NOTE 3:

INCOME TAXES

For the three months ended March 31, 2016 and 2015, the Company’s effective tax rate was 31.0% and 31.7%, respectively, and was determined based on the estimated annual effective income tax rate.

The effective tax rates for the three months ended March 31, 2016 was lower than what would have been expected if the U.S. federal statutory rate were applied to income before taxes. Items decreasing the effective income tax rates are primarily favorable rate differences in foreign jurisdictions, valuation allowance and foreign income tax credit attributable to profit positions in certain foreign jurisdictions. The effective tax rates for the three months ended March 31, 2015 was slightly lower than what would have been expected if the U.S. federal statutory rate were applied to income before taxes. The decrease in the effective income tax rates was primarily due to favorable rate differences in foreign jurisdictions and release of valuation allowance due to profit in certain foreign jurisdictions, partially offset by permanent differences between the tax code and U.S. GAAP.