INCOME TAXES

The following is the detail of income tax benefit recorded for the three and nine months ended September 30, 2016 (in thousands):



	Three Months Ended September 30, 2016			Nine Months Ended September 30, 2016
Current operations	$	(2,217	)	$	(11,160	)
Change in unrecognized tax benefits	(864		)	(2,865		)
Change in valuation allowance	1,692			8,942
Income tax benefit	$	(1,389	)	$	(5,083	)

For the three and nine months ended September 30, 2016, the Company provided a full valuation allowance against the federal tax benefit generated from its U.S. operations as it was more likely than not that such benefit would not be realized. For the same periods, the Company recognized the tax benefits generated from its Canadian operations.

During the first nine months of 2016, the Company settled its outstanding appeal with Canada Revenue Agency related to certain royalty payments made to the Company’s U.S. entities for years 2003 to 2007 and a domestic audit for the years 2011 and 2012. As a result of these settlements, the Company recorded a tax benefit of $0.3 million and $2.4 million for the three and nine months ended September 30, 2016, respectively. The Company also recognized a $0.6 million tax benefit in the three and nine months ended September 30, 2016 due to a lapse in statute of limitations on previously unrecognized positions. The $2.9 million tax benefit recorded in the nine months ended September 30, 2016 also includes $0.1 million of additional interest expense on uncertain tax positions.

The Company believes that it is reasonably possible that a decrease of up to $0.2 million in unrecognized tax benefits may be necessary within the coming year due to a lapse in statute of limitations. Such a decrease in unrecognized tax benefits would also have a $0.2 million impact on the tax provision, which would affect the effective tax rate.