

13.	Income Taxes

The Company's effective tax rate was 24.0 percent for the third quarter of 2016 as compared to 42.4 percent for the third quarter of 2015. A decrease to valuation allowances previously established on estimated non-deductible expenses and certain state net operating losses in the aggregate amount of $3,175 was recorded as a reduction to income tax expense during the third quarter of 2016. The acquisition of EFS provided additional sources of taxable income causing a change in judgment about the realizability of related deferred tax assets. Nondeductible expenses and discrete tax items in the third quarter of 2015 contributed to the higher effective tax rate, as compared to the third quarter of 2016. Other factors contributing to the rate fluctuation include changes in the mix of earnings among different tax jurisdictions as well as changes to overall worldwide profitability.

Undistributed earnings of certain foreign subsidiaries of the Company amounted to $27,092 at September 30, 2016, and $13,230 at December 31, 2015. These earnings are considered to be indefinitely reinvested, and accordingly, no U.S. federal and state income taxes have been provided thereon. Upon distribution of these earnings in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign countries. The Company has determined that the amount of taxes attributable to these undistributed earnings is not practicably determinable.