7. Income taxes

The following table reconciles our tax provision before discrete charges and benefits to our recorded tax provision for the three and nine months ended September 30, 2011 and 2010 (in millions):


	Three months ended September 30,						Nine months ended September 30,
	2011			2010			2011			2010
Provision for (benefit from) income taxes before discrete items	$	1.4		$	1.7		$	4.3		$	0.2
Provision related to tax shortfalls recorded pursuant to ASC 718-740, Stock Compensation – Income Taxes		—			0.7			—			3.4
Provision related to gain on sale of minority investment in a privately held company		1.1			—			1.1			—
Interest related to unrecognized tax benefits		0.1			0.1			0.4			0.4
Tax benefit related to restructuring and other expense		(0.3	)		(0.2	)		(0.9	)		(1.1	)
Tax benefit related to acquisition expenses		(0.1	)		—			(0.5	)		—
Tax benefit related to asset impairment charges		—			—			—			(0.3	)
Tax benefit related to excess solvent inventories and related end-of-life purchases		—			—			—			(0.4	)
Tax deductions related to ESPP dispositions		(0.1	)		(0.2	)		(0.5	)		(0.5	)
Tax benefit related to reassessment of tax exposure related to filing of prior year tax returns		(0.7	)		(2.1	)		(0.7	)		(2.1	)
Tax benefit related to reversals of uncertain tax positions due to statute of limitation expirations		—			(7.3	)		—			(7.3	)
Tax benefit related to reversals of accrued interest related to uncertain tax positions		—			(1.1	)		—			(1.1	)


Provision for (benefit from) income taxes	$	1.4		$	(8.4	)	$	3.2		$	(8.8	)

Without the discrete charges and benefits described above, the decrease in the tax provision for the three months ended September 30, 2011, compared with the same period in the prior year, is due primarily to increased tax benefits related to permanently reinvested foreign earnings. The increase in the tax provision for the nine months ended September 30, 2011, compared with the same period in the prior year, is due primarily to increased profitability before income taxes.

Primary differences in 2011 and 2010 between our recorded tax provision rate and the U.S. statutory rate of 35% include tax benefits related to credits for research and development costs in 2011, lower taxes on permanently reinvested foreign earnings in 2011, and the tax effects of stock-based compensation expense recorded in both years pursuant to ASC 718-740, which are non-deductible for tax purposes.

As of September 30, 2011 and December 31, 2010, unrecognized tax benefits were $37.1 million and $32.5 million, respectively, which would affect the effective tax rate, if recognized. Over the next twelve months, our existing tax positions will continue to generate an increase in liabilities for unrecognized tax benefits. It is reasonably possible that our unrecognized tax benefits will decrease up to $7.5 million in the next twelve months. These adjustments, if recognized, would positively impact our effective tax rate, and would be recognized as additional tax benefits in our income statement. The reduction in unrecognized tax benefits relates primarily to a lapse of the statute of limitations for federal and state tax purposes.

We recognize potential accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of September 30, 2011 and December 31, 2010, we have accrued $1.7 and $1.3 million, respectively, for potential payments of interest and penalties.

As of September 30, 2011 and December 31, 2010, we were subject to examination by the Internal Revenue Service for the 2007-2010 tax years, state tax jurisdictions for the 2006-2010 tax years, and the Netherlands tax authority for the 2008-2010 tax years.