|6 Months Ended|
Jun. 30, 2017
|Income Tax Disclosure [Abstract]|
8. Income Taxes
Income taxes were an expense of $29.4 million and $57.8 million for the three and six months ended June 30, 2017, respectively, as compared to a benefit of $20.1 million and an expense of $27.5 million for the same periods in 2016. The effective income tax rate was 17.6% and 20.6% for the three and six months ended June 30, 2017, respectively, as compared to 46.7% and 27.4% for the same periods in 2016. The decrease in the effective tax rate for the three months ended June 30, 2017, as compared to the same period in 2016, was due to the change in the geographic mix of the Company’s income, primarily related to the FTC settlement and to an increase in net benefits from discrete events. The decrease in the effective tax rate for the six months ended June 30, 2017, as compared to the same period in 2016, was primarily due to an increase in net benefits from discrete events. Included in the discrete events for the three and six months ended June 30, 2017 was the impact of $21.4 million and $25.7 million of excess tax benefits generated during those respective periods, relating to the Company’s application of ASU 2016-09 that was adopted on January 1, 2017.
As of June 30, 2017, the total amount of unrecognized tax benefits, including related interest and penalties was $72.7 million. If the total amount of unrecognized tax benefits was recognized, $52.4 million of unrecognized tax benefits, $11.3 million of interest and $2.3 million of penalties would impact the effective tax rate.
The Company believes that it is reasonably possible that the amount of unrecognized tax benefits could decrease by up to approximately $11.1 million within the next twelve months. Of this possible decrease, $4.0 million would be due to the settlement of audits or resolution of administrative or judicial proceedings. The remaining possible decrease of $7.1 million would be due to the expiration of statute of limitations in various jurisdictions. For a description on contingency matters relating to income taxes see Note 5, Contingencies.
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.
Reference 1: http://www.xbrl.org/2003/role/presentationRef