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Income Taxes
3 Months Ended
Mar. 31, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
INCOME TAXES

For the three months ended March 31, 2017, the Company recorded an income tax benefit of $35.3 million on a pre-tax loss of $46.3 million which resulted in an effective tax rate of 76.2%. The effective tax rate was primarily related to losses in foreign operations, as the Company’s tax rates on those operations are generally lower than the U.S. statutory rate. For the three months ended March 31, 2016, the Company recorded an income tax provision of $8.9 million on pre-tax income of $27.0 million which resulted in an effective tax rate of 32.9 %. This rate was primarily related to foreign withholding taxes and tax liability generated from U.S. and foreign operations. The Company's provision for income taxes is based on its worldwide estimated annualized effective tax rate, except for jurisdictions for which a loss is expected for the year and no benefit can be realized for those losses, and the tax effect of discrete items occurring during the period. The tax for jurisdictions for which a loss is expected and no benefit can be realized for the year is based on actual taxes and tax reserves for the quarter. The income tax benefit for the three months ended March 31, 2017 as compared to the income tax provision during the same period in the prior year is largely attributable to the quarterly loss generated from U.S. and foreign operations.

As of March 31, 2017, unrecognized tax benefits were $30.1 million (which is included in long-term deferred tax and other long-term liabilities on the Condensed Consolidated Balance Sheet), of which $23.8 million would affect the effective tax rate if recognized. As of March 31, 2016, unrecognized tax benefits were $3.2 million (which is included in long-term deferred tax and other long-term liabilities on the Condensed Consolidated Balance Sheet), of which $2.4 million would affect the effective tax rate if recognized. At this time, the Company is unable to reasonably estimate the timing of the long-term payments or the amount by which the liability will increase or decrease over time. The increase in unrecognized tax benefits as compared to the same period in the prior year is largely due to the acquisition of DTS in 2016.

It is the Company's policy to classify accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. For the three months ended March 31, 2017 and March 31, 2016, the Company recognized an insignificant amount of interest and penalties related to unrecognized tax benefits. As of March 31, 2017 and December 31, 2016, the Company had accrued $0.5 million and $0.5 million, respectively, of interest and penalties related to unrecognized tax benefits.
At March 31, 2017, the Company's 2011 through 2016 tax years were open and subject to potential examination in one or more jurisdictions. In addition, in the U.S., any net operating losses or credits that were generated in prior years but not yet fully utilized in a year that is closed under the statute of limitations may also be subject to examination. The Company is currently under examination by the Internal Revenue Service for tax year 2014. The Company is currently under examination in California for the 2011 and 2012 tax years. We cannot estimate the financial outcome of both examinations. The Company is not currently under any foreign income tax examination.