INCOME TAXES

The following table sets forth information about the Company’s income tax provision for the periods indicated (dollar amounts in thousands):



	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
Income before income taxes	$	80,275		$	50,358		$	146,847		$	108,686
Income tax provision	18,282			17,850			42,968			38,640
Net income	$	61,993		$	32,508		$	103,879		$	70,046

Income tax provision as a percentage of income before income taxes	22.8		%	35.4		%	29.3		%	35.6		%

During the three month periods ended June 30, 2016 and 2015, the Company recorded an income tax provision of $18.3 million and $17.9 million, or 22.8% and 35.4% of income before income tax, respectively, while during the six month periods ended June 30, 2016 and 2015, the Company recorded an income tax provision of $43.0 million and $38.6 million, or 29.3% and 35.6% of income before income tax in the applicable periods, respectively. The decline in the income tax provision rate as a percentage of income before income tax in the quarter and year to date period ended June 30, 2016 was principally the result of the adoption of ASU 2016-09 - Compensation - Stock Compensation in the year to date period, which resulted in the recognition of reduced income tax expense resulting from the stock option exercises in the period.

As of June 30, 2016, the Company could not conclude that it was more likely than not that tax benefits from certain foreign net operating losses would be realized. Accordingly, as of the six months ended June 30, 2016, the Company increased its valuation allowance to $10.4 million for certain of the losses at its Indian subsidiary and the entire amount of the loss at its Swiss subsidiary, compared to a valuation allowance of $8.8 million as of December 31, 2015.

In accordance with ASC 740-10-25, Income Taxes - Recognition, the Company reviews its tax positions to determine whether it is “more likely than not” that its tax positions will be sustained upon examination, and if any tax positions are deemed to fall short of that standard, the Company establishes reserves based on the financial exposure and the likelihood that its tax positions would not be sustained. Based on its evaluations, the Company determined that it would not recognize tax benefits on $2.4 million and $2.3 million related to uncertain tax positions as of June 30, 2016 and December 31, 2015, respectively. If recognized, $1.6 million of these tax positions will impact the Company’s effective rate with the remaining $0.8 million affecting goodwill.