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INCOME TAXES
3 Months Ended
Mar. 31, 2018
INCOME TAXES  
INCOME TAXES
10. INCOME TAXES

 

The Company determines its periodic income tax benefit or expense based upon the current period income and the annual estimated tax rate for the Company adjusted for discrete items including changes to prior period estimates. The estimated tax rate is revised, if necessary, as of the end of each successive interim period during the fiscal year to the Company's current annual estimated tax rate.

  
For the three months ended March 31, 2018, the effective tax rate reflects an income tax provision of 21.6 percent compared to an income tax benefit of 100.6 percent for the comparable period in the prior year. The 2018 effective rate reflects increased income offset by the lower corporate income tax rate from the recently enacted Tax Cuts & Jobs Act. Both quarters reflect beneficial discrete adjustments of ASU 2016-09 that requires excess tax benefits and deficiencies to be recognized as a component of income tax expense rather than stockholders’ equity.

 

On January 1, 2018, the Company implemented the provisions of Tax Cuts and Jobs Act (“the Act”) and recorded adjustments relating to changes in tax rates on deferred tax assets and liabilities during the year ended December 31, 2017. The Company is currently analyzing additional information related to its accounting for the income tax effects of the Act as it pertains to the deduction for executive compensation, including the impact for compensation that is paid pursuant to a binding contract that would have been deductible under the prior rules. Due to the complexity of this provision, additional time is needed to further analyze our executive compensation program, exceptions under the binding contract rule, and the impact of vesting of restricted stock grants, dividends, and bonuses. We are also conducting additional testing and review of assets that qualify for immediate expensing under the new rules that may adjust the provisional amounts that were recognized in our financial statements at December 31, 2017. The ultimate impact of the Act may differ from the recorded amounts due to changes in our interpretations and assumptions, as well as additional regulatory guidance that may be issued. We expect to complete the accounting for tax reform with the completion of our 2017 Federal income tax return, expected to be complete by the third quarter of 2018.