Income Taxes

We believe that our recorded deferred tax assets and liabilities are reasonable. However, tax laws and regulations are subject to interpretation and tax litigation is inherently uncertain, and therefore our assessments can involve a series of complex judgments about future events and rely heavily on estimates and assumptions.

The effective tax rates for the three-month periods ended March 31, 2017 and 2016 were 21.9% and 25.0%, respectively. The variance was primarily attributable to the earnings mix between our higher and lower tax rate jurisdictions and the reduced tax benefit resulting from the adoption of the new guidance for share-based payment accounting (Note 1).

We adopted a year-to-date effective tax rate method for recording income taxes for the three-month periods ended March 31, 2017 and 2016. The adoption of this method was based on our expectations at March 31, 2017 and 2016 that a small change in our estimated ordinary income could result in a large change in the estimated annual effective tax rate. We will re-evaluate our use of this method each quarter until such time a return to the annualized effective tax rate method is deemed appropriate.

Income taxes are provided based on the U.S. statutory rate of 35% and at the local statutory rate for each foreign jurisdiction adjusted for items that are allowed as deductions for federal and foreign income tax reporting purposes, but not for book purposes. The primary differences between the U.S. statutory rate and our effective rate are as follows:



	Three Months Ended March 31,
	2017		2016

U.S. statutory rate	35.0	%	35.0	%
Foreign provision	(11.1	)	(9.8	)
Other	(2.0	)	(0.2	)
Effective rate	21.9	%	25.0	%