Income Taxes

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



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(Dollars in thousands)
Income tax expense	$	34,645		$	34,692		$	102,554		$	104,227
Effective tax rate	23		%	23		%	22		%	24		%

The effective tax rate for the three and nine months ended September 30, 2017 and 2016 was 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. Additionally, the effective tax rate for nine months ended September 30, 2017 is also reduced by $8.2 million of excess tax benefits related to stock-based compensation, which are included in income tax expense, pursuant to the adoption of ASU 2016-09 Improvements to Employee Share-Based Payment Accounting as discussed in Note 1.

Deferred tax assets, net of a valuation allowance, and liabilities as of September 30, 2017 reflect the use of a portion of U.S. foreign tax credits during the nine months ended September 30, 2017, an increase in the deferred tax liability related to the Subordinated Convertible Debentures, as well as the recognition of previously unrecognized excess tax benefits on stock awards which were recorded pursuant to the Company’s adoption of ASU 2016-09.