9. Income Taxes

The effective income tax rate, which is provision for (benefit from) income taxes as a percentage of income (loss) before provision for (benefit from) income taxes and equity income, differs from the amount determined by applying the applicable U.S. statutory federal income tax rate to pretax results primarily as a result of the following:


	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Statutory provision rate		35.0	%		35.0	%		35.0	%		35.0	%
Permanent differences and other items
State tax provision		(5.4	%)		4.0	%		19.2	%		1.2	%
Section 199 manufacturing credit		5.0	%		(1.7	%)		(16.4	%)		(0.5	%)
Return to provision adjustments / Uncertain tax positions		0.6	%		3.1	%		(2.5	%)		(69.0	%)
Non-deductible non-cash compensation		(92.0	%)		(36.2	%)		169.1	%		838.2	%
Other		(1.3	%)		0.4	%		2.0	%		(9.0	%)

Effective income tax rate		(58.1	%)		4.6	%		206.4	%		795.9	%

The “Non-deductible non-cash compensation” expense as described further in note 14, “Profits Interest Awards,” is not deductible in the Company’s tax returns and has been reflected as a permanent difference in the effective tax rate reconciliations above.

As of June 30, 2013 and December 31, 2012, the Company had $27,314 and $27,401 respectively, of unrecognized tax benefits, none of which would impact the effective tax rate, if recognized. Estimated interest and penalties related to the underpayment of income taxes were $16 and $15 for the three and six months ended June 30, 2013, respectively, and were reduced by $179 and $160 for the three and six months ended June 30, 2012, respectively, and are classified as a component of income tax expense in the accompanying consolidated statements of operations. Accrued interest and penalties as of June 30, 2013 and December 31, 2012 were $51 and $35, respectively, inclusive of the estimated interest and penalties mentioned above. The Company’s liability for uncertain tax positions of $27,365 and $27,436 at June 30, 2013 and December 31, 2012, respectively, are presented in other noncurrent liabilities.

The Company is subject to income taxation in several jurisdictions around the world. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income tax in the period such resolution occurs. Although timing of the resolution and/or closure of audits is not certain, the Company believes it has adequately reserved for any potential tax exposures at June 30, 2013. The Internal Revenue Service completed its examination of the Corporation’s income tax returns through the period ended December 31, 2010. The Company’s U.S. federal returns for the period ended December 31, 2011 and all subsequent periods remain open for audit. The majority of state returns for the period ended September 30, 2010 and all subsequent periods remain open for audit.