CJ 2017 Annual Report

accelerated amortization of original issue discount and deferred financing costs as a result of the Restructuring Support agreement. Income Taxes We recorded an income tax benefit of $39.8 million for the year ended December 31, 2017, at an effective rate of 229.8%, compared to income tax benefit of $129.0 million for the year ended December 31, 2016, at an effective rate of 12.0%. The increase in the effective tax rate is primarily due to adjustments to reduce valuation allowances previously applied against certain deferred tax assets, including net operating loss carryforwards. These adjustments were the result of the treatment of the O-Tex Transaction as a non-taxable transaction, resulting in the acquired assets and liabilities having carryover basis for tax purposes. At the closing of the transaction, an estimated deferred tax liability of approximately $31.3 million was recorded to account for the differences between the preliminary purchase price allocation and carryover tax basis. 49 Results for the Year Ended December 31, 2016 Compared to the Year Ended December 31, 2015 The following table summarizes the change in our results of operations for the year ended December 31, 2016, compared to the year ended December 31, 2015 (in thousands):