1.
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In future filings, please enhance your discussion of the known trends, events or uncertainties that have had or will have materially favorable or unfavorable impacts on your financial condition, operating performance, revenues or income, or that result in your liquidity increasing or decreasing in any material way. For instance, we note that your discussions of changes in net sales are recitations of information found in the balance sheets and that you primarily attribute a 2016 year-over-year increase in backlog of 41% to “an improvement in general market conditions.” These are only examples. For guidance, please refer to Item 303 of Regulation S-K and SEC Release No. 33-8350.
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2. |
Regarding your revised assertion for unremitted earnings, please address the following points:
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Expand your disclosure to describe in further detail the changes in your business circumstances and long-term business plan which led to your determination that certain accumulated foreign subsidiary earnings are no longer considered permanently reinvested.
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Tell us the amount of foreign earnings previously determined to be permanently reinvested that has been and/or is expected to be repatriated by jurisdiction, including whether those earnings were distributed to the US or other offshore subsidiaries. Also, tell us if this amount represents the entire amount of unremitted foreign earnings for each jurisdiction, if not how much remains as permanently reinvested by jurisdiction. Finally, for the portion that has not yet been distributed, tell us to which offshore subsidiary the distribution will be made. If there has not been a determination on where the distribution will be made, help us understand how you determined the amount of the deferred tax liability to recognize.
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Tell us how you were able to conclude that you continue to meet the exception for recognition of a deferred tax liability in ASC 740-30-25-17 for your remaining undistributed foreign earnings. As part of your response, tell us how you determined which jurisdictions to distribute their earnings to either the US or other offshore subsidiaries.
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Quantify each factor discussed on page 25 as impacting your effective tax rate for each period presented.
Refer to Item 303(a)(3)(i) of Regulation S-K. |
Withholding taxes on offshore cash movements | 7.7 | % | |||
Change to our assertion that certain foreign earnings are permanently reinvested | 7.4 | % | |||
Change in mix of earnings attributable to higher taxing jurisdictions | 2.5 | % | |||
Increase in the reversal of reserves for uncertain tax positions | -4.4 | % | |||
Prior year impact related to finalization of 2014 income tax year return | -2.2 | % | |||
Change in state rate and valuation allowance | 3.0 | % | |||
Other items not discussed on page 25 | -2.7 | % | |||
Total percentage change | 11.3 | % | |||
cc:
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Jay Knoll, Senior Vice President, Corporate Development, General Counsel, and Secretary
Tracie Mariner, Staff Accountant, Securities and Exchange Commission
Tracey Houser, Staff Accountant, Securities and Exchange Commission
Christopher Ronne, Staff Attorney, Securities and Exchange Commission
Craig Slivka, Special Counsel, Securities and Exchange Commission
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