Income Taxes |
9 Months Ended |
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Sep. 30, 2016 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes |
Income Taxes
The Company recorded an income tax benefit of $50.1 million for the three months ended September 30, 2016 and an income tax provision of $0.2 million for the three months ended September 30, 2015, respectively, and an income tax benefit of $46.2 million for the nine months ended September 30, 2016 and an income tax provision of $0.9 million for the nine months ended September 30, 2015, respectively. The income tax benefit for the nine months ended September 30, 2016 is primarily attributable to the release of valuation allowance due to deferred tax liabilities created in the EMC acquisition of $53.9 million, offset by foreign income taxes of $4.8 million resulting from the foreign subsidiaries’ contribution to pretax income, withholding taxes of $2.7 million and effects of permanent differences. The income tax provision for the nine months ended September 30, 2015 was attributable to foreign income and withholding taxes, reduced by benefits realized from internal restructuring during the period.
As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. The Company recorded significant deferred tax liability resulting from the acquisition of EMC and management determined that there is now sufficient positive evidence to conclude that it is more likely than not that a portion of deferred taxes are realizable and therefore reduced the valuation allowance accordingly.
As of September 30, 2016 and December 31, 2015, the liability for income taxes associated with uncertain tax positions was $10.2 million and $4.6 million (excluding interest and penalties), respectively. The net increase in the liability during 2016 was primarily attributable to reserves for tax positions taken by one of the Company’s Canadian subsidiaries as well as pre-acquisition tax positions taken by EMC. As of September 30, 2016 and December 31, 2015, the Company had accrued $2.6 million and $1.4 million, respectively, of interest and penalties related to uncertain tax positions. It is reasonably possible that the amount of the unrecognized benefit with respect to certain of the Company’s unrecognized tax positions may significantly decrease within the next 12 months. This change may be the result of ongoing audits or the expiration of statutes of limitations for the assessment of taxes.
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