8. Income Taxes

For the three and six months ended June 30, 2016, our interim income tax benefits were recorded using the discrete effective tax rate method. Management believes the use of the discrete method for this period is more appropriate than applying the full-year effective tax rate method due to the actual results for the six months ended June 30, 2016 compared to the expected results for the full year and the sensitivity of the effective tax rate to small changes in forecasted annual pre-tax income or loss. Under the discrete method, the Company determines the tax provision based upon actual results as if the interim period were a full-year period. The resulting effective tax rates for the three and six months ended June 30, 2016 were (58.2)% and (44.0)%, respectively. The difference between the Company’s effective tax rate and the statutory 35% rate was primarily due to: (i) state and local income taxes determined by the mix of income or loss from the operations by entity and state income tax jurisdiction; (ii) a decrease in the valuation allowance driven by the utilization of state tax losses; and (iii) tax benefits related to income attributable to noncontrolling interests for which no taxes are provided.

For the three and six months ended June 30, 2015, our interim income tax benefits were recorded by applying a projected full-year effective income tax rate to the quarterly Loss before income taxes for results that are deemed to be reliably estimable. Certain results dependent on fair value adjustments are considered not to be reliably estimable, and therefore, discrete year-to-date income tax provisions are recorded on those results. The resulting effective tax rates for the three and six months ended June 30, 2015 were (24.9)% and (23.9)%, respectively. The difference between the Company’s effective tax rate and the statutory 35% rate was primarily due to: (i) an increase in nondeductible expenses related to legal and regulatory matters, premiums paid to exchange the Convertible notes due in 2017 and certain amounts of officer's compensation; (ii) an increase in the valuation allowance driven by state tax losses generated and an increase in the non net operating loss deferred tax assets; and (iii) tax benefits related to income attributable to noncontrolling interests for which no taxes are provided.