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Income Taxes
3 Months Ended
Mar. 31, 2013
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The income tax provision is calculated using an estimated annual effective tax rate, based upon expected annual income, permanent items, statutory rates and planned tax strategies in the various jurisdictions in which the Company operates. However, losses in certain jurisdictions and discrete items, such as the resolution of uncertain tax positions, are treated separately.
The Company’s effective income tax rate for the first quarter of 2013 was 24.9% compared with 30.3% for the first quarter of 2012. The decrease in the effective tax rate in 2013 from 2012, reflected net tax benefits for discrete items of $2.7 million, compared with net tax benefits for discrete items of $1.1 million for the first quarter of 2012. The net tax benefits in 2013 primarily relate to the retroactive reinstatement of certain tax benefits and credits from the enactment of the American Taxpayer Relief Act of 2012 signed into law on January 2, 2013. Excluding the net tax benefits in both periods, the effective tax rates would have been 30.0% for the first quarter of 2013 and 32.5% for the first quarter of 2012.
The Company has substantially concluded on all U.S. federal income tax matters for all years through 2008, California income tax matters for all years through 2006 and Canadian income tax matters for all years through 2003. The Company is currently under audit in Canada for tax periods 2006 through 2011 and in California for tax years 2007 through 2009. The Company does not believe that the resolution of any of the audits will have a material adverse effect on the Company’s results of operations. Substantially all other material state, local and foreign income tax matters have been concluded for years through 2006.
The Company’s intention is to indefinitely reinvest the earnings of its material foreign subsidiaries.