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INCOME TAXES
3 Months Ended
Mar. 31, 2013
INCOME TAXES

9. INCOME TAXES

The overall effective income tax rate was 30.0% and 34.4% for the three months ended March 31, 2013 and 2012, respectively. The decrease in the effective tax rate is primarily due to retroactive extension of the R&D tax credit and an increase in foreign income.

As of March 31, 2013, the liability for income taxes associated with uncertain tax positions is $12.4 million, of which $4.8 million, if recognized would favorably affect the Company’s effective tax rate. As of December 31, 2012 the liability associated with uncertain tax positions was $11.3 million, of which $3.7 million, if recognized, would favorably affect the Company’s effective tax rate.

The Company includes interest and penalties related to uncertain tax positions in income tax expense. As of March 31, 2013 the total accrued interest and penalties are $2.7 million and $1.5 million, respectively. As of December 31, 2012 the total accrued interest and penalties were $2.5 million and $1.4 million, respectively.

At this time, the Company believes that it is reasonably possible that unrecognized tax benefits of approximately $3.1 million may change within the next 12 months due to the expiration of statutory review periods and current examinations. The Internal Revenue Service is currently auditing the 2009 and 2010 tax years. With limited exception, the Company is no longer subject to examination by various U.S. and foreign taxing authorities for years before 2009.