Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2017 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes |
Income Taxes
For the three months ended September 30, 2017 and 2016, the Company’s provision for income taxes, as a percentage of income before income taxes was 0.0 percent and 22.4 percent, respectively, compared with a U.S. federal statutory rate of 35.0 percent. For the nine months ended September 30, 2017 and 2016, the Company’s provision for income taxes, as a percentage of income before income taxes was 38.2 percent and 34.6 percent, respectively, compared with a U.S. federal statutory rate of 35.0 percent.
The difference between the effective tax rate and the U.S. federal statutory tax rate for the three months ended September 30, 2017, was primarily attributed to decrease in the tax liability associated with uncertain tax positions, partially offset by current year losses, primarily related to China, that presently do not provide future tax benefit.
The difference between the effective tax rate and the U.S. federal statutory tax rate for the nine months ended September 30, 2017, was primarily attributed to current year foreign losses, primarily related to China, that presently do not provide a future tax benefit, partially offset by foreign tax credit benefits as well as a decrease in tax liabilities associated with uncertain tax positions.
The difference between the effective tax rate and the U.S. federal statutory tax rate for the three and nine months ended September 30, 2016, was attributed to foreign tax credit benefits and a decrease in tax liabilities associated with uncertain tax positions, partially offset by the impact of losses during the period that will not provide a tax benefit.
Changes to the effective rate due to dividends received from foreign subsidiaries and the impact of foreign tax credits are expected to be recurring. Depending on various factors, changes from the foregoing items may be favorable or unfavorable in a particular period.
The Company’s U.S. federal income tax returns for 2014 through 2016 are open to examination for federal tax purposes. The Company has several foreign tax jurisdictions that have open tax years from 2010 through 2016.
As of September 30, 2017, the Company had accrued $4.9 million related to unrecognized tax positions, compared with $6.8 million as of December 31, 2016. This net decrease was primarily attributed to changes in contingencies related to international tax.
Interim income taxes are based on an estimated annualized effective tax rate applied to the respective quarterly periods, adjusted for discrete tax items in the period in which they occur. Although the Company believes its tax estimates are reasonable, the Company can make no assurance that the final tax outcome of these matters will not be different from that which it has reflected in its historical income tax provisions and accruals. Such differences could have a material impact on the Company’s income tax provision and operating results in the period in which the Company makes such determination.
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