Income Taxes

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

In the third quarter of 2013, the Company recorded a discrete tax charge of $40 million related to the tax treatment of intercompany financing transactions that impact the taxability of foreign earnings. The components of the effective tax rate for the third quarter and year-to-date periods ended September 30, 2013 and 2012 were as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Tax rate based on estimated annual effective tax rate	29.0	%	27.8	%	28.8	%	28.3	%
Discrete tax adjustment	6.4	%	—	%	2.3	%	—	%
Effective tax rate	35.4	%	27.8	%	31.1	%	28.3	%

The Company and its subsidiaries file tax returns in the U.S. and various state, local and foreign jurisdictions. These tax returns are routinely audited by the tax authorities in these jurisdictions including the Internal Revenue Service, Her Majesty's Revenue and Customs, German Fiscal Authority, French Fiscal Authority, and Australian Tax Office and a number of these audits are currently ongoing, which may increase the amount of the unrecognized tax benefits in future periods. Due to the ongoing audits, the Company believes it is reasonably possible that within the next twelve months the amount of the Company’s unrecognized tax benefits may be decreased by approximately $21 million related predominantly to various intercompany transactions. The Company has recorded its best estimate of the potential exposure for these issues.