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Income Taxes
3 Months Ended
Mar. 31, 2018
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

The Company’s tax provision for interim periods is determined using an estimate of its annual effective income tax rate, adjusted for discrete items, if any, in each period. Each quarter, the Company updates its estimated annual effective income tax rate, and if the estimated income tax rate changes, a cumulative adjustment is made. The effective income tax rates for the first three months of 2018 and 2017 were 36.3% and 31.8%, respectively. The effective rate in the first quarter 2018 includes $1.2 million of expense to adjust amounts recorded in 2017 related to the U.S. Tax Cuts and Jobs Act (the “Tax Act”). This adjustment negatively impacted the first quarter 2018 tax rate by 760 basis points. Excluding this $1.2 million adjustment, the 2018 rate is lower than the rate in the first quarter 2017 due primarily to the favorable impact of the Tax Act, which lowered the corporate tax rate in the U.S. from 35% to 21%.

As a result of the application of Staff Accounting Bulletin 118, the Company recorded provisional amounts related to the reduction of its deferred tax assets and liabilities resulting from the tax rate reduction from 35% to 21% and for the Transition Tax at December 31, 2017.  The Company is continuing to gather additional information to more precisely compute the impact of these law changes during 2018.

For 2018, the Company is subject to several provisions of the Tax Act including Global Intangible Low Tax Income (“GILTI”), Foreign-Derived Intangible Income (“FDII”), Base Erosion and Anti-Abuse Tax (“BEAT”), and the Interest Limitation rules.  Due to the complexity of the GILTI tax rules, the Company is continuing to evaluate this provision and the application of the ASU 740, Income Taxes.  U.S. GAAP permits the Company to make an accounting policy choice of either recognizing deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period expense.  Given the complexity of the GILTI provisions, the Company has not made a policy decision regarding whether to record deferred taxes on GILTI or to treat the tax expense as a period expense.  However, the Company has included an estimate of the 2018 current GILTI impact in the annual effective tax rate for the three months ended March 31, 2018.  For the FDII and Interest Limitation provisions, the Company has also included an estimate of these provisions in the annual effective tax rate for the three months ended March 31, 2018.  For the BEAT provision, the Company has not included an estimate of this provision in the annual effective tax rate for the three months ended March 31, 2018 because the Company currently estimates that this provision will not apply in 2018.