Provision for Income Taxes

3 Months Ended

Mar. 31, 2013

Provision for Income Taxes [Abstract]

Provision for Income Taxes

Note 11. Provision for Income Taxes

Effective December 31, 2012, we have removed the valuation allowance on the majority of the deferred tax assets of our U.S. units as discussed in our Annual Report on Form 10-K filed March 15, 2013. As such, during the first quarter of 2013, we recognized tax expenses and benefits at our U.S. units. During the quarter ended March 31, 2012, we had continued to place a valuation allowance on all of the net deferred tax assets of our U.S. units, the balance of which approximated $11,750 at March 31, 2012. During the quarter ended March 31, 2012, the valuation allowance on a portion of these deferred tax assets was reversed to offset pre-tax income of approximately $2,200 resulting in zero tax expense for the U.S. units in that quarter.

For the three month period ended March 31, 2013, the difference between the U.S. federal statutory tax rate of 34% and our effective tax rate of 33% was primarily due to the effective tax rate being impacted by non-U.S. based earnings taxed at lower rates. For the three month period ended March 31, 2012, the difference between the U.S. federal statutory tax rate of 34% and our effective tax rate of 20% was primarily due to utilization of the fully reserved net operating losses to offset U.S. based taxable income, which lowered tax expense by approximately $800. Additionally, the effective tax rate was impacted by non-U.S. based earnings being taxed at lower rates, which reduced tax expense by approximately $400.

As of March 31, 2013, we do not foresee any significant changes to our unrecognized tax benefits within the next twelve months.