INCOME TAXES	9 Months Ended
Sep. 30, 2015
INCOME TAXES
INCOME TAXES	NOTE 8: INCOME TAXES We are required to adjust our effective tax rate at each interim period to be consistent with the estimated annual effective tax rate. We are also required to record the tax impact of certain discrete items, unusual or infrequently occurring items including changes in judgment about valuation allowances, and the effects of changes in tax laws or income tax rates, in the interim period in which they occur. In addition, jurisdictions with a projected loss for the year or a cumulative loss for the year-to-date interim period where no tax benefit can be recognized are excluded from the estimated annual effective tax rate. The impact of such an exclusion combined with the tax impact of recording certain discrete items could result in a higher or lower effective tax rate during a particular interim period, based upon the mix of earnings by jurisdiction and timing of actual earnings compared to annual forecast. For the three and nine months ended September 30, 2015, our effective tax rate is not customary and is significantly higher than our statutory income tax rate of approximately 40% in the U.S. and 21% in foreign jurisdictions. Contributing to the non-customary effective tax rates are the recognition of a valuation allowance in the U.S., the mix of pretax income or loss in domestic and foreign jurisdictions and the applicable statutory tax rates in these jurisdictions. Significant judgment is required in determining the timing and amount of valuation allowance to record against our deferred tax assets. Valuation allowances arise due to the uncertainty of realizing deferred tax assets. We assess whether valuation allowances should be established against our deferred tax assets based on the consideration of all positive and negative available evidence, using a “more likely than not” standard. In making such assessments, significant weight is to be given to evidence that can be objectively verified such as historical operating results and current trends. Beginning in the third quarter of 2015, we believe that a valuation allowance is now required due to our historical cumulative loss in the U.S. for the three year period ended September 30, 2015. Moreover, during the three months ended September 30, 2015, we continued to incur U.S. losses that contributed to the cumulative loss position in the U.S. We had positive cumulative earnings in the U.S. for the three year period ended June 30, 2015. The recent continuing U.S. loss is a significant factor in our assessment as it is objectively verifiable, and therefore, is considered significant negative evidence. Other evidence evaluated is our expectation of future taxable income by jurisdiction, which includes forecasted revenue growth and other factors such as strategic initiatives and industry trends. However, three-year historical cumulative losses are one of the most objectively verifiable forms of negative evidence and although estimating future earnings would be positive evidence, such forecasts are not objectively verifiable and are accordingly given less weight when compared to a three-year historical cumulative loss and recent continuing loss. In establishing a full valuation allowance against our U.S. net deferred tax assets during the period, certain deferred tax liabilities related to indefinite lived assets (goodwill) that are not amortized for financial reporting purposes were excluded from measurement. Because the deferred tax liability remains on the balance sheet indefinitely until such asset is impaired or disposed, the liability cannot be scheduled to reverse or considered as a source of income. As a result, these deferred tax liabilities are excluded from the measurement of the net deferred tax asset requiring a valuation allowance. In addition, tax amortization of the underlying assets results in an increase to the related deferred tax liabilities and an increase to tax expense recognized. On the basis of this evaluation, we recorded tax expense of $22.0 million and $21.6 million including the discrete impact of establishing a full valuation allowance against our U.S net deferred tax assets in “Provision for (benefit from) income taxes” in our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2015, respectively. Included in tax expense for the nine months ended September 30, 2015 is approximately $2.5 million relating to our foreign operations and approximately $19.0 million resulting from the establishment of the valuation allowance against our U.S. net deferred tax assets and from the increase in the valuation allowance during the period.

NOTE 8: INCOME TAXES

We are required to adjust our effective tax rate at each interim period to be consistent with the estimated annual effective tax rate. We are also required to record the tax impact of certain discrete items, unusual or infrequently occurring items including changes in judgment about valuation allowances, and the effects of changes in tax laws or income tax rates, in the interim period in which they occur. In addition, jurisdictions with a projected loss for the year or a cumulative loss for the year-to-date interim period where no tax benefit can be recognized are excluded from the estimated annual effective tax rate. The impact of such an exclusion combined with the tax impact of recording certain discrete items could result in a higher or lower effective tax rate during a particular interim period, based upon the mix of earnings by jurisdiction and timing of actual earnings compared to annual forecast.

For the three and nine months ended September 30, 2015, our effective tax rate is not customary and is significantly higher than our statutory income tax rate of approximately 40% in the U.S. and 21% in foreign jurisdictions. Contributing to the non-customary effective tax rates are the recognition of a valuation allowance in the U.S., the mix of pretax income or loss in domestic and foreign jurisdictions and the applicable statutory tax rates in these jurisdictions.

Significant judgment is required in determining the timing and amount of valuation allowance to record against our deferred tax assets. Valuation allowances arise due to the uncertainty of realizing deferred tax assets. We assess whether valuation allowances should be established against our deferred tax assets based on the consideration of all positive and negative available evidence, using a “more likely than not” standard. In making such assessments, significant weight is to be given to evidence that can be objectively verified such as historical operating results and current trends. Beginning in the third quarter of 2015, we believe that a valuation allowance is now required due to our historical cumulative loss in the U.S. for the three year period ended September 30, 2015. Moreover, during the three months ended September 30, 2015, we continued to incur U.S. losses that contributed to the cumulative loss position in the U.S. We had positive cumulative earnings in the U.S. for the three year period ended June 30, 2015. The recent continuing U.S. loss is a significant factor in our assessment as it is objectively verifiable, and therefore, is considered significant negative evidence.

Other evidence evaluated is our expectation of future taxable income by jurisdiction, which includes forecasted revenue growth and other factors such as strategic initiatives and industry trends. However, three-year historical cumulative losses are one of the most objectively verifiable forms of negative evidence and although estimating future earnings would be positive evidence, such forecasts are not objectively verifiable and are accordingly given less weight when compared to a three-year historical cumulative loss and recent continuing loss.

In establishing a full valuation allowance against our U.S. net deferred tax assets during the period, certain deferred tax liabilities related to indefinite lived assets (goodwill) that are not amortized for financial reporting purposes were excluded from measurement. Because the deferred tax liability remains on the balance sheet indefinitely until such asset is impaired or disposed, the liability cannot be scheduled to reverse or considered as a source of income. As a result, these deferred tax liabilities are excluded from the measurement of the net deferred tax asset requiring a valuation allowance. In addition, tax amortization of the underlying assets results in an increase to the related deferred tax liabilities and an increase to tax expense recognized.

On the basis of this evaluation, we recorded tax expense of $22.0 million and $21.6 million including the discrete impact of establishing a full valuation allowance against our U.S net deferred tax assets in “Provision for (benefit from) income taxes” in our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2015, respectively. Included in tax expense for the nine months ended September 30, 2015 is approximately $2.5 million relating to our foreign operations and approximately $19.0 million resulting from the establishment of the valuation allowance against our U.S. net deferred tax assets and from the increase in the valuation allowance during the period.