Income Taxes

The following table presents income tax expense and the effective tax rate:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(Dollars in thousands)
Income tax expense	$	29,486		$	16,305		$	88,565		$	73,047
Effective tax rate	24		%	15		%	24		%	20		%

The effective tax rate for the three and nine months ended September 30, 2015 and 2014 is lower than the statutory federal rate of 35% primarily due to tax benefits from foreign income taxed at lower rates, partially offset by state income taxes and non-deductible stock-based compensation. The effective tax rate for the three and nine months ended September 30, 2014 was also reduced by discrete income tax benefits recognized as a result of changes in estimates of U.S. income taxes related to the 2013 worthless stock deduction and the 2014 repatriation of earnings from foreign subsidiaries. The Company recognized a discrete tax benefit of $5.2 million in the second quarter of 2014 and an additional $11.4 million during the third quarter of 2014 related to these changes.

Current deferred tax liabilities and Other long-term tax liabilities as of September 30, 2015 reflect the use of a portion of U.S. foreign tax credits during the nine months ended September 30, 2015, an increase in the deferred tax liability related to the Subordinated Convertible Debentures, and the reclassification of unrecognized tax benefits.

The Company’s federal income tax returns for 2010, 2011 and 2012 continue to be under examination by the Internal Revenue Service (“the IRS”). During the three months ended September 30, 2015, the Company received notification that its federal income tax returns for 2013 and 2014 are also under examination by the IRS.