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INCOME TAXES:
 9 Months Ended
Sep. 30, 2013
INCOME TAXES:  
INCOME TAXES:

NOTE 4 — INCOME TAXES:

 

The income tax provision and the effective income tax rate for the nine months of 2013 and 2012 were as follows ($ in millions):

 

 

 

2013

 

2012

 

Income tax provision

 

$

596.9

 

$

848.5

 

Effective income tax rate

 

33.2

%

38.2

%

 

These provisions include income taxes for Peru, Mexico and the United States. The higher effective tax rate in the nine months of 2012 is primarily due to $316.2 million of a one-time payment of legal fees related to the SCC shareholders derivative lawsuit, which is being treated as a non-deductible expense.

 

Changes in U.S. tax regulations

 

In September 2013, the Internal Revenue Service issued final regulations related to “tangible property.” These regulations govern when a taxpayer must capitalize or deduct expenses for acquiring, maintaining, repairing and replacing tangible property. The regulations are effective January 1, 2014 and early adoption is permitted.  The issuance of these tax regulations is considered a change in tax law under the guidelines of ASC 740.  The Company believes that the effect of the change should not have a material effect on its financial statements.