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Income Taxes
6 Months Ended
Jun. 30, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

We recorded income tax expense at an effective rate of 36.5% for the three months ended June 30, 2017, as compared to an effective rate of 37.8% for the three months ended June 30, 2016. The 2017 rate was favorably impacted by the release of certain valuation allowances reflecting the expected realization of deferred tax assets due to sustained profitability. The 36.5% effective tax rate in the quarter was higher than the United States Federal statutory rate of 35% due primarily to the French business tax, expected repatriations, valuation allowances and other permanent items.

We recorded income tax expense at an effective rate of 35.4% for the six months ended June 30, 2017, as compared to an effective rate of 38.6% for the six months ended June 30, 2016. The 2017 rate was favorably impacted by the adoption of the new accounting guidance for share-based payments effective January 1, 2017 (see Note 3 to the Consolidated Financial Statements for further information), the tax benefit related to the favorable settlement of an audit and the release of certain valuation allowances. We currently expect an annual effective tax rate of approximately 36% to 37% as these benefits will partly offset the impact of the French business tax, expected repatriations, valuation allowances and other permanent items for the year.

As of June 30, 2017, we had gross unrecognized tax benefits related to various tax jurisdictions, including interest and penalties, of $38.1 that would favorably affect the effective tax rate if recognized. As of December 31, 2016, we had gross unrecognized tax benefits related to various tax jurisdictions, including interest and penalties, of $44.0. The reduction in this amount is the result of the settlement of the audit noted above resulting in the recognition of tax benefits claimed in the years subject to examination. We do not expect our unrecognized tax benefits to change significantly over the next 12 months.
 
We conduct business globally in various countries and territories. We are routinely audited by the tax authorities of the various tax jurisdictions in which we operate. Generally, the tax years that could be subject to examination are 2009 through 2016 for our major operations in France, Germany, Japan, the United Kingdom and the United States. As of June 30, 2017, we were subject to tax audits in Austria, Canada, Denmark, Germany, Italy, Portugal and the United States. We believe that the resolution of these audits will not have a material impact on earnings.