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Income Taxes
9 Months Ended
Sep. 30, 2016
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

The effective income tax rate for income taxes as a percentage of income from continuing operations before equity in earnings of affiliates and income taxes was 31.0% and 46.4% for the three months ended September 30, 2016 and 2015, respectively, and 33.5% and 37.4% for the nine months ended September 30, 2016 and 2015, respectively.

For the three months ended September 30, 2016, when compared to 2015, the decrease in the effective income tax rate was primarily attributable to current year favorable rate reductions related to foreign tax rate differentials, permanent enactment of the federal research credit subsequent to September 30, 2015 and a reduction in the contingent consideration recorded in connection with the acquisition of FNC. The prior year rate was unfavorably impacted by unbenefited foreign losses in tax jurisdictions with tax rates lower than the U.S. and a decrease in foreign tax credits.

For the nine months ended September 30, 2016, when compared to 2015, the decrease in the effective income tax rate was due to current year favorable rate reductions related to foreign tax rate differentials, permanent enactment of the federal research credit subsequent to September 30, 2015 and a reduction in the contingent consideration recorded in connection with the acquisition of FNC. The current year favorable rate reductions were partially offset by prior year non-recurring favorable discrete items related to release of a foreign valuation allowance and a reduction in foreign uncertain tax benefits due to statute of limitations expiration.

Income taxes included in equity in earnings of affiliates were $0.5 million and $2.3 million for the three months ended September 30, 2016 and 2015, respectively, and $0.9 million and $7.8 million for the nine months ended September 30, 2016 and 2015, respectively. For the purpose of segment reporting, these amounts are included in corporate and therefore not reflected in our reportable segments.

We are currently under examination for the years 2005 to 2011 by the U.S. federal and various state taxing authorities. It is reasonably possible the amount of unrecognized tax benefit with respect to certain unrecognized tax positions could significantly increase or decrease within the next twelve months. We estimate the unrecognized tax benefit could decrease by up to $21.5 million within the next twelve months. The estimated change is primarily related to IRS audits, subject to the FAFC indemnification, and may have minimal impact to net income. See Note 12 - Litigation and Regulatory Contingencies for further discussion on FAFC.