Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2017 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The income tax provision for interim periods is computed using an estimate of our annual effective tax rate applied to income (loss) before taxes and adjusted for discrete items, if any, in the relevant period. During the prior year interim periods, we calculated the income tax provision using the actual year to date effective tax rate due to difficulty in estimating a reliable annual effective tax rate. 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. Income tax expense was $1.7 million and $1.7 million for the three months ended June 30, 2017 and 2016, respectively, and $4.0 million and $2.5 million for the six months ended June 30, 2017 and 2016, respectively. Income tax expense during these periods was primarily attributable to taxes in foreign jurisdictions. There was no domestic income tax benefit recorded during these periods due to our U.S. federal and state deferred tax asset valuation allowance. Our effective tax rate was (4.1)% and (3.6)% for the three months ended June 30, 2017 and 2016, respectively, and (4.3)% and (2.8)% for the six months ended June 30, 2017 and 2016, respectively. The year-over-year change in the effective tax rates for the three and six month periods is primarily attributable to an increase in taxes in foreign jurisdictions. As a result of adopting ASU 2016-09 in the first quarter of 2017, we recognized previously unrecognized excess tax benefits related to stock awards as a deferred tax asset, which was fully offset by our U.S. federal and state deferred tax asset valuation allowance. Immediately prior to adoption, we had no unrecognized excess tax benefits related to stock awards in jurisdictions outside the United States. We periodically evaluate the realizability of our net deferred tax assets based on all available evidence, both positive and negative such as historic results, future reversals of existing deferred tax liabilities, projected future taxable income, as well as prudent and feasible tax-planning strategies. Generally, more weight is given to objectively verifiable evidence, such as the cumulative loss in recent years. As of June 30, 2017, we maintain a full valuation allowance on our U.S. federal and state deferred tax assets. 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. |