INCOME TAXES

3 Months Ended

Mar. 31, 2012

INCOME TAXES [Abstract]

INCOME TAXES

INCOME TAXES

The following table accounts for the difference between the actual tax provision and the amounts obtained by applying the statutory U.S. federal income tax rate of 35% to income before taxes.

	Three Months Ended March 31,
Effective Tax Rate Reconciliation (Percent)	2012			2011
Statutory federal tax rate		35.0	%		35.0	%
Foreign rate differential		(0.1	)		-
Domestic manufacturing/export tax incentive		(1.0	)		(0.3	)
Dividends paid to CEOP		(0.4	)		(0.1	)
State income taxes, net		1.4			0.5
Remeasurement of deferred taxes		0.6			(1.5	)
Incremental tax effect of SunBelt remeasurement		-			5.7
Other, net		0.5			(0.1	)
Effective tax rate		36.0	%		39.2	%

The effective tax rate for the three months ended March 31, 2011 included a benefit of $3.4 million related to remeasurement of deferred taxes due to an increase in state tax effective rates and included a deferred tax expense of $76.0 million related to the tax effect of our gain on the remeasurement of our previously held 50% equity interest in SunBelt.

As of March 31, 2012, we had $38.0 million of gross unrecognized tax benefits, which would have a net $36.2 million impact on the effective tax rate, if recognized.  As of March 31, 2011, we had $41.5 million of gross unrecognized tax benefits, of which $39.4 million would have impacted the effective tax rate, if recognized.  The amount of unrecognized tax benefits was as follows:

	March 31,
	2012		2011
	($ in millions)
Balance at beginning of year	$	37.9	$	41.5
Increases for current year tax positions		0.1		-
Balance at end of period	$	38.0	$	41.5

As of March 31, 2012, we believe it is reasonably possible that our total amount of unrecognized tax benefits will decrease by approximately $1.1 million over the next twelve months.  The anticipated reduction primarily relates to settlements with taxing authorities and the expiration of federal, state and foreign statutes of limitation.

We operate primarily in North America and file income tax returns in numerous jurisdictions.  Our tax returns are subject to examination by various federal, state and local tax authorities.  We believe we have adequately provided for all tax positions; however, amounts asserted by taxing authorities could be greater than our accrued position.  For our primary tax jurisdictions, the tax years that remain subject to examination are as follows:

	Tax Years
U.S. federal income tax	2007 - 2010
U.S. state income tax	2004 - 2010
Canadian federal income tax	2007 - 2010
Canadian provincial income tax	2007 - 2010