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Income Taxes
 3 Months Ended
Mar. 31, 2013
Income Taxes  
Income Taxes

8.  Income Taxes

 

A reconciliation of the liability for unrecognized tax benefits is as follows:

 

 

 

Noncurrent
tax liabilities

 

 

 

(in thousands)

 

Balance at January 1, 2013

 

$

20,393

 

Additions based on current year positions

 

280

 

Additions based on prior year positions

 

1,691

 

Currency translation adjustments

 

(607

)

Balance at March 31, 2013

 

$

21,757

 

 

The increase in the Company’s liability for unrecognized tax benefits during the three months ended March 31, 2013 was primarily due to recording interest expense accruals for previously recorded unrecognized tax benefits.

 

The Company’s effective tax rate (income taxes as a percentage of income from operations before income taxes) increased to 39.6% for the three months ended March 31, 2013, as compared to 37.3% for the three months ended March 31, 2012. During the three months ended March 31, 2013, the Company recorded a $1.1 million valuation allowance against the tax benefit associated with capital losses incurred within the quarter that the Company does not believe it will be able to utilize prior to their expiration.

 

At March 31, 2013 and December 31, 2012, prepaid expenses within the condensed consolidated balance sheets include prepaid income taxes of $33.6 million and $68.4 million, respectively.