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Income Taxes
9 Months Ended
Sep. 30, 2013
Income Taxes  
Income Taxes

13. Income Taxes

 

The effective tax rate for the quarter ended September 30, 2013 was 31.5% compared to 4.2% for the quarter ended September 30, 2012.  The 2013 rate was impacted by benefits related to the release of uncertain tax positions due statute expirations and by permanent deductions.  The 2012 rate was impacted by a loss before income tax (benefit) provision and a valuation allowance recorded as the result of the Company’s decision to permanently close its Datong, China manufacturing facility (Refer to Note 1).  The effective tax rate for the nine months ended September 30, 2013 was 32.3% compared to 39.3% for the nine months ended September 30, 2012 The decrease in the nine months ended September 30, 2013 effective tax rate from the nine months ended September 30, 2012 effective tax rate was primarily due to net tax impacts from the 2012 closure of the Company’s Datong facility and related valuation allowance as well as the March 2013 sale of the facility.  Excluding the impact of Datong, the effective tax rate for the nine months ended September 30, 2013 was 33.7% as compared to 33.0% for the nine months ended September 30, 2012.

 

Unrecognized Income Tax Benefits

 

As of September 30, 2013 and December 31, 2012, the Company’s gross unrecognized income tax benefits were $3.9 million and $4.1 million, respectively.  If recognized, $2.8 million and $3.0 million of the gross unrecognized tax benefits would affect the effective tax rate at September 30, 2013 and December 31, 2012, respectively.  At this time, the Company believes that it is reasonably possible that approximately $0.1 million of the estimated unrecognized tax benefits as of September 30, 2013, will be recognized within the next twelve months based on the expiration of statutory periods all of which will impact the Company’s effective tax rate.