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Income Taxes
9 Months Ended
Sep. 30, 2015
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
We utilize our estimated annual effective tax rate to determine our provision for income taxes for interim periods. The income tax provision is computed by taking the estimated annual effective tax rate and multiplying it by the year-to-date pre-tax book income.
We recorded income tax expense of $2.2 million and $2.3 million for the three months ended September 30, 2015 and 2014, respectively. Our effective tax rate was 25.8% and 17.6% during the three months ended September 30, 2015 and 2014, respectively. Our effective tax rate for the three months ended September 30, 2014 was lower than normal as a result of tax refunds received in China relating to certain tax incentive programs.
We recorded income tax expense of $5.6 million and $6.5 million for the nine months ended September 30, 2015 and 2014, respectively. Our effective tax rate was 22.1% and 21.5% during the nine months ended September 30, 2015 and 2014, respectively. The increase in our effective tax rate was due primarily to a higher percentage of income being earned in higher tax rate jurisdictions.
At September 30, 2015, we had gross unrecognized tax benefits of $3.5 million, including interest and penalties, of which $3.1 million would affect the annual effective tax rate if these tax benefits are realized. Further, we are unaware of any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase within the next twelve months. However, based on federal, state and foreign statute expirations in various jurisdictions, we anticipate a decrease in unrecognized tax benefits of approximately $0.3 million within the next twelve months. We have classified uncertain tax positions as non-current income tax liabilities unless expected to be paid within one year.
We have elected to classify interest and penalties as a component of tax expense. Accrued interest and penalties of $0.1 million and $0.2 million at September 30, 2015 and December 31, 2014, respectively, are included in our unrecognized tax benefits.
We file income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. On September 30, 2015, the open statutes of limitations in our significant tax jurisdictions were as follows: federal 2011 through 2014, state 2010 through 2014, and foreign 2008 through 2014.