INCOME TAXES

The Company's income tax expense in interim periods is based on an estimated annual effective income tax rate derived, in part, from estimated annual pre-tax results from ordinary operations. The annual effective income tax rate is reviewed and, if necessary, adjusted on a quarterly basis. As a result of adopting ASU 2016-09, all excess tax benefits and deficiencies in the current and future periods will be recognized as income tax expense in the Company’s Condensed Consolidated Statement of Operations in the reporting period in which they occur. This may result in increased volatility in the Company’s effective tax rate.

The Company's income tax expense consisted of the following:



	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2017			2016		2017			2016
Income before provision for income taxes	$	50,373		$	46,340	$	43,366		$	82,096
Income tax expense using estimated annual effective income tax rate	19,152			18,793		16,457			33,317
Changes in effective tax rates	(56		)	210		—			—
Impact of discrete items, net	(269		)	—		(412		)	49
Income tax expense	$	18,827		$	19,003	$	16,045		$	33,366

The discrete items for the six months ended June 30, 2017 are primarily related to an income tax deduction resulting from the adoption of ASU 2016-09 and the results of a recent state income tax audit. The discrete item for the six months ended June 30, 2016 is primarily related to the results of a recent state income tax audit.