Income Taxes |
9 Months Ended |
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Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rates for the three months ended September 30, 2016 and 2015 were 35% and 30%, respectively. The effective tax rates for the nine months ended September 30, 2016 and 2015 were 30% and 34%, respectively. The effective tax rate for the nine months ended September 30, 2016 differed from the Federal statutory rate primarily due to Federal and California research and development ("R&D") credits partially offset by state taxes, foreign taxes and non-deductible expenses. The effective tax rate for the three and nine months ended September 30, 2015 differed from the Federal statutory rate primarily due to the California R&D credit partially offset by state taxes, foreign taxes and non-deductible expenses. The increase in effective tax rate for the three months ended September 30, 2016 as compared to the same period in 2015 was due primarily to increased operating results for the three months ended September 30, 2016. The decrease in effective tax rate for the nine months ended September 30, 2016 as compared to the nine months ended September 30, 2015 was primarily attributable to the permanent reinstatement of the Federal R&D credit in the fourth quarter of 2015. Gross unrecognized tax benefits were $16.5 million and $17.1 million as of September 30, 2016 and December 31, 2015, respectively. The gross unrecognized tax benefits, if recognized by the Company, will result in a reduction of approximately $13.7 million to the provision for income taxes thereby favorably impacting the Company’s effective tax rate. As of September 30, 2016, the Company had identified gross unrecognized tax benefits of $16.5 million, of which $1.6 million was classified as “Other non-current liabilities” and $14.9 million as a reduction to deferred tax assets which was classified as "Other non-current assets" in the Consolidated Balance Sheets. The Company includes interest and penalties related to unrecognized tax benefits within the "Provision for income taxes" on the Consolidated Statements of Operations and “Other non-current liabilities” in the Consolidated Balance Sheets. Interest and penalties included in the Company’s “Provision for income taxes” were not material in any of the periods presented. Deferred tax assets include $200.0 million and $180.6 million classified as “Other non-current assets” on the Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015, respectively. In evaluating its ability to realize the net deferred tax assets, the Company considered all available positive and negative evidence, including its past operating results and the forecast of future market growth, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies. As of September 30, 2016 and December 31, 2015, it was considered more likely than not that all deferred tax assets would be realized. Income tax benefits attributable to the exercise of employee stock options are recorded in additional paid-in-capital. These benefits amounted to $12.6 million and $37.7 million, during the three months ended September 30, 2016 and 2015, respectively, and amounted to $37.2 million and $105.6 million, during the nine months ended September 30, 2016 and 2015, respectively. The Company files U.S. Federal, state and foreign tax returns. The Company is currently under examination by the IRS for 2014 and 2015. The 2008 through 2015 state tax returns are subject to examination by state tax authorities. The Company has no significant foreign jurisdiction audits underway, and 2011 through 2015 remain subject to examination by foreign tax authorities. Given the potential outcome of the current examinations as well as the impact of the current examinations on the potential expiration of the statute of limitations, it is reasonably possible that the balance of unrecognized tax benefits could significantly change within the next twelve months. At this time, an estimate of the range of reasonably possible adjustments to the balance of unrecognized tax benefits cannot be made. |