XML 33 R17.htm IDEA: XBRL DOCUMENT v3.5.0.2
Income Taxes
6 Months Ended
Jun. 30, 2016
Income Taxes [Abstract]  
Income Taxes

Note 11 — Income Taxes

The provision (benefit) for income taxes primarily relates to taxable income of the Company’s China operations. The benefit for income tax was $0.4 million and $0.5 million for the three-month periods ended June 30, 2016 and 2015, respectively, and related to a reduction in the Company’s liabilities for uncertain tax positions in China due to certain tax years becoming closed to assessment due to the statute of limitations, and a lower tax for the three-month period ended June 30, 2015 related to the restructuring of the Company’s China business. The provision for income tax was $1.6 million and $24,000 for the six month periods ended June 30, 2016 and 2015, respectively. For the six-month period ended June 30, 2016, the Company’s tax provision included $1.3 million of additional tax expense representing the correction of an error related to a previously unrecognized liability for an uncertain tax position in China (refer also to Note 1, “Error Corrections”). In addition, the tax provision for the six-month period ended June 30, 2015 was lower, compared to the six-month period ended June 30, 2016, related to lower tax related to restructuring the Company’s China business. The Company’s statutory tax rate in China was 25% in 2016 and 2015.

While the Company has concluded that its offshore undistributed accumulated earnings as of December 31, 2015 were indefinitely reinvested, and has therefore provided no taxes thereon, the Company concluded that a portion of its earnings expected to be generated by foreign subsidiaries in 2016 will be repatriated to the parent company in order to address the parent company’s liquidity needs. This anticipated repatriation, however, is not expected to result in any additional US federal or state tax liability for 2016 as ongoing tax-deductible corporate expenses expected to be incurred by the parent company more than offset the amount of the expected dividend distribution for the repatriation of a portion of projected earnings for the year. These expectations and related amounts have been reflected in the Company’s estimated annual effective tax rate for 2016.