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Income Taxes
3 Months Ended
Mar. 31, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
Our effective income tax rate was 32.3% and 35.2% for the three months ended March 31, 2017 and 2016, respectively. The decrease from the first quarter of 2016 is primarily due to excess tax deductions on stock based compensation recognized in 2017, a change in the mix of pretax earnings and a decrease in accruals for uncertain tax positions, partially offset by accruals for distribution taxes on current year earnings in our Chinese subsidiaries that are not considered permanently reinvested.
The total amount of unrecognized tax benefits as of March 31, 2017 was $6.3 million, of which $6.1 million would affect our effective tax rate if recognized. It is reasonably possible that approximately $1.5 million of our unrecognized tax benefits as of March 31, 2017 will reverse within the next twelve months.
We recognize interest and penalties related to unrecognized tax benefits through income tax expense. As of March 31, 2017, we had $0.5 million accrued for the payment of interest.
We are subject to taxation in the U.S. and various state and foreign jurisdictions. With few exceptions, we are no longer subject to examinations by tax authorities for years prior to 2012.
The Company adopted ASU 2016-09 on January 1, 2017. Upon adoption, the Company recognized excess tax benefits of approximately $12.7 million in deferred tax assets that were previously not recognized in a cumulative-effect adjustment to retained earnings. In addition, the new guidance requires that all of the tax effects related to share-based payments at settlement or expiration be recorded through the statement of operations which resulted in $1.1 million of income tax benefits during the quarter. See Note 19 - “Recent Accounting Standards” for further information.