XML 32 R20.htm IDEA: XBRL DOCUMENT v3.4.0.3
Income Taxes
3 Months Ended
Mar. 31, 2016
Income Tax Disclosure [Abstract]  
Income Taxes

11. Income Taxes

 

The Company’s effective income tax rate was 33.4% for the three months ended March 31, 2016, compared to 42.4% for the three months ended March 31, 2015.  The Domestic Production Activities Deduction (the “Section 199 Deduction”) was enacted as part of the American Jobs Creation Act of 2004 (as revised by the Emergency Economic Stabilization Act of 2008), and allows a deduction of 9% on the lesser of qualified production activities income or taxable income.  For tax purposes, the Company had net operating losses for the years ended December 31, 2015 and 2014, which are being carried back to prior years.  These carrybacks resulted in the loss of the benefits of previous Section 199 Deductions.  The loss of these benefits was recognized in the quarter ended March 31, 2016, which reduced the tax benefit for the quarter ended March 31, 2016 and lowered the effective tax rate.  

 

In 2015, the Company expected a loss before income taxes for financial statement purposes for the year ending December 31, 2015; however, as of March 31, 2015, the Company expected to have taxable income for the year ending December 31, 2015, and the Section 199 Deduction was expected to provide a permanent tax benefit.  The interplay between the expected loss before income taxes for financial statement purposes and the permanent tax benefit expected to be provided by the Section 199 Deduction resulted in a higher effective income tax rate for the three months ended March 31, 2015.