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INCOME TAXES | 6 Months Ended
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Jun. 30, 2018
Income Tax Disclosure [Abstract] |
INCOME TAXES |
15. | INCOME TAXES:
The Company is subject to income taxes in both the United States and foreign jurisdictions. The effective income tax rate was an expense of 14.6% and 8.9%, respectively, for the three and six months ended June 30, 2018. The Company recorded an income tax expense of $1.9 million and $1.6 million, respectively, for the three and six months ended June 30, 2018. The recorded amounts include deductions for employee share awards in excess of compensation costs (“windfalls”) under ASU No. 2016-09 of $448,000 and $1.7 million, respectively, for the three and six months ended June 30, 2018. The effective income tax rate was an expense of 23.0% and 22.3%, respectively, for the three and six months ended June 30, 2017. The Company recorded an income tax expense of $14.1 million and $16.5 million, respectively, for the three and six months ended June 30, 2017. The recorded amounts include deductions for employee share awards in excess of compensation costs (“windfalls”) under ASU No. 2016-09 of $1.2 million and $2.4 million, respectively, for the three and six months ended June 30, 2017. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent on the Company's ability to generate future taxable income to obtain benefit from the reversal of temporary differences, net operating loss carryforwards and tax credits. As part of its assessment management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies. At this time there is no evidence to release the valuation allowances that relate to UDC Ireland and New Jersey research and development credit. On November 27, 2014, in a case where the Company was not a party, the Korean Supreme Court concluded that royalties received by a U.S. corporation from a Korean corporation for the license of patents registered abroad but not in Korea do not constitute domestic-source income as defined in the Korea/U.S. Tax Treaty. As a result of this decision, the Company filed amended withholding tax returns for the years 2011 through June 2015. These returns were rejected by the Korean National Tax Service (KNTS) and subsequently by the Korean Tax Tribunal. The Company has also filed additional amended returns through December 31, 2017. Concurrent with filing the original amended returns with KNTS, the Company filed a request with the IRS for Competent Authority for a bilateral agreement between the United States and Korea to clarify the treaty provisions. This Mutual Agreement Procedure (MAP) was accepted by KNTS on September 15, 2017. Once invoked, the Company can postpone the filing of additional appeals until the MAP process is complete. As a result of recent developments and discussions with the Company’s outside tax advisors, the Company believes that it is now more-likely-than-not that a favorable settlement will be reached resulting in a reduction of the Korean withholding taxes previously withheld since 2011. A long-term receivable of $37.5 million for estimated refunds due from the Korean government, a long-term payable of $18.3 million for estimated amounts due to the U.S. Federal government based on amendment of prior year U.S. tax returns for the lower withholding amounts, and a reduction of deferred tax assets for foreign tax credits and R&D credits of $19.2 million has been recorded on the June 30, 2018 financial statements for this matter. These estimates may change in the future and ultimately upon settlement of the uncertain tax position.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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