13.

Income Taxes

For the three months ended September 30, 2012, the Company recorded income tax expense of $40,004 (effective rate of 31.0 percent) as compared to $17,003 (effective rate of 23.0 percent) for the comparable period in 2011. For the nine-month period ended September 30, 2012, the Company recorded income tax expense of $81,650 (effective rate of 31.7 percent) as compared to $29,083 (effective rate of 23.3 percent) for the comparable period in 2011. The three and nine-month period income tax expense is calculated using the forecasted multi-jurisdictional annual effective tax rates to determine a blended annual effective tax rate. This rate differs from the U.S. federal statutory rate of 35 percent primarily because of the projected mix of earnings in international jurisdictions with lower tax rates, partially offset by losses in jurisdictions with no tax benefit due to valuation allowances. The effective income tax rate for the three months ended September 30, 2011 differs from the three month period ended September 30, 2012 due to the U.S. valuation allowance that was released at December 31, 2011, and certain tax holidays in the Peoples Republic of China (“PRC”) in effect at that time. In addition, the three and nine-month period income tax expense is higher primarily due to increased pretax earnings. Tax expense for the three and nine-month periods ended September 30, 2012 included a discrete tax expense of $1,937 and $2,056, respectively, primarily related to the unfavorable impact on deferred tax assets from a U.K. statutory tax rate reduction enacted during the period. For the three and nine-month periods ended September 30, 2011, income tax expense included a discrete tax expense of $8,052 and $9,486, respectively. This primarily includes recording of valuation allowance adjustments for U. S. return to provision timing differences and the unfavorable impact on deferred tax assets from a U.K. statutory tax rate reduction.

The Company continues to maintain a valuation allowance pursuant to ASC 740, “Accounting for Income Taxes,” against a portion of its U.S. and non-U.S. deferred tax asset position, as it cannot assure the utilization of these assets before they expire. In the U.S., the Company has offset a portion of its deferred tax asset relating primarily to a capital loss carryforward by a valuation allowance of $19,838. In addition, the Company has recorded valuation allowances of $9,727 relating to non-U.S. net operating losses of $8,131 and foreign tax credits of $1,596 for a total valuation allowance of $29,564. In conjunction with the Company’s ongoing review of its actual results and anticipated future earnings, the Company will continue to reassess the possibility of releasing all or part of the valuation allowances currently in place when they are deemed to be realizable.

The Company maintains an ASC 740-10, “Accounting for Uncertainty in Income Taxes,” liability for unrecognized tax benefits for permanent and temporary book/tax differences. At September 30, 2012, the Company’s liability, exclusive of interest, totals approximately $984. The Company accrued an immaterial amount of interest expense related to these unrecognized tax benefits during the quarter.

The Company and its subsidiaries are subject to income tax examination in the U.S. federal jurisdiction and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and foreign tax examinations by income and franchise tax authorities for years prior to 2007.