XML 76 R23.htm IDEA: XBRL DOCUMENT v3.3.0.814
Income Taxes
9 Months Ended
Sep. 30, 2015
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The Company has determined its interim tax provision projecting an estimated annual effective tax rate. For the three- and nine-months ended September 30, 2015, the Company recorded an income tax expense of $1.9 million and an income tax benefit of $21.3 million, respectively, yielding an effective tax rate of (5.7)% and 14.2%, respectively. The effective tax rate differs from the U.S. statutory rate of 35% in the three-month period ended September 30, 2015 primarily due to the adjustment of valuation allowances on the Company's net federal, state and foreign deferred tax assets, the non-taxable nature of certain foreign currency transactions, the current U.S. taxation of earnings of its non-U.S. subsidiaries and the mix of income among the jurisdictions in which the Company does business with statutory tax rates that differ from the U.S. rate. The effective tax rate differs from the U.S. statutory rate of 35% in the nine-month period ended September 30, 2015 primarily due to the establishment of valuation allowances on the Company's net federal, state and foreign deferred tax assets, the non-taxable nature of certain foreign currency transactions and last mile holdback liability release, the current U.S. taxation of earnings of its non-U.S. subsidiaries and the mix of income among the jurisdictions in which the Company does business with statutory tax rates that differ from the U.S. rate.
For the three- and nine-months ended September 30, 2014, the Company recorded an income tax benefit of $20.1 million and $25.2 million, respectively, yielding an effective tax rate of 63.4% and 31.9%, respectively. The effective tax rate differs from the U.S. statutory rate of 35% in the three-month period ended September 30, 2014 primarily due to the impact of the release of the previously recorded valuation allowance during the period due to the acquired deferred tax liabilities resulting from the New Breed acquisition, the non-deductible nature of certain expenses and the mix of income among the jurisdictions in which the Company does business with statutory tax rates that differ from the U.S. rate. The effective tax rate differs from the U.S. statutory rate of 35% in the nine-month period ended September 30, 2014 primarily due to the non-deductible nature of certain expenses and the mix of income among the jurisdictions in which the Company does business with statutory tax rates that differ from the U.S. rate.
The Company had valuation allowances of approximately $58.7 million and $7.1 million as of September 30, 2015 and December 31, 2014, respectively, on the deferred tax assets generated for federal, state and foreign net operating losses where it is more likely than not that the deferred tax assets will not be utilized. The portion of these valuation allowances representing activity reported in other comprehensive income is $8.1 million as of September 30, 2015, with no amount represented at December 31, 2014. In evaluating the Company’s ability to realize its deferred income tax assets, the Company considers all available positive and negative evidence, including operating results, ongoing tax planning, and the reversal of deferred tax liabilities on a jurisdiction by jurisdiction basis.
In general, it is the practice and intention of the Company to reinvest the earnings of its non-U.S. subsidiaries in those operations. As of September 30, 2015, the Company has not made a provision for U.S. or additional foreign withholding taxes for financial reporting over the tax basis of investments in foreign subsidiaries that the Company considers to be indefinitely reinvested, if any exists, except on those earnings that are subject to U.S. tax without regard to whether those earnings are actually distributed. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of unrecorded deferred tax liability related to investments in these foreign subsidiaries.