Note 12.Income Taxes

A reconciliation of the consolidated effective income tax rate for the six months ended January 31, 2016 to the six months ended January 31, 2017 is as follows:


	Consolidated
	Effective
	Income Tax Rate
January 31, 2016	36.3	%
Differential attributable to:
Excess tax benefits	(4.3)	%
Other	(1.0)	%
January 31, 2017	31.0	%

The consolidated effective tax rate for the six months ended January 31, 2017 was favorably affected primarily by the recording of excess tax benefits relating to stock awards that vested in October 2016. As a result of the adoption of ASU 2016-09 on August 1, 2016, we no longer record excess tax benefits as an increase to additional paid-in capital, but record such excess tax benefits on a prospective basis as a reduction of income tax expense, which amounted to $45,000 and $2,286,000 for the three and six months ended January 31, 2017, respectively, as further described in Notes 2 and 4 of the Condensed Consolidated Financial Statements. Since most of our stock awards vest in October annually, we do not anticipate the recording of additional significant excess tax benefits for the remainder of fiscal 2017.

We record liabilities for an unrecognized tax benefit when a tax benefit for an uncertain tax position is taken or expected to be taken on a tax return, but is not recognized in our Condensed Consolidated Financial Statements because it does not meet the more-likely-than-not recognition threshold that the uncertain tax position would be sustained upon examination by the applicable taxing authority. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon settlement with the tax authorities. Any adjustments upon resolution of income tax uncertainties are recognized in our results of operations. Our policy is to record potential interest and penalties related to income tax positions in interest expense and general and administrative expense, respectively, in our Condensed Consolidated Financial Statements. However, such amounts have historically been insignificant due to the minimal amount of our unrecognized tax benefits relating to uncertain tax positions. For the three and six months ended January 31, 2017 and fiscal 2016, we have not had any uncertain tax positions in which a liability would be recorded.

The Company concluded an audit by the Internal Revenue Service (“IRS”) for fiscal years 2013 and 2012 and is currently undergoing an audit by the IRS for fiscal year 2015. With respect to state or foreign income tax examinations, we are generally no longer subject to examinations for fiscal years ended prior to July 31, 2008.