Income Taxes

Effective Tax Rates

The Company's effective tax rates are as follows:



	2015	2014
Three months ended March 31,	32.7%	31.9%

The Company’s effective tax rate for the three months ended March 31, 2015 is higher than the prior year’s comparable period primarily due to the unfavorable impacts of recently-enacted Japanese tax reform on certain tax carryforwards and a lower U.S. federal tax benefit on domestic manufacturing activities, partially offset by the favorable impacts of income earned in jurisdictions with lower statutory tax rates and a lower amount of statutorily non-deductible expenses.

The Company's effective tax rate for the three months ended March 31, 2015 is lower than the statutory U.S. federal tax rate of 35% primarily due to the favorable impacts of income earned in jurisdictions with tax rates lower than the U.S. statutory rate and the U.S. federal tax benefit for domestic manufacturing activities, partially offset by the unfavorable impacts of U.S. state taxes and certain expenses that are statutorily non-deductible for income tax purposes.

Unrecognized Tax Benefits

During the three months ended March 31, 2015, the Company's gross unrecognized tax benefits, excluding interest and penalties, decreased by $0.1 million primarily as a result of tax positions taken in both the current and prior periods. During the three months ended March 31, 2015, the total amount of unrecognized tax benefits that, if recognized, would affect the Company's effective tax rate decreased by less than $0.1 million.

The Company recognizes interest and penalties related to unrecognized tax benefits as a component of its income tax expense. During the three months ended March 31, 2015, the Company recognized $0.3 million of interest and penalty expense related to unrecognized tax benefits in its condensed consolidated statement of operations. At March 31, 2015 and December 31, 2014, the total amount of accrued interest and penalty expense related to unrecognized tax benefits recorded in the Company’s condensed consolidated balance sheets was $5.0 million and $4.7 million, respectively.

During the next twelve months, it is reasonably possible that the Company's unrecognized tax benefits may decrease by $4.6 million due to settlements of income tax examinations, the expiration of statutes of limitations or other resolution of uncertainties. However, if the ultimate resolution of income tax examinations results in amounts that differ from this estimate, the Company will record additional income tax expense or benefit in the period in which such matters are effectively settled.

Income Tax Examinations

The Company's income tax returns are subject to examination by the U.S. federal, U.S. state and local, and non-U.S. tax authorities.

The Company’s federal income tax returns for the years 2010 through 2012 are currently under examination by the U.S. Internal Revenue Service, and its federal income tax return for 2013 remains subject to examination. In addition, acquired subsidiaries’ federal income tax returns (2011 through 2013) and federal tax carry forwards (2006 through 2013) remain subject to examination.

With few exceptions, the Company is no longer subject to U.S. state and local or non-U.S. income tax examinations for years before 2009. Currently, the Company and its subsidiaries are under examination in various jurisdictions, including Germany (2006 through 2012).