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Income Taxes
9 Months Ended
Sep. 30, 2016
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
We file federal and state income tax returns in the U.S. and income tax returns in foreign jurisdictions. With a few exceptions, we are no longer subject to income tax examinations by any of the taxing jurisdictions for years before 2012. We currently have two foreign income tax examinations in process.
As of September 30, 2016, we had $0.7 million of unrecognized tax benefits related to federal, state and foreign jurisdictions, all of which impact our effective tax rate, if accrued. The unrecognized tax benefits are netted against their related noncurrent deferred tax assets that are carried forward as net operating losses and tax credits. When appropriate, we accrue penalties and interest related to unrecognized tax benefits through income tax expense. Included in the unrecognized tax benefits is $0.2 million interest and penalties as of September 30, 2016.
During the nine months ended September 30, 2016, we recognized $0.2 million of tax reserves related to international audits and released less than $0.1 million of tax reserves associated with items falling outside the statute of limitations and the closure of certain tax years for examination purposes. Events could occur within the next twelve months that would have an impact on the amount of unrecognized tax benefits that would require a reserve.
At September 30, 2016, due to cumulative losses and other factors, we continued to carry valuation allowances against the deferred assets primarily in the following foreign jurisdictions: United Kingdom, China, India and Luxembourg. Additionally, we continue to carry valuation allowances related to certain state deferred assets that we believe to be more likely than not to expire before they can be utilized. We evaluate the need for valuation allowances in each of our jurisdictions on a quarterly basis.

During the nine months ended September 30, 2016, the Company adopted ASU 2016-09 (see Footnote 2 - Recently Issued Accounting Pronouncements). The amended accounting guidance requires all excess tax benefits and tax deficiencies related to share-based compensation to be recognized as an income tax benefit or expense. The recognition of excess tax benefits or tax deficiencies in the Statement of Income will be applied prospectively. As shares vest in the fourth quarter, the Company will recognize the net excess tax benefit and tax deficiency in the tax provision of the Statement of Income. Also related to adoption of this accounting guidance, the Company recognized $2.3 million of deferred assets related to prior year excess tax benefits not previously recognized under previous accounting guidance. The standard requires a modified retrospective transition by means of a cumulative effect adjustment to beginning retained earnings. Therefore, $2.3 million credit adjustment was recorded to beginning retained earnings. Accordingly, there is zero current period tax provision impact from this early adoption.