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 September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Income (loss) before income taxes	$	(1,937	)	$	75,214		$	70,139		$	222,061
Income tax provision	960			27,305			29,472			70,273
Net income (loss)	$	(2,897	)	$	47,909		$	40,667		$	151,788

Income tax provision as a percentage of income (loss) before income taxes	(49.6		)%	36.3		%	42.0		%	31.6		%

During the three month periods ended September 30, 2017 and 2016, the Company recorded an income tax provision of $1.0 million and $27.3 million, or (49.6)% and 36.3% of income (loss) before income taxes, respectively, while during the nine month periods ended September 30, 2017 and 2016, the Company recorded an income tax provision of $29.5 million and $70.3 million, or 42.0% and 31.6% of income before income tax in the applicable periods, respectively. The increase in the income tax provision rate as a percentage of income before income tax in the quarter and year to date period ended September 30, 2017 was principally the result of a decrease in the amount of tax deductible stock options exercised in the second quarter of 2017 from the same period in 2016 and an increase in the valuation allowance on tax benefits from losses at the Company’s Indian subsidiary in the three month period ended September 30, 2017. The Company anticipates that its effective tax rate will be 41.7% for the year 2017.

As of September 30, 2017, 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 nine months ended of September 30, 2017, the Company increased its valuation allowance to $14.2 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 $9.9 million as of December 31, 2016.

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 $1.5 million and $1.3 million related to uncertain tax positions as of September 30, 2017 and December 31, 2016, respectively. If recognized, $1.3 million of these tax positions as of September 30, 2017 will impact the Company’s effective rate with the remaining $0.2 million affecting goodwill.