Tax

The effective tax rate for the three months ended March 31, 2017 and 2016 was 7.0% and 50.0%, respectively. Market conditions continued to negatively impact our business in the first quarter of 2017. As a result of these conditions, we established a valuation allowance on losses and tax credits in the current year, which, when applied to losses resulted in a lower effective tax rate than the U.S. statutory rate. For the three months ended March 31, 2016, the effect of lower tax rates on income earned in foreign jurisdictions and a reduction in tax reserves due to audit settlements, when applied to losses, resulted in a higher effective tax rate.

For the three months ended March 31, 2016, the Company utilized the discrete-period method to compute its interim tax provision due to significant variations in the relationship between income tax expense and pre-tax accounting income or loss; consequently, the actual effective rate for the interim period was reported. For the three months ended March 31, 2017, the Company has returned to estimating and recording a full year effective tax rate.