Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2016 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The income tax provision for interim periods is generally determined using an estimate of our annual effective tax rate, excluding jurisdictions for which no benefit can be recognized due to valuation allowance, and adjusted for discrete items, if any, in the relevant period. However, given current and expected operating activities during the year, estimating a reliable annual effective tax rate has become increasingly difficult. Even small changes in forecasted results can produce significant changes to our annual effective tax rate. Therefore, we have determined that the actual year to date effective tax rate is the best estimate for the reporting period ended September 30, 2016. We will continue to utilize this methodology until reliable estimates of the annual effective tax rate can be made. Our effective tax rate is impacted by and differs from the federal statutory rate primarily due to non-deductible stock-based compensation and the adverse effect of losses incurred in certain jurisdictions for which we do not realize a tax benefit. Our effective tax rate may also be adversely impacted by the amount of our income (loss) before income tax expense (benefit) relative to our income tax expense, non-deductible expenses and changes in tax law. Our effective tax rate was (6.0)% and (3.2)% for the three months ended September 30, 2016 and 2015, respectively, and (3.6)% and 2.7% for the nine months ended September 30, 2016 and 2015, respectively. The difference in the effective tax rates is attributable to the U.S. federal and state deferred tax asset valuation allowance that was established in the fourth quarter of 2015 and period specific items that impacted the September 30, 2015 effective tax rate, related primarily to disqualifying dispositions on incentive stock options. During the nine months ended September 30, 2016, we recognized income tax expense of $4.2 million primarily attributable to taxes in foreign jurisdictions. There was no domestic income tax benefit recorded in the current period due to our U.S. federal and state deferred tax asset valuation allowance. During the nine months ended September 30, 2015, we recognized an income tax benefit of $1.2 million, which included $1.7 million of discrete tax benefits relating to disqualifying dispositions of incentive stock options. On July 27, 2015, the U.S. Tax Court issued an opinion related to litigation in Altera Corp v. Commissioner. This litigation relates to the treatment of stock-based compensation expense in an intercompany cost sharing arrangement with one of Altera's foreign subsidiaries. In its opinion, the U.S. Tax Court invalidated the portion of the Treasury regulations requiring the inclusion of stock-based compensation expense in such intercompany cost-sharing arrangements. On February 19, 2016, the IRS appealed the U.S. Tax Court's decision. As the final resolution of this litigation remains uncertain we have not recorded potentially favorable benefits related to the current or prior periods. We will continue to monitor developments related to this case and the potential impact of those developments on our current and future financial statements. |