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Income Taxes
9 Months Ended
Sep. 30, 2017
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 non-U.S. activities are subject to local country income tax.

For the three and nine months ended September 30, 2017, the Company recorded an expense for income taxes of $86.2 million and $51.9 million, respectively, for an effective tax rate of (317.3)% and (28.8)%, respectively. The effective tax rate for the nine months ended September 30, 2017 was different than the statutory federal tax rate primarily due to the impact of a valuation allowance recorded against U.S. deferred tax assets, and the mix of income between United States and foreign jurisdictions.

The Company regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, the Company considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. The realization of deferred tax assets is primarily dependent on us generating sufficient U.S. and foreign taxable income in future fiscal years. In addition to considering forecasts of future taxable income, the Company is also required to evaluate and quantify other possible sources of taxable income in order to assess the realization of its deferred tax assets, namely the reversal of existing deferred tax liabilities, the carry back of losses and credits as allowed under current tax law, and the implementation of tax planning strategies.

In evaluating the need for a valuation allowance, and determining that a valuation allowance was appropriate in the period, the Company considered its recent trend of losses and the fact that it has had four consecutive quarters of losses. In addition, the Company took into account in the period the fact that there was greater clarity following another quarter of results than was available in earlier periods. During the nine month period ended September 30, 2017, the Company recorded a $111.4 million valuation allowance against a portion of its U.S. deferred tax assets as it determined, within the period, it would not meet the more likely than not threshold.  The Company believes that a portion of its deferred tax assets will be realized through the carryback of losses and credits. Accordingly, a valuation allowance is only recorded against the excess deferred tax assets that will not be realized. As of September 30, 2017, the Company has recognized a tax receivable of approximately $75.0 million related to the anticipated carryback of losses incurred in the current year to prior taxable periods. The Company has also recognized U.S. net deferred tax assets, after the valuation allowance, of $41.9 million as of September 30, 2017 related to future deductions that will again result in additional loss carrybacks and corresponding refunds of prior taxes paid. The Company will continue to assess the realizability of the deferred tax assets in each of the applicable jurisdictions going forward and adjust the valuation allowance accordingly.

For the three and nine months ended October 1, 2016, the Company recorded an expense for income taxes of $18.3 million and $31.9 million, respectively, for an effective tax rate of 41.2% and 42.3%, respectively. The effective tax rate for the nine months ended October 1, 2016 was higher than the statutory federal tax rate primarily due to the effect of an out-of-period adjustment recorded in the three months ended April 2, 2016, the mix of income between the United States and foreign jurisdictions, unrecognized tax benefits, and a permanent domestic production activities deduction.

As of September 30, 2017, the total amount of gross unrecognized tax benefits on our condensed consolidated balance sheet was $37.0 million, of which $28.5 million would affect the effective tax rate if recognized. The timing of the resolution of income tax examinations is highly uncertain as are the amounts and timing of tax payments that are part of any audit settlement process. These events could cause large fluctuations in the balance sheet classification of non-current assets and liabilities. The Company believes that within the next 12 months, it is reasonably possible that either certain audits will conclude or statutes of limitations on certain income tax examination periods will expire, or both. Given the uncertainties described above, the Company can only determine a range of estimated potential decreases in underlying unrecognized tax benefits ranging from $0 to approximately $5.5 million.