Income Taxes

6 Months Ended

Jun. 30, 2015

(9) Income Taxes

The following table summarizes the differences between our effective tax rate for financial statement purposes and the Federal statutory rate.

		Six months ended June 30,						Three months ended June 30,
		2015			2014			2015			2014

Statutory tax rate			35.0	%		35.0	%		35.0	%		35.0	%

Federal tax at statutory rate		$	92,885		$	102,415		$	40,095		$	48,175
Nontaxable municipal bond interest and dividend received
	deduction		(16,641)			(17,783)			(6,889)			(8,856)
State income taxes, net of federal tax benefit			1,439			1,650			722			816
Foreign income taxes			15,962			15,866			6,011			8,640
Foreign tax credit			(15,628)			(15,866)			(5,852)			(8,640)
Indefinitely reinvested earnings of foreign subsidiaries			(9,134)			-			-			-
Uncertain tax positions (net of federal tax benefit on state
	positions: $71 in 2015 and $183 in 2014)		2,178			452			(56)			132
Other, net			990			835			109			241
	Income tax expense	$	72,051		$	87,569		$	34,140		$	40,508
Effective tax rate			27.1	%		29.9	%		29.8	%		29.4	%

Effective in the first quarter of 2015, we made an initial assertion that we would indefinitely reinvest the cumulative undistributed earnings of certain foreign subsidiaries primarily organized in the U.K. and Spain, which have statutory tax rates of 20.0% and 28.0%, respectively. We do not provide deferred tax liabilities on these undistributed earnings as they are essentially permanent in duration. For other foreign subsidiaries, we provide U.S. taxes on undistributed earnings at the U.S. statutory rate of 35%, offset by an adjustment for foreign tax credits, when required. We made no similar assertion in 2014 or in any periods previously reported, and we previously provided U.S. taxes on all undistributed earnings of our foreign subsidiaries at the U.S. statutory rate of 35%, offset by an adjustment for foreign tax credits, when required.

We continued to assert indefinite reversal of the undistributed earnings of these certain U.K. and Spain foreign subsidiaries in the second quarter of 2015. Our 2015 assertion generated a tax benefit of $9.1 million, which included $5.9 million on cumulative undistributed foreign earnings through December 31, 2014 and $3.2 million on undistributed foreign earnings recorded in the first six months of 2015. Our assertion excluded undistributed foreign earnings that previously have been taxed as deemed dividend inclusions under U.S. tax rules, as well as 2015 earnings for which an assertion cannot be made unless certain U.S. tax regulations are extended for 2015 and future years. At June 30, 2015, our foreign earnings considered to be indefinitely reinvested outside the United States totaled $321.2 million, all of which are subject to U.S. taxes, offset by an adjustment for foreign tax credits, if repatriated. In cases where we could not assert or do not intend to assert indefinite reinvestment of the undistributed earnings of certain foreign subsidiaries, we provided taxes on such undistributed earnings at the U.S. statutory rate of 35.0%, offset by an adjustment for foreign tax credits, where applicable.