Provision for Income Taxes

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Provision for Income Taxes

Note 11. Provision for Income Taxes

For the nine month period ended September 30, 2013, our effective tax rate of 34% was consistent with the U.S. federal statutory tax rate of 34%. For the nine month period ended September 30, 2012, the difference between the U.S. federal statutory tax rate of 34% and our effective tax rate of 19% 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 $2,692. Additionally, the effective tax rate was impacted by non-U.S. based earnings being taxed at lower rates, which reduced tax expense by approximately $777.

Effective December 31, 2012, we 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 three and nine month periods ended September 30, 2013, we recognized tax expenses and benefits at our U.S. units. During the three and nine months ended September 30, 2012, we continued to place a valuation allowance on all of the net deferred tax assets of our U.S. units, the balance of which approximated $9,800 at September 30, 2012. During the three and nine month periods ended September 30, 2012, the valuation allowance on a portion of these deferred tax assets was reversed to offset U.S. pre-tax income of approximately $1,200 and $7,200, respectively, resulting in zero tax expense for the U.S. units in those periods.

As of September 30, 2013, we do not foresee any significant changes to our unrecognized tax benefits within the next twelve months.