8.	Income Taxes

The effective income tax rates for the three months ended September 30, 2013 and 2012 were 23.2% and 27.3%, respectively. The effective income tax rates for the nine months ended September 30, 2013 and 2012 were 22.8% and 24.7%, respectively.

The effective tax rate for the three months ended September 30, 2013 was less than the U.S. federal statutory rate primarily due to foreign income taxed at lower rates and implementation of a tax planning strategy to utilize net operating losses for which a benefit was not recorded in prior periods, that reduced income tax expense by $4.2 million. The effective tax rate for the nine months ended September 30, 2013 was less than the U.S. federal statutory rate due to a reduction in unrecognized tax benefits of $5.9 million, which was primarily due to our participation in a tax amnesty program, a second quarter election made by one of our subsidiaries under a new tax law that allowed it to increase the value of its assets resulting in a $4.7 million reduction to income tax expense and the aforementioned third quarter items.

The effective tax rate for the three month period ended September 30, 2012 was less than the U.S. federal statutory rate primarily due to foreign income taxed at lower rates. The effective tax rate for the nine month period ended September 30, 2012 was less than the U.S. federal statutory rate primarily due to foreign income taxed at lower rates, the receipt of non-taxable indemnification income from Pernod Ricard S.A (“Pernod Ricard”) (as discussed below), and a combined $6 million tax benefit resulting from a final foreign audit settlement and the expiration of foreign jurisdiction income tax review periods (as discussed below), partially offset by additional tax recorded on the distribution of earnings between certain foreign jurisdictions.

During the second quarter of 2012, the Spanish Supreme Court issued a judgment in connection with disputed income taxes in the amount of approximately $20 million against our Spanish subsidiaries, which include the assets acquired from Pernod Ricard in July 2005. We paid the assessment to the Spanish tax authorities in May 2012. Pursuant to the acquisition agreement, Pernod Ricard indemnified us for pre-acquisition income tax contingencies and liabilities, and we negotiated and received a reimbursement of approximately $18 million from Pernod Ricard. This non-taxable indemnification payment received from Pernod Ricard related to this judgment was recorded as other income in 2012.

It is reasonably possible that, within the next 12 months, total unrecognized tax benefits may decrease in the range of $7 million to $12 million, primarily as a result of the conclusion of U.S. federal, state and foreign income tax proceedings.