Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v3.8.0.1
Income Taxes
9 Months Ended
Sep. 30, 2017
Income Tax Disclosure [Abstract]  
Income Taxes

(7)

INCOME TAXES

Income tax expense and the effective tax rate for the three and nine months ended September 30, 2017 and 2016 were as follows (in thousands, except the effective tax rate):

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Income tax expense

 

$

11,030

 

 

$

24,376

 

 

$

42,546

 

 

$

67,144

 

Effective tax rate

 

 

9.4

%

 

 

24.2

%

 

 

12.9

%

 

 

19.9

%

 

The tax provisions for the three and nine months ended September 30, 2017 and 2016 were computed using the estimated effective tax rates applicable to each of the domestic and international taxable jurisdictions for the full year. The Company estimates its effective annual tax rate for 2017 to be approximately 13%, which is subject to management’s quarterly review and revision, as necessary.

The Company’s provision for income tax expense and effective income tax rate are significantly impacted by the mix of the Company’s domestic and foreign earnings (loss) before income taxes. In the foreign jurisdictions in which the Company has operations, the applicable statutory rates range from 0% to 34%, which is generally significantly lower than the U.S. federal and state combined statutory rate of approximately 39%. For the three and nine months ended September 30, 2017 and 2016, the decrease in rate was due to an increase in the amount of projected foreign earnings relative to the projected domestic earnings. In addition, the Company recorded a $0.2 million and $1.1 million excess tax benefit due to implementing ASU 2016-09 during the three and nine months ended September 30, 2017, respectively.

As of September 30, 2017, the Company had approximately $802.9 million in cash and cash equivalents, of which $503.1 million, or 62.7%, was held outside the U.S. Of the $503.1 million held by the Company’s foreign subsidiaries, approximately $54.1 million is available for repatriation to the U.S. without incurring further U.S. income taxes and applicable foreign income and withholding taxes in excess of the amounts accrued in the Company’s condensed consolidated financial statements. Under current applicable tax laws, if the Company chooses to repatriate some or all of the funds designated as indefinitely reinvested outside the U.S., the amount repatriated would be subject to U.S. income taxes and applicable foreign income and withholding taxes. The Company does not expect to repatriate any of the funds presently designated as indefinitely reinvested outside the U.S. As such, the Company did not provide for deferred income taxes on its accumulated undistributed earnings of the Company’s foreign subsidiaries.