INCOME TAXES

9 Months Ended

Sep. 30, 2015

INCOME TAXES

INCOME TAXES

9. INCOME TAXES

The Company determines its periodic income tax provision based upon the current period income and the annual estimated tax rate for the Company adjusted for any change to prior year 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 third quarter of 2015, the income tax provision reflects an effective tax rate of 31.9 percent, compared to an effective tax rate of 30.1 percent for the comparable period in the prior year.  The effective rate for the nine months ended September 30, 2015 is the result of continued beneficial permanent differences including tax-exempt interest income and a favorable U.S. manufacturing deduction.  The third quarter 2015 effective tax rate is higher than the rate for 2014 primarily due to increased profit without the benefit of the federal R&D credit which has not been re-enacted for 2015.