INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of Income Before Income Tax

Income before income taxes for the Company’s U.S. and foreign operations for the years ended December 31, 2016, 2015 and 2014 was as follows:

	2016		2015		2014
	(In thousands)
U.S.	$	52,742	$	42,342	$	23,966
Foreign		220,643		284,859		294,907
	$	273,385	$	327,201	$	318,873

Schedule of Components of Income Tax

Income taxes for the years ended December 31, 2016, 2015 and 2014 consisted of the following:

	2016			2015			2014
	(In thousands)
Current:
Federal	$	65,636		$	14,521		$	8,904
State		3,192			2,639			1,686
City		533			439			281
Foreign		256,117			61,393			65,187
Total current provision		325,478			78,992			76,058
Deferred:
Federal		(150	)		(537	)		(1,328	)
State		(28	)		(99	)		(245	)
City		(5	)		(16	)		(41	)
Foreign		5,480			(3,665	)		(5,311	)
Total deferred expense (benefit)		5,297			(4,317	)		(6,925	)
Total provision for income taxes	$	330,775		$	74,675		$	69,133

Schedule of Components of Net Deferred Tax Assets

The components of net deferred tax assets as of December 31, 2016 and 2015 are as follows:

	2016			2015
	(In thousands)
Deferred tax assets
Carry-forward losses of subsidiaries	$	7		$	53
Minimum alternate tax credit of subsidiaries		35,979			30,752
Property, plant and equipment		198			394
Accrued expenses and allowances		15,055			13,820
Valuation allowance		(9,167	)		(5,454	)
Total deferred tax assets		42,072			39,565
Deferred tax liabilities
Provision for branch tax on dividend equivalent in India		(9,782	)		(1,726	)
Provision for tax on unrealized gains in India		(33	)		(53	)
Others		(258	)
Total deferred tax liabilities		(10,073	)		(1,779	)
Net deferred tax assets	$	31,999		$	37,786

Schedule of Net Deferred Tax Asset Liability Balance Sheet Classification

The balance sheet classification of the net deferred tax asset is summarized as follows:

	2016			2015
	(In thousands)
Deferred tax asset, non-current		42,072			39,565
Deferred tax liabilities, non-current		(10,073	)		(1,779	)
	$	31,999		$	37,786

Differentiation between Effective Tax Rate and Statutory U.S. Income Tax Rate

The following table accounts for the differences between the actual effective tax rate and the statutory U.S. Federal income tax rate of 35% for the years ended December 31, 2016, 2015 and 2014:

	2016			2015			2014
Statutory rate		35.0	%		35.0	%		35.0	%
State taxes, net of federal Benefit		1.0	%		0.6	%		0.2	%
City taxes		0.0	%		0.0	%		0.1	%
Foreign effective tax rates different from U.S. Statutory Rate1		(13.0	%)		(12.6	%)		(14.2	%)
Tax reserves		(1.0	%)		(0.0	%)		(0.1	%)
Prior Year state tax payment		—			(0.4	%)		0.0	%
Valuation Allowance		—			0.2	%		0.7	%
Tax related to repatriation		99.0			—			—
Effective income tax rate		121.0	%		22.8	%		21.7	%

1 The foreign jurisdiction that materially affects the effective income tax rate is India.

Schedule of Unrecognized Tax Benefit Reconciliation

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	(in millions)
	2016			2015
Balance as at January 1	$	50.24		$	40.47
Additions based on tax positions related to the current year		22.48			11.72
Additions based on tax positions for prior years		0.0			0.18
Reductions for tax positions of prior years		(3.08	)		(0.14	)
Foreign currency translation effect		(1.13	)		(1.99	)
Balance as at December 31	$	68.51		$	50.24
Income taxes paid, see below		(41.41	)		(42.18	)
Amounts, net of income taxes paid	$	27.10		$	8.06

Minimum Alternate Tax (MAT)

Expiration Years of Minimum Alternate Tax Credit

The MAT credit as of December 31, 2016 of $30.78 million (net of valuation allowance of $5.19 million) shall be utilized before March 31 of the following financial years and shall expire as follows:

Year of Expiry of MAT Credit
	(In millions)
2017-18	$	0.19
2018-19		0.26
2019-20		0.95
2020-21		1.59
2021-22		0.78
2022-23		5.86
2023-24		6.94
2024-25		7.62
2025-26		9.80
2026-27		1.98
Total	$	35.97
Less: Valuation allowance		(5.19	)
Total (net of valuation allowance)	$	30.78