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Income Taxes
9 Months Ended
Sep. 30, 2012
Income Tax Disclosure [Abstract]  
Income Taxes
Note 9. Income Taxes
The Company’s effective income tax rate for the third quarter and first nine months of 2012 was 24.5% and 28.4%, respectively. The Company’s effective income tax rate for the third quarter and first nine months of 2011 was 30.9% and 33.5%, respectively. The decrease in the effective tax rates in 2012 from 2011, reflected a remeasurement of uncertain tax positions for the third quarter and first nine months of 2012, as well as a change in the proportion of domestic and international income. The third quarter and first nine months of 2012 included tax benefits of $3.1 million and $4.3 million, respectively, related to the remeasurement of uncertain tax positions, including an expiration of the statute of limitations in the U.S. The third quarter and first nine months of 2011 included tax benefits of $2.4 million related to the remeasurement of uncertain tax positions, including an expiration of the statute of limitations in the U.S. Excluding the impact of the remeasurements, the effective tax rate would have been 30.0% for the third quarter of 2012 and 31.0% for the first nine months of 2012. Excluding the impact of the remeasurements, the effective tax rate would have been 35.4% for the third quarter of 2011 and 35.0% for the first nine months of 2011.
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 anticipates the total unrecognized tax benefit for various federal and state tax items may be reduced by $12.4 million due to the expiration of statutes of limitation and settlements with tax authorities for various federal, state and Canadian tax issues in the next 12 months.
The Company’s intention is to permanently reinvest the earnings of its material foreign subsidiaries, thus indefinitely postponing their remittance of any earnings to the United States.