Income Taxes

The effective tax rate is calculated as the amount of income tax expense (benefit) divided by income before income tax expense (benefit). For the three and nine month periods ended September 30, 2018 and 2017, the Company’s approximate effective tax rates were as follows:



	2018	2017
Three months ended September 30,	21.1%	37.5%
Nine months ended September 30,	21.5%	36.2%

The effective tax rate for the three and nine months ended September 30, 2018 was lower than prior periods primarily due to the benefits of Federal tax reform on 2018's tax provisions.

In addition, in the nine months ended September 30, 2018, the Company recognized a tax benefit of approximately $2.7 million related to the settlement of prior year state uncertain tax positions and approximately $2.8 million of excess tax benefits related to stock compensation for employees. For the nine months ended September 30, 2017, the Company recorded benefits from two discrete tax items, which were approximately $1.9 million of excess tax benefits related to stock compensation and a tax benefit of approximately $1.3 million related to the settlement of prior year state uncertain tax positions.

The Company was included in Murphy Oil’s tax returns for the periods prior to the separation. The statute of several jurisdictions remains subject to audit by taxing authorities. As of September 30, 2018, the earliest year remaining open for Federal examination is 2015 and for the states it ranges from 2013-2016. In addition to the pre-separation returns being open under statute, the federal and state tax returns post separation are also open under statute for examination. Although the Company believes that recorded liabilities for uncertain tax positions are adequate, additional gains or losses could occur in future periods from resolution of outstanding unsettled matters.