Income Taxes

9 Months Ended

Sep. 30, 2013

Income Taxes

Income Taxes

Note 5.  Income Taxes

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. The following table presents the principal reasons for the difference between the Company’s effective income tax rate and the U.S. federal statutory income tax rate:

	Three Months Ended September 30,
	2013		2013			2012		2012
U.S. federal statutory income tax rate	35.0	%	$	4.8		35.0	%	$	4.5
U.S. state income taxes, net of federal income tax benefit	3.6	%	0.5			2.3	%	0.3
Foreign tax rate differences (a)	(1.5	)%	(0.2		)	(1.7	)%	(0.2		)
Foreign financing structure (b)	(1.5	)%	(0.2		)	(4.7	)%	(0.6		)
Tax on foreign dividends	4.3	%	0.6			—	%	—
Research and development tax credits	(13.8	)%	(1.9		)	—	%	—
Uncertain tax positions	0.7	%	0.1			—	%	—
Other differences — net	(9.4	)%	(1.3		)	(1.7	)%	(0.2		)
Effective income tax rate	17.4	%	$	2.4		29.2	%	$	3.8

	Nine Months Ended September 30,
	2013		2013			2012		2012
U.S. federal statutory income tax rate	35.0	%	$	18.5		35.0	%	$	15.4
U.S. state income taxes, net of federal income tax benefit	2.3	%	1.2			1.8	%	0.8
Foreign tax rate differences (a)	(2.5	)%	(1.3		)	(3.2	)%	(1.4		)
Foreign financing structure (b)	(3.6	)%	(1.9		)	(4.1	)%	(1.8		)
Tax on foreign dividends	3.0	%	1.6			—	%	—
Research and development tax credits	(3.6	)%	(1.9		)	—	%	—
Uncertain tax positions	1.3	%	0.7			(0.2	)%	(0.1		)
Other differences — net	(0.5	)%	(0.3		)	0.9	%	0.4
Effective income tax rate	31.4	%	$	16.6		30.2	%	$	13.3

(a) Represents the impact on the Company’s effective tax rate due to changes in the mix of earnings among taxing jurisdictions with differing statutory rates.

(b) Represents the impact on the Company’s effective tax rate of the Company’s financing strategies.

The Company’s effective income tax rate can be affected by many factors, including but not limited to, changes in the mix of earnings in taxing jurisdictions with differing statutory rates, changes in corporate structure as a result of business acquisitions and dispositions, changes in the timing and amounts of dividends repatriated from foreign subsidiaries, changes in the valuation of deferred tax assets and liabilities, the results of audit examinations of previously filed tax returns and changes in tax laws.