Income Taxes

6 Months Ended

Jun. 30, 2020

The Company's tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter the Company updates the estimate of the annual effective tax rate, and if our estimated tax rate changes, makes a cumulative adjustment. The Company's quarterly tax provision and quarterly estimate of the annual effective tax rate are subject to significant variation due to several factors, including variability in accurately predicting the 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 our effective tax rate is greater when our 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 2020 and 2019 to income before income taxes for the three months ended June 30, 2020 and 2019 due to the following (in thousands):


	2020						2019
Computed “expected” tax expense	$	44,443	21.0	%	$	54,025	21.0	%
Changes resulting from:
Foreign income tax differential	(4,155)		(2.0)	%	(3,185)		(1.2)	%
Excess tax benefit related to stock-based compensation	(12,720)		(6.0)	%	(8,097)		(3.2)	%
State taxes net of federal benefits	3,902		1.8	%	2,982		1.2	%
Foreign-sourced nontaxable income	13		—	%	145		0.1	%
Foreign withholding	3,515		1.7	%	5,098		1.9	%
GILTI, net of foreign tax credits	2,402		1.1	%	3,284		1.3	%
Change in valuation allowance and remeasurement of related deferred tax asset	—		—	%	(64,880)		(25.2)	%
Change in taxes for federal uncertain tax positions	12,261		5.8	%	155		0.1	%



Other	3,479		1.7	%	6,082		2.3	%
Provision for (benefit from) income taxes	$	53,140	25.1	%	$	(4,391)	(1.7)	%

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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