Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes [Abstract]

Income Taxes

16. Income Taxes

Our effective tax rate for the three and nine months ended September 30, 2011 was 25.0% and (8.2)%, respectively, compared to (22.4)% and 32.3%, respectively, for the three and nine months ended September 30, 2010. In the third quarter of 2011, we recorded gains related to the sale of our investment in two Malaysian subsidiaries that were taxed at a lower rate than the U.S. statutory rate of 35%. In addition, in 2011 we incurred losses in tax jurisdictions that could not be benefitted and booked a valuation allowance related to certain foreign tax credit carryforwards.

For 2010, the goodwill impairment recognized in Latin America, where the effective tax rate is lower than the corporate tax rate in the United States of 35%, could not be tax benefitted. In addition, losses were incurred in jurisdictions with effective tax rates of 35% that could be fully tax benefited while income was earned in jurisdictions with low tax rates. This mix of losses in higher tax jurisdictions offset by income in low tax jurisdictions and the goodwill impairment resulted in a lower year to date effective tax rate when compared to the corporate tax rate in the United States of 35%. The change in effective tax rate from 58.2% for the six months ended June 30, 2010 to 32.3% for the nine months ended September 30, 2010 resulted in a cumulative tax adjustment of $12.4 million which increased the net loss for the third quarter of 2010.