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Income Taxes
9 Months Ended
Sep. 30, 2013
Income Taxes

5. Income Taxes

The effective tax rate for the quarter ended September 30, 2013 was approximately 22%, compared to approximately 27% for the prior year quarter. The effective tax rate for the quarter and nine months ended September 30, 2013 reflected the discrete tax effects of an IPR&D charge related to the acquisition of 3DT, which was incurred in a high tax jurisdiction, and a benefit associated with the remeasurement of an uncertain tax position as a result of the settlement of the Brachytherapy Matter. In addition, the effective tax rate for the nine months ended September 30, 2013 reflected the discrete tax effects of litigation charges, primarily related to product liability claims, which were substantially incurred in a low tax jurisdiction, and the write-down of an insurance receivable, which also was incurred in low tax jurisdiction. See Note 8 of the notes to condensed consolidated financial statements. The effective tax rate was also impacted by the American Taxpayer Relief Act of 2012, which was signed into law on January 2, 2013 and retroactively reinstated the research tax credit. Although the reinstatement of this tax credit is retroactive to January 1, 2012, the enactment of this legislation in 2013 precluded the company from recording the benefit in 2012. As a result, the company’s income tax provision was reduced by approximately $3.7 million during the nine months ended September 30, 2013 to recognize the 2012 benefit of this tax credit that would have been recorded in 2012. At September 30, 2013, the total amount of liability for unrecognized tax benefits related to federal, state and foreign taxes was $48.5 million (of which $40.4 million would impact the effective tax rate, if recognized) plus $6.3 million of accrued interest. At December 31, 2012, the liability for unrecognized tax benefits was $43.4 million plus $4.8 million of accrued interest. Depending upon the result of open tax examinations and/or the expiration of applicable statutes of limitation, the company believes it is reasonably possible that the total amount of unrecognized tax benefits may decrease by up to $18.4 million within the next 12 months.