Note 6 - Income Taxes

3 Months Ended

Mar. 31, 2018

(6)	Income Taxes

Income tax expense from continuing operations for the three months ended March 31, 2018 and 2017 was $5,786 and $5,812, respectively. The effective tax rate for the three months ended March 31, 2018 and 2017 was 19.3% and 21.6%, respectively. Excluding the favorable effects of TCJA, the effective tax rate would have been approximately 30.3% for the three months ended March 31, 2018. Excluding the favorable impact of immediately recognizing certain effects of share-based compensation, the effective tax rate would have been 31.4% for the three months ended March 31, 2017.

Under SAB No. 118, the Company’s evaluation of the TCJA toll charge on accumulated foreign earnings is not complete and the taxes payable of $2,105 recorded at December 31, 2017 is provisional. The Company has not obtained, prepared and analyzed the information necessary to finalize its computations and accounting for the toll charge. In future periods within the one year measurement period, the Company will disclose when the accounting for the income tax effects of TCJA has been completed.

Cambrex is including tax on global intangible low-taxed income (“GILTI”) as a component of current tax expense in its estimated annual effective tax rate. The Company is considering whether to elect an accounting policy to treat GILTI inclusions as a period cost in each year incurred, or to recognize deferred taxes for expected future GILTI inclusions, therefore this accounting policy election is incomplete under SAB No. 118.