Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes [Abstract]

Income Taxes

Income Taxes—The Company had an effective tax rate of 25.4% and 12.7% on earnings before tax for the three and nine month periods ended September 30, 2011 compared to an expected rate at the US statutory rate of 35%. The Company's effective tax rate for the three and nine months ended September 30, 2011 was lower than the U.S. federal statutory rate, principally due to foreign taxes recognized at rates below the U.S. statutory rate including a second quarter $5,100,000 ($0.16 per share) tax benefit as a result of a tax settlement in Germany as the German government agreed to follow a European Court of Justice case and a German Tax Court case that impacted an open tax return year. The Company also benefitted year to date from countries with valuation allowances included in the combined effective rate due to expected taxes. The Company had an effective tax rate of 25.4% and 36.8% on earnings before tax for the three and nine month periods ended September 30, 2010, respectively, compared to an expected rate at the U.S. statutory rate of 35%. The Company's effective tax rate for the three months ended September 30, 2010 was lower than the U.S. federal statutory rate as a result of foreign earnings taxed at an effective rate lower than the US statutory rate, and a net profit for the quarter related to countries with tax valuation allowances. The Company's effective tax rate for the nine month period ended September 30, 2010 was higher than the US statutory rate due to the negative impact of the Company not being able to record tax benefits related to losses in countries which had tax valuation allowances for the year, more than offsetting the benefit of foreign taxes at rates below the US statutory rate. The Company continued to be in a three-year cumulative loss position in the U.S. principally as a result of recording pre-tax expenses of $7,462,000 and $24,198,000 for the three and nine months ended September 30, 2011, respectively, related to the extinguishment of convertible debt at a premium. As a result of the loss position, the majority of the U.S. deferred tax assets continue to be subject to a valuation allowance.