns as prescribed by the tax laws of the state, local and international jurisdictions in which it and its subsidiaries operate. The statutes of limitation for the Company’s U.S. federal income tax returns are closed for years through 2013. The Company has various state and local jurisdiction tax years open to possible examination (the earliest open period is generally 2011), and the Company also has certain state and local tax filings currently under audit.
A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding penalties and interest, is as follows:
 
December 31,
 
2017
 
2016
 
2015
 
(in thousands)
Balance of unrecognized tax benefits at beginning of period
$
6,456

 
$
7,282

 
$
11,652

Additions for tax positions taken during current period
748

 
289

 
1,345

Additions for tax positions taken during prior periods
192

 
1,031

 
543

Reductions for tax positions taken during prior periods
(675
)
 
(1,378
)
 
(6,258
)
Settlements
(947
)
 
(768
)
 
—

Balance of unrecognized tax benefits at end of period
$
5,774

 
$
6,456

 
$
7,282


The Company's liability for uncertain tax positions, excluding penalties and interest, decreased by $0.7 million during the current year due in part to the expiration of certain statutes of limitation with respect to the 2013 fiscal year and the payment of settlements to satisfy open audits.
As of December 31, 2017, the Company is not aware of any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months. Accrued interest and penalties were $2.0 million and $1.9 million at December 31, 2017 and 2016, respectively. At December 31, 2017, the amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $7.8 million, including the impact of accrued interest and penalties. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, the Company believes that its unrecognized tax benefits reflect the most likely outcome. The Company adjusts these unrecognized tax benefits, as well as the related interest, in light of changing facts and circumstances. Settlement of any particular position could require the use of cash. Favorable resolution would be recognized as a reduction to the effective income tax rate in the period of resolution.