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Income Taxes | 9 Months Ended
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Sep. 30, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Note 11. Income Taxes The Company calculates its interim income tax provision in accordance with ASC Topic 270, “Interim Reporting,” and ASC Topic 740 “Accounting for Income Taxes.” At the end of each interim period, the Company estimates its annual effective tax rate and applies that rate to its ordinary quarterly earnings to calculate the tax related to ordinary income. The tax effects for other items that are excluded from ordinary income are discretely calculated and recognized in the period in which they occur. As of December 22, 2017, the Tax Act was enacted into legislation, which includes a broad range of provisions affecting businesses. The Tax Act significantly revises how companies compute their U.S corporate tax liability by, among other provisions, reducing the corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017, implementing a territorial tax system, and requiring a mandatory one-time tax on U.S owned foreign held earnings and profits known as the toll charge or transition tax. For the nine months ended September 30, 2018, the Company's consolidated effective tax rate was 21.2%. As of December 31, 2017, the Company was able to reasonably estimate certain effects of the Tax Act and, therefore, recorded provisional adjustments associated with the deemed repatriation transition tax and rate change revaluation of the deferred tax assets. Under the provisions of the SEC Staff Accounting Bulletin 118, during the three months ended September 30, 2018, the Company recorded $906,000 in additional expense related to the transition tax. This additional expense was primarily related to IRS guidance released during the third quarter of 2018, which impacted the Company's previous estimate of the transition tax. The Company continues to assess the impact of the IRS guidance and is awaiting relevant guidance related to other provisions included in the Tax Act. As such, the Company is continuing to gather additional information to complete the accounting for the Tax Act within the prescribed measurement period. The realization of deferred tax assets, including loss and credit carryforwards, is subject to the Company generating sufficient taxable income during the periods in which the deferred tax assets become realizable. Due to the Company’s continued profitability, combined with future projections of profitability, the Company has determined that the majority of its U.S. deferred tax assets are more likely than not to be realized. The valuation allowance on the Company’s U.S. deferred tax assets as of September 30, 2018 primarily relates to state net operating loss carryforwards and credits that the Company estimates it may not be able to utilize in future periods. With respect to non-U.S. entities, there continues to be sufficient positive evidence to conclude that realization of its deferred tax assets is more likely than not under applicable accounting rules, and therefore no significant valuation allowances have been established. The income tax provision was $1,335,000 and $1,486,000 for the three months ended September 30, 2018 and 2017, respectively. The decrease in the provision was primarily due to a discrete U.S. return-to-provision benefit in the current quarter combined with the impact of the reduction of the U.S. corporate income tax rate as a result of the Tax Act, partially offset by higher current year pre-tax income in the Company’s U.S. operations. The income tax provision was $35,801,000 and $30,742,000 for the nine months ended September 30, 2018 and 2017, respectively. The increase in the provision was primarily due to higher pre-tax income in the Company’s U.S. operations, which exceeded the impact of the reduction of the corporate tax rate as a result of the Tax Act. At September 30, 2018, the gross liability for income taxes associated with uncertain tax positions was $9,746,000. Of this amount, $1,445,000 would benefit the Company’s consolidated condensed financial statements and effective income tax rate if favorably settled. The unrecognized tax benefit liabilities are expected to decrease by approximately $105,000 during the next 12 months. The gross liability for uncertain tax positions increased by $237,000 for the three months ended September 30, 2018. The increase was primarily due to increases in tax positions taken in the current quarter. The gross liability for uncertain tax positions increased by $446,000 for the nine months ended September 30, 2018. The increase was primarily due to increases for tax positions expected to be taken in the current tax year. The Company recognizes interest and penalties related to income tax matters in income tax expense. For the three months ended September 30, 2018 and 2017, the Company's provision for income taxes includes a net expense of $52,000 and $132,000, respectively, related to the recognition of interest and/or penalties, and for the nine months ended September 30, 2018 and 2017, the provision for income taxes includes a net expense of $46,000 and $241,000, respectively. As of September 30, 2018 and December 31, 2017, the gross amount of accrued interest and penalties included in income taxes payable in the accompanying consolidated condensed balance sheets was $1,664,000 and $1,618,000, respectively. The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company is generally no longer subject to income tax examinations by tax authorities in the following major jurisdictions:
Tax Jurisdiction |  | Years No Longer Subject to Audit
U.S. federal |  | 2010 and prior
California (United States) |  | 2008 and prior
Canada |  | 2010 and prior
Japan |  | 2011 and prior
South Korea |  | 2012 and prior
United Kingdom |  | 2013 and prior
Pursuant to Section 382 of the Internal Revenue Code, use of the Company's net operating losses and credit carry-forwards may be limited significantly if the Company were to experience a cumulative change in ownership of the Company's stock by “5-percent shareholders” that exceeds 50% over a rolling three-year period. The Company does not believe there has been a cumulative change in ownership in excess of 50% during any rolling three-year period, and the Company continues to monitor changes in its ownership. If such a cumulative change did occur in any three-year period and the Company were limited in the amount of losses and credits it could use to offset its tax liabilities, the Company's results of operations and cash flows could be adversely impacted.

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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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