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INCOME TAXES
3 Months Ended
Mar. 31, 2019
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES
Income tax expense (benefit) for the three months ended March 31, 2019, was $(24.3) million, or (8.7)% of income before taxes, compared with $2.6 million, or 0.9% of income before taxes, for the three months ended March 31, 2018. The effective tax rates for the three months ended March 31, 2019, and 2018, differed from the U.S. federal statutory rate of 21% primarily due to excess tax benefits associated with employee equity plans, the effect of income earned by certain overseas entities being taxed at rates lower than the federal statutory rate, and federal research and development (“R&D”) credit benefit, partially offset by state income taxes (net of federal benefit) and U.S. tax on foreign earnings.
The Company intends to repatriate earnings from its Swiss subsidiary as needed and the U.S. and foreign tax implications of such repatriations are not expected to be significant. The Company plans to continue to indefinitely reinvest earnings from the rest of the Company’s foreign subsidiaries, which are not significant.
As of March 31, 2019, the Company had a total of gross unrecognized tax benefits of $82.3 million compared with $78.8 million as of December 31, 2018. If recognized, the gross unrecognized tax benefits would reduce the effective tax rate in the period of recognition.
The Company files federal, state, and foreign income tax returns in many U.S. and OUS jurisdictions. Years before 2015 are closed for the significant jurisdictions. Certain of the Company’s unrecognized tax benefits could change due to activities of various tax authorities, including potential assessment of additional tax, possible settlement of audits, or through normal expiration of various statutes of limitations, which could affect the Company’s effective tax rate in the period in which they change. Due to the uncertainty related to the timing and potential outcome of audits, the Company cannot estimate the range of reasonably possible change in unrecognized tax benefits that may occur in the next 12 months.
The Company is subject to the examination of its income tax returns by the Internal Revenue Service and other tax authorities. The outcome of these audits cannot be predicted with certainty. The Company’s management regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of the Company’s provision for income taxes. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.