INCOME TAXES

3 Months Ended

Mar. 31, 2016

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 any change 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, 2016, the income tax (benefit) provision reflects an effective tax rate of 56.7 percent compared to an effective tax rate of 33.0 percent for the comparable period in the prior year. The Company recognized a discrete income tax benefit of $15.7 million in the first quarter of 2016 related to the resolution of uncertain state income tax positions. As a result of ongoing state income tax audit examination activity, the Company now believes certain of its positions meet the recognition criteria pursuant to ASC 740, thus resulting in the discrete adjustment for the quarter. As a result of this adjustment, the balance of unrecognized tax benefits as of March 31, 2016 was approximately $2.2 million.

The Company adopted the provisions of Accounting Standards Update 2015-17 as of the year ended December 31, 2015 that requires all deferred tax balances to be classified as non-current. Accordingly, the net deferred tax balance has been reflected as a non-current liability in the accompanying balance sheet as of March 31, 2016.