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Income Taxes
6 Months Ended
Jun. 30, 2015
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
We utilize our estimated annual effective tax rate to determine our provision for income taxes for interim periods. The income tax provision is computed by taking the estimated annual effective tax rate and multiplying it by the year-to-date pre-tax book income.
We recorded income tax expense of $2.2 million and $2.8 million for the three months ended June 30, 2015 and 2014, respectively. Our effective tax rate was 20.7% and 24.7% during the three months ended June 30, 2015 and 2014, respectively. The decrease in our effective tax rate was primarily due to the recording of a $0.5 million tax refund in the current year period relating to tax incentives in China for the years 2012 through 2014.
We recorded income tax expense of $3.4 million and $4.1 million for the six months ended June 30, 2015 and 2014, respectively. Our effective tax rate was 20.2% and 24.5% during the six months ended June 30, 2015 and 2014, respectively. The decrease in our effective tax rate was primarily due to the recording of $0.8 million in tax refunds in the current year period, of which $0.5 million related to tax incentives in China for the years 2012 through 2014 and $0.3 million related to certain deductible research and development expenses incurred in China during 2013.
At June 30, 2015, we had gross unrecognized tax benefits of $3.7 million, including interest and penalties, of which $3.2 million would affect the annual effective tax rate if these tax benefits are realized. Further, we are unaware of any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase within the next twelve months. However, based on federal, state and foreign statute expirations in various jurisdictions, we anticipate a decrease in unrecognized tax benefits of approximately $0.5 million within the next twelve months. We have classified uncertain tax positions as non-current income tax liabilities unless expected to be paid within one year.
We have elected to classify interest and penalties as a component of tax expense. Accrued interest and penalties of $0.2 million and $0.2 million on June 30, 2015 and December 31, 2014, respectively, are included in our unrecognized tax benefits.
We file income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. On June 30, 2015, the open statutes of limitations in our significant tax jurisdictions were as follows: federal 2011 through 2014, state 2010 through 2014, and foreign 2008 through 2014.