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

Note 15—Income Taxes

 

The provision for income taxes for the third quarter and the first nine months of 2013 was at an effective rate of 23.9%.  The provision for income taxes for the third quarter and the first nine months of 2012 was at an effective rate of 26.8%.  The lower effective rate in the third quarter and first nine months of 2013 included a tax benefit of $3,645, or $.02 per diluted common share, resulting primarily from the completion of prior audits.  The lower rate in the first nine months of 2013 included the third quarter tax benefit of $3,645 as well as a first quarter tax benefit of $11,300, or $.07 per diluted common share, resulting from the delay by the U.S. government in the reinstatement of certain federal income tax provisions for the year 2012 within the American Taxpayer Relief Act relating primarily to research and development credits and certain U.S. taxes on foreign income.  Such tax provisions were reinstated on January 2, 2013 with retroactive effect to 2012.  Excluding the effect of these benefits as well as the net impact of acquisition-related expenses, the effective tax rate in the third quarter and the first nine months of 2013 was 25.5% and 26.3%, respectively.

 

The Company is present in over sixty tax jurisdictions, and at any point in time has numerous audits underway at various stages of completion. With few exceptions, the Company is subject to income tax examinations by tax authorities for the years 2010 and after.  The Company is generally not able to precisely estimate the ultimate settlement amounts or timing until the close of an audit. The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by local authorities and may not be fully sustained, despite the Company’s belief that the underlying tax positions are fully supportable. As of September 30, 2013, the amount of the liability for unrecognized tax benefits, which if recognized would impact the effective tax rate, was approximately $13,109, the majority of which is included in other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets.  Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including progress of tax audits and the closing of statutes of limitation. Based on information currently available, management anticipates that over the next twelve month period, audit activity could be completed and statutes of limitation may close relating to existing unrecognized tax benefits of approximately $2,221.