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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | (11) Income Taxes U.S. and international components of income (loss) before income taxes (in thousands) were comprised of the following for the periods indicated:
|  | Years Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
U.S. |  | $ | 51,145 |  |  | $ | 68,555 |  |  | $ | (5,389 | )
Foreign |  |  | 61,901 |  |  |  | 69,309 |  |  |  | 16,440 |
Total |  | $ | 113,046 |  |  | $ | 137,864 |  |  | $ | 11,051 |
The provision for income taxes (in thousands) consisted of the following for the periods indicated:
|  | Years Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 18,453 |  |  | $ | 11,748 |  |  | $ | (306 | )
State |  |  | 3,681 |  |  |  | 2,997 |  |  |  | (1 | )
Foreign |  |  | 4,941 |  |  |  | 7,565 |  |  |  | 7,638 |
|  | $ | 27,075 |  |  | $ | 22,310 |  |  | $ | 7,331 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (4,742 | ) |  | $ | 9,215 |  |  | $ | (2,132 | )
State |  |  | (890 | ) |  |  | 693 |  |  |  | (1,038 | )
Foreign |  |  | 695 |  |  |  | (285 | ) |  |  | 1,855 |
|  | $ | (4,937 | ) |  | $ | 9,623 |  |  | $ | (1,315 | )
Total provision |  | $ | 22,138 |  |  | $ | 31,933 |  |  | $ | 6,016 |
The provision for income taxes differs from the amount computed by applying the federal statutory income tax rate to the Company’s income before income taxes as follows for the periods indicated:
|  | Years Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Income tax expense at federal statutory rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State taxes, net of federal tax effect |  |  | 1.6 | % |  |  | 1.7 | % |  |  | -4.3 | %
Foreign earnings taxed at different rates |  |  | -15.5 | % |  |  | -14.0 | % |  |  | 2.9 | %
Withholding tax |  |  | 1.4 | % |  |  | 1.1 | % |  |  | 14.3 | %
Foreign tax credit |  |  | -1.0 | % |  |  | -0.3 | % |  |  | -9.6 | %
Other international components |  |  | -0.1 | % |  |  | 0.8 | % |  |  | 0.8 | %
Change in valuation allowance |  |  | -0.8 | % |  |  | -0.1 | % |  |  | 21.1 | %
Deferred tax adjustments and rate changes |  |  | 0.1 | % |  |  | -0.1 | % |  |  | -4.9 | %
Meals and entertainment |  |  | 0.4 | % |  |  | 0.3 | % |  |  | 5.9 | %
Non-deductible officers compensation |  |  | 0.1 | % |  |  | 0.0 | % |  |  | 2.0 | %
Personal use of corporate aircraft |  |  | 0.1 | % |  |  | 0.1 | % |  |  | 2.5 | %
Subpart F income |  |  | 0.6 | % |  |  | 0.5 | % |  |  | 4.0 | %
Research and development tax credit |  |  | -0.8 | % |  |  | -0.6 | % |  |  | -13.7 | %
Section 199 Deduction |  |  | -1.8 | % |  |  | -1.5 | % |  |  | 0.0 | %
Other permanent differences |  |  | 0.3 | % |  |  | 0.3 | % |  |  | -1.6 | %
Total |  |  | 19.6 | % |  |  | 23.2 | % |  |  | 54.4 | %
The Company’s U.S. and foreign effective tax rates for income before income taxes were as follows for the periods indicated:
|  | Years Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
U.S. |  |  | 32.3 | % |  |  | 36.0 | % |  |  | 64.5 | %
Foreign |  |  | 9.1 | % |  |  | 10.5 | % |  |  | 57.7 | %
Combined |  |  | 19.6 | % |  |  | 23.2 | % |  |  | 54.4 | %
Except as discussed below, the Company intends to indefinitely reinvest its undistributed earnings of all of its foreign subsidiaries. Therefore, the annualized effective tax rate applied to the Company’s pre-tax income does not include any provision for U.S. federal and state income taxes on the amount of the undistributed foreign earnings. U.S. federal tax laws, however, require the Company to include in its U.S. taxable income certain investment income earned outside of the United States in excess of certain limits (“Subpart F deemed dividends”). Because Subpart F deemed dividends are already required to be recognized in the Company’s U.S. federal income tax return, the Company regularly repatriates Subpart F deemed dividends to the United States and no additional tax is incurred on the distribution. The Company repatriated Subpart F deemed dividends of $1.9 million and $1.3 million in 2016 and 2014, respectively, with no additional tax incurred. The Company did not repatriate any Subpart F deemed dividends in 2015 because it did not report any Subpart F income on its 2014 U.S. tax return. As of December 31, 2016 and 2015, the amount of cash and cash equivalents and short-term investments held by U.S. entities was $279.8 million and $219.3 million, respectively, and by non-U.S. entities was $309.6 million and $266.4 million, respectively. If the cash and cash equivalents and short-term investments held by non-U.S. entities were to be repatriated to the United States, the Company would generate U.S. taxable income to the extent of the Company’s undistributed foreign earnings, which amounted to $322.0 million at December 31, 2016. Although the tax impact of repatriating these earnings is difficult to determine, the Company would not expect the maximum effective tax rate that would be applicable to such repatriation to exceed the U.S. statutory rate of 35.0%, after considering applicable foreign tax credits. Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities (in thousands) were as follows for the periods indicated:
|  | December 31, |
|  | 2016 |  |  | 2015 |
Deferred tax assets, net: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 214 |  |  | $ | 501 |
Tax credits |  |  | 1,372 |  |  |  | 2,984 |
Intangible assets |  |  | 11 |  |  |  | 24 |
Deferred revenue adjustment |  |  | 3,305 |  |  |  | 3,454 |
Accrued compensation |  |  | 7,866 |  |  |  | 7,331 |
Share-based compensation expense |  |  | 11,440 |  |  |  | 9,905 |
Deferred rent |  |  | 1,281 |  |  |  | 2,409 |
Other |  |  | 2,002 |  |  |  | 2,915 |
Deferred tax assets before valuation allowance |  |  | 27,491 |  |  |  | 29,523 |
Valuation allowance |  |  | (832 | ) |  |  | (1,984 | )
Deferred tax assets, net of valuation allowance |  |  | 26,659 |  |  |  | 27,539 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Prepaid expenses and other |  |  | 1,098 |  |  |  | 1,389 |
Property and equipment |  |  | 10,821 |  |  |  | 12,253 |
Capitalized software development costs |  |  | 3,330 |  |  |  | 5,925 |
Total deferred tax liabilities |  |  | 15,249 |  |  |  | 19,567 |
Total net deferred tax asset |  | $ | 11,410 |  |  | $ | 7,972 |
Reported as: |  |  |  |  |  |  |  |
Non-current deferred tax assets, net |  |  | 11,704 |  |  |  | 7,989 |
Non-current deferred tax liabilities |  |  | (294 | ) |  |  | (17 | )
Total net deferred tax asset |  | $ | 11,410 |  |  | $ | 7,972 |
As of December 31, 2016 and 2015, the Company had income taxes payable of $10.5 million and $4.8 million, respectively, recorded in “Accounts payable and accrued expenses” in the Company’s Consolidated Balance Sheets. As of December 31, 2016, the Company had unrecognized tax benefits of $3.5 million, recorded in “Other long-term liabilities” in the Company’s Consolidated Balance Sheets. The change in unrecognized tax benefits (in thousands) is presented in the table below:
Unrecognized tax benefits at January 1, 2016 |  | $ | 3,298 |
Increase related to positions taken in prior period |  |  | 76 |
Increase related to positions taken in current period |  |  | 241 |
Decrease related to expiration of statute of limitations |  |  | (100 | )
Decrease related to settlement with tax authority |  |  | (394 | )
Unrecognized tax benefits at December 31, 2016 |  |  | 3,121 |
Accrued interest |  |  | 415 |
Unrecognized tax benefits recorded in other long-term liabilities at December 31, 2016 |  | $ | 3,536 |
If recognized, $2.8 million of the gross unrecognized tax benefits would impact the Company’s effective tax rate. Over the next 12 months, the amount of the Company’s liability for unrecognized tax benefits shown above is not expected to change by a material amount. The Company recognizes estimated accrued interest related to unrecognized tax benefits in the provision for income tax accounts. During the year ended December 31, 2016, 2015 and 2014, the Company released or recognized an immaterial amount of accrued interest. The amount of accrued interest related to the above unrecognized tax benefits was approximately $0.4 million and $0.3 million as of December 31, 2016 and 2015, respectively. The Company files tax returns in numerous foreign countries as well as the United States and its tax returns may be subject to audit by tax authorities in all countries in which it files. Each country has its own statute of limitations for making assessment of additional tax liabilities. In 2016, the Company settled the tax examination in the United States for tax years 2011 and 2012 without any material audit assessments. The Company’s U.S. tax returns for tax years from 2013 forward are subject to potential examination by the Internal Revenue Service. The Company’s major foreign tax jurisdictions and the tax years that remain subject to potential examination are Germany for tax years 2013 forward, Poland and China for tax years 2012 forward, Spain for tax years 2013 forward, and the United Kingdom for tax years 2015 forward. To date there have been no material audit assessments related to audits in the United States or any of the applicable foreign jurisdictions. The Company had no U.S. net operating loss carryforwards as of December 31, 2016 and 2015. The Company had $0.7 million and $1.1 million of foreign net operating loss carryforwards as of December 31, 2016 and 2015, respectively. The Company had foreign tax credit and certain state tax credit carryforward tax assets totaling $0.3 million at December 31, 2016, which begin to expire in 2026. The Company had domestic research and development tax credit, foreign tax credit, and alternative minimum tax credit carryforward tax assets totaling $1.8 million at December 31, 2015. The timing and ability of the Company to use these losses and credits may be limited by Internal Revenue Code provisions regarding changes in ownership of the Company as discussed below. The Company’s valuation allowances of $0.8 million and $2.0 million at December 31, 2016 and 2015, respectively, primarily relate to certain foreign tax credit carryforward tax assets. In determining the Company’s provision for or benefit from income taxes, net deferred tax assets, liabilities, and valuation allowances, management is required to make judgments and estimates related to projections of domestic and foreign profitability, the timing and extent of the utilization of net operating loss carryforwards, applicable tax rates, transfer pricing methods, and prudent and feasible tax planning strategies. As a multinational company, the Company is required to calculate and provide for estimated income tax liabilities for each of the tax jurisdictions in which it operates. This process involves estimating current tax obligations and exposures in each jurisdiction, as well as making judgments regarding the future recoverability of deferred tax assets. Changes in the estimated level of annual pre-tax income, changes in tax laws, particularly changes related to the utilization of net operating losses in various jurisdictions, and changes resulting from tax audits can all affect the overall effective income tax rate which, in turn, impacts the overall level of income tax expense or benefit and net income. Judgments and estimates related to the Company’s projections and assumptions are inherently uncertain. Therefore, actual results could differ materially from projections. The timing and manner in which the Company will use research and development tax credit carryforward tax assets, alternative minimum tax credit carryforward tax assets, and foreign tax credit carryforward tax assets in any year, or in total, may be limited by provisions of the Internal Revenue Code regarding changes in the Company’s ownership. Currently, the Company expects to use the tax assets, subject to Internal Revenue Code limitations, within the carryforward periods. Valuation allowances have been established where the Company has concluded that it is more likely than not that such deferred tax assets are not realizable. If the Company is unable to sustain profitability in future periods, it may be required to increase the valuation allowance against the deferred tax assets, which could result in a charge that would materially adversely affect net income in the period in which the charge is incurred. Section 382 of the Internal Revenue Code provides an annual limitation on the amount of federal net operating losses and tax credits that may be used in the event of an ownership change. The limitation is based on, among other things, the value of the company as of the change date multiplied by a U.S. federal long-term tax exempt interest rate. The Company does not currently expect the limitations under the Section 382 ownership change rules to impact the Company’s ability to use its net operating loss carryforwards or tax credits that existed as of the date of the ownership change.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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