INCOME TAXES

3 Months Ended

Mar. 31, 2017

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, 2017, the effective rate reflects an income tax benefit of 100.6 percent compared to an income tax benefit of 56.7 percent for the comparable period in the prior year. The Company adopted the provisions of ASU 2016-09 in the first quarter of 2017 that requires excess tax benefits and deficiencies to be recognized as a component of income tax expense rather than stockholders’ equity. This resulted in a beneficial discrete adjustment of $2.5 million to the provision for income taxes in the first quarter of 2017. The 2016 beneficial rate was the result of operational losses and the one-time beneficial impact of a resolution of a tax matter with a state taxing authority, offset by the detrimental effect of non-deductible permanent items.