(5) INCOME TAXES

Income tax (benefit) expense was as follows (in thousands):

		Three Months Ended June 30,						Six Months Ended June 30,
		2015			2014			2015			2014
Income tax (benefit) expense	$	(61,975	)	$	117,976		$	(39,609	)	$	136,933
Effective tax rate		34.3	%		40.8	%		30.3	%		40.2	%

We compute our quarterly taxes under the effective tax rate method based on applying an anticipated annual effective rate to our year-to-date income, except for discrete items. Income taxes for discrete items are computed and recorded in the period that the specific transaction occurs. For second quarter and the six months ended June 30, 2015 and 2014, our overall effective tax rate was different than the federal statutory rate of 35% due primarily to state income taxes, valuation allowances and other permanent differences. The three months ended June 30, 2015 includes tax expense of $6.1 million and the six months ended June 30, 2015 includes $11.3 million of income tax expense related to increases in our valuation allowances for state net operating loss and credit carryforwards. The three months ended June 30, 2015 includes an income tax expense of $1.1 million and the six months ended June 30, 2015 includes an income tax benefit of $874,000 adjusting our valuation allowance for our deferred tax asset related to future deferred compensation plan distributions of our senior executives.