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Taxes on Income
9 Months Ended
Sep. 30, 2017
Income Tax Disclosure [Abstract]  
Taxes on Income
TAXES ON INCOME
The Company’s effective tax rate in the quarter and nine-month period ended September 30, 2017 was a benefit of 7.5% on a pre-tax loss and an expense of 2.2% on a pre-tax loss, respectively. The low effective tax rates, as compared to the U.S. federal statutory income tax rate of 35%, were unfavorably impacted by: (i) significant pre-tax charges related to goodwill and definite-lived intangible asset impairments, certain of which are not deductible for tax purposes; and (ii) the impact of establishing a $14.9 million valuation allowance on net operating losses and other deferred tax assets in jurisdictions, primarily in the United States, where the Company is unlikely to recognize these benefits. The effective tax rate for the first nine months of 2017 was also unfavorably impacted by a higher mix of earnings in the United States, primarily from income generated on a large deepwater project in the Company’s pipe coating and insulation operation.
For the quarter and nine-month period ended September 30, 2016, the Company’s effective tax rate was 30.7% and 11.4%, respectively. These effective rates were favorably impacted by a higher mix of earnings towards foreign jurisdictions, which generally have lower statutory tax rates, and the impact of certain discrete tax items relating to the 2016 Restructuring. The effective tax rate for the first nine months of 2016 was also favorably impacted by a $1.9 million benefit, or 15.3% benefit to the effective tax rate, related to the reversal of a previously recorded valuation allowance due to changes in the realization of future tax benefits.