XML 29 R18.htm IDEA: XBRL DOCUMENT v3.5.0.2
Income Taxes
9 Months Ended
Sep. 30, 2016
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
 
Our tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period.  Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.
 
Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, is subject to significant volatility due to several factors, including income and losses from investments for which we have a full valuation allowance, changes in tax laws and relative changes in unrecognized tax benefits.  Additionally, our effective tax rate can be more or less volatile based on the amount of pre-tax income.  For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower.
 
Income tax expense was approximately $75.1 million and $65.8 million for the nine months ended September 30, 2016 and 2015, respectively.  Our estimated effective income tax rate was 34.6% and 43.1% for the nine months ended September 30, 2016 and 2015, respectively.  The variations in our current year effective tax rate from the U.S. federal statutory rate for the nine months ended September 30, 2016 were primarily due to research and experimentation credits, partially offset by various permanent tax differences. The variations in our effective tax rate from the U.S. federal statutory rate for the nine months ended September 30, 2015 were primarily due to the increase in our valuation allowance associated with certain foreign losses and realized and unrealized losses that are capital in nature, partially offset by research and experimentation tax credits.