Income Taxes

9 Months Ended

Sep. 30, 2012

Income Taxes

Income Taxes

11.   Income Taxes

        Our income tax provision for the three months ended September 30, 2012 was $206.0 million on pre-tax income of $640.2 million, or an effective tax rate of 32.2%, compared to an income tax provision of $184.9 million on pre-tax income of $550.6 million, or an effective tax rate of 33.6%, for the three months ended September 30, 2011. The effective tax rate for the third quarter of 2012 based on pre-tax income exclusive of earnings attributable to noncontrolling interest was 35.2% compared to 37.1% in the third quarter of 2011. The decline in the effective tax rate exclusive of earnings attributable to noncontrolling interests was driven primarily by higher state taxes in the prior year. The effective tax rate based on pre-tax income differs from our effective tax rate based on pre-tax income exclusive of earnings attributable to noncontrolling interest, as our consolidated income tax provision does not include tax provisions on the earnings attributable to noncontrolling interests in TNCLP and CFL, which record no income tax provisions.

        Our unrecognized tax benefits decreased by $23.5 million during the three months ended September 30, 2012 to $114.4 million as the result of tax return positions taken in the period. Our effective tax rate would be reduced if $48.2 million of these unrecognized tax benefits were to be recognized in the future.

        For additional information concerning the income tax matters noted above, see Note 13—Income Taxes, to our audited consolidated financial statements included in our 2011 Annual Report on Form 10-K filed with the SEC on February 27, 2012.