14.

Income Taxes

For the quarter ended June 30, 2014, the Company recorded income tax expense of $25,786 (effective rate of 36.6 percent) compared with $19,642 (effective rate of 32.1 percent) for the comparable period in 2013. For the six-month period ended June 30, 2014, the Company recorded income tax expense of $48,353 (effective rate of 33.4 percent) compared with $47,259 (effective rate of 31.2 percent) for the comparable period in 2013. The 2014 quarter and six-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. Income tax expense for the current quarter is higher due primarily to increased earnings in both the U.S. and non-U.S. jurisdictions, as well as increased losses in jurisdictions with no tax benefit due to valuation allowances, compared with the same quarter of the prior year. Income tax expense for the six-month period is higher due primarily to increased losses in jurisdictions with no benefit due to valuation allowances compared with the same period in the prior year.

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 $22,072. In addition, the Company has recorded valuation allowances of $10,174 relating to non-U.S. net operating losses for a total valuation allowance of $32,246. 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 June 30, 2014, the Company’s liability, exclusive of interest, totals approximately $5,878. 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.