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Income Taxes
 9 Months Ended
Sep. 30, 2019
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company's tax provision or benefit from income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter the Company updates its estimate of the annual effective tax rate, and if its estimated tax rate changes, the Company makes a cumulative adjustment. The Company's quarterly tax provision and quarterly estimate of its annual effective tax rate, are subject to variation due to several factors, including variability in accurately predicting the Company's pre-tax and taxable income and loss and the mix of jurisdictions to which they relate. Additionally, the Company's effective tax rate can be more or less volatile based on the amount of pre-tax income or loss. For example, the impact of discrete items and non-deductible expenses on the Company's effective tax rate is greater when its pre-tax income is lower.
The provision for income taxes differs from amounts computed by applying the U.S. federal tax rate of 21% for 2019 and 2018 to income before income taxes for the three months ended September 30, 2019 and 2018 due to the following (in thousands):
 
 
2019
 
2018
Computed “expected” tax expense
 
$
61,479

 
21.0
 %
 
$
49,889

 
21.0
 %
Changes resulting from:
 
 
 
 
 
 
 
 
Foreign income tax differential
 
(2,904
)
 
(1.0
)%
 
2,359

 
1.0
 %
Excess tax benefit related to stock-based compensation
 
(10,059
)
 
(3.4
)%
 
(7,562
)
 
(3.2
)%
State taxes net of federal benefits
 
3,324

 
1.1
 %
 
3,119

 
1.3
 %
Foreign-sourced nontaxable income
 
(1
)
 
—
 %
 
(5,620
)
 
(2.4
)%
Foreign withholding
 
5,150

 
1.8
 %
 
4,578

 
1.9
 %
GILTI, net of foreign tax credits
 
2,486

 
0.9
 %
 
5,576

 
2.4
 %
Tax reform - federal rate reduction
 
—

 


 
22,731

 
9.6
 %
Other
 
7,477

 
2.6
 %
 
4,804

 
2.0
 %
Provision for income taxes
 
$
66,952

 
22.9
 %
 
$
79,874

 
33.6
 %


Provision for income taxes
The Company provides for income taxes during interim periods based on an estimate of our effective tax rate for the year. Discrete items and changes in the estimate of the annual tax rate are recorded in the period they occur. The decrease in the provision for taxes for the three month period ending September 30, 2019 as compared to the three months ending September 30, 2018 was primarily due to a $22.7 million true-up in the third quarter of 2018 for our provisional transition tax liability originally recorded at the end of 2017 in connection the Tax Cuts and Jobs Act of 2017. The provision for taxes was further reduced due to higher excess tax benefits on share based compensation in the three months ended September 30, 2019 as compared to the three months ended September 30, 2018.
The Company pays taxes in different taxing jurisdictions, including the U.S., most U.S. states and many non-U.S. jurisdictions. The tax rates in certain non-U.S. taxing jurisdictions are different than the U.S. tax rate. Consequently, as the Company's earnings fluctuate between taxing jurisdictions, our effective tax rate fluctuates.