Equity in Earnings of Affiliates
At March 31, 2017, the Company held interests in a number of home health and hospice joint ventures, and interests in several other affiliates. The Company recorded equity in earnings of affiliates of $0.6 million for the first quarter of 2017, compared to $1.0 million for the first quarter of 2016.
Other Non-Operating Income (Expense)
The Company recorded total other non-operating income, net, of $0.8 million for the first quarter of 2017, compared to $15.1 million for the first quarter of 2016. The 2017 amounts included $1.7 million in foreign currency gains, partially offset by other items. The 2016 amounts included an $18.9 million gain on the sale of a business and a $1.8 million gain on the sale of marketable equity securities, offset by $5.4 million in foreign currency losses and other items.
Net Interest Expense and Related Balances
The Company incurred net interest expense of $6.8 million for the first quarter of 2017, compared to $7.4 million for the first quarter of 2016. At March 31, 2017, the Company had $493.3 million in borrowings outstanding at an average interest rate of 6.3% and cash, marketable equity securities and other investments of $1,113.9 million.
Provision for Income Taxes
The Company's effective tax rate for the first three months of 2017 was 11.4%, compared to 37.0% for the first three months of 2016. The low effective tax rate in the first quarter of 2017 is due to a $5.9 million income tax benefit related to the vesting of restricted stock awards. In the first quarter of 2017, the Company adopted a new accounting standard that requires all excess income tax benefits and deficiencies from stock compensation to be recorded as discrete items in the provision for income taxes. Excluding this $5.9 million benefit, the overall income tax rate in the first quarter of 2017 was 36.3%.
Earnings Per Share
The calculation of diluted earnings per share for the first quarter of 2017 was based on 5,568,903 weighted average shares outstanding, compared to 5,651,655 for the first quarter of 2016. At March 31, 2017, there were 5,590,529 shares outstanding. On May 14, 2015, the Board of Directors authorized the Company to acquire up to 500,000 shares of its Class B common stock; the Company has remaining authorization for 223,526 shares as of March 31, 2017.
This press release contains certain forward-looking statements that are based largely on the Company’s current expectations. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results and achievements to differ materially from those expressed in the forward-looking statements. For more information about these forward-looking statements and related risks, please refer to the section titled “Forward-Looking Statements” in Part I of the Company’s Annual Report on Form 10-K.