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Income Taxes
6 Months Ended
Jun. 30, 2016
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The Company is subject to income tax in the United States as well as other tax jurisdictions in which it conducts business. Earnings from activities outside the United States are subject to local country income tax. The Company does not provide for federal income taxes on the undistributed earnings of its foreign subsidiaries because it is the Company’s intent to reinvest earnings indefinitely offshore. The determination of the interim period income tax provision utilizes the effective rate method, which requires the estimation of certain annualized components of the computation of the income tax provision, including the estimate of the annual effective tax rate by legal entity and by jurisdiction. The Company's ability to estimate the geographic mix of earnings is impacted by the relatively high-growth nature of the business, acquisitions, fluctuations of business operations by country, and implementation of tax planning strategies.  
The Company recorded income tax expense of $100.6 million and $67.7 million for the three and six months ended June 30, 2016, respectively, and income tax benefit of $26.0 million and $15.5 million for the three and six months ended June 30, 2015, respectively. The Company recognized a tax expense in the three and six months ended June 30, 2016, which was driven primarily by the recording of a valuation allowance for a significant portion of the Company's tax assets.
The Company regularly assesses the realizability of its deferred tax assets. In performing this assessment, the Company weighs all available positive and negative evidence, including earnings history and results of recent operations, scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies to determine, based on the weight of the available evidence, whether it is more-likely-than-not that some or all of its deferred tax assets will not be realized. As of December 31, 2015 and March 31, 2016, the Company performed this assessment and concluded that sufficient positive evidence, including recent cumulative profits, a reduction in operating expenses, and an expectation of improving operating results, existed as of those dates such that a valuation allowance was not required. Upon completing this assessment at June 30, 2016, the Company concluded that negative evidence outweighed positive evidence due to a cumulative loss over a three-year period ended June 30, 2016. As a result, the Company recognized a non-cash charge of $100.6 million and $66.3 million, respectively, to income taxes in the three and six months ended June 30, 2016, to record a valuation allowance against a significant portion of the Company's tax assets.
Under current tax laws, this valuation allowance will not limit the Company’s ability to utilize US federal and state deferred tax assets provided it can generate sufficient future taxable income in the United States. The Company anticipates it will continue to record a valuation allowance against the losses of certain jurisdictions, primarily federal and state, until such time as they are able to determine it is “more-likely-than-not” the deferred tax asset will be realized. Such position is dependent on whether there will be sufficient future taxable income to realize such deferred tax assets. The Company expects its future tax provisions (benefits), during the time such valuation allowances are recorded, will consist primarily of the tax expense of the non-US jurisdictions that are profitable. If the Company is subsequently able to utilize all or a portion of the deferred tax assets for which a valuation allowance has been established, then these deferred tax assets may be recognized through the reduction of the valuation allowance which could result in a material benefit to the Company’s results of operations in the period in which the benefit is determined.
On December 18, 2015, the President signed into law The Protecting Americans from Tax Hikes Act of 2015 (the "2015 Act"). The 2015 act establishes a permanent research tax credit for qualifying amounts paid or incurred after December 31, 2014. As a result of the enacted permanent credit, the Company recognized a full tax benefit of $20.4 million in the fourth quarter for all qualifying amounts incurred in 2015.
On December 1, 2015, in Altera Corp. v. Commissioner, the US Tax Court formally entered its decision related to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement. At this time, the US Department of the Treasury has not withdrawn the requirement to include stock-based compensation from its regulations. Due to the uncertainty surrounding the status of the current regulations, questions related to the scope of potential benefits, and the risk of the Tax Court’s decision being overturned upon appeal, the Company has not recorded any impact as of June 30, 2016. The Company will continue to monitor ongoing developments and potential impacts to our financial statements.