Income Taxes

Our estimated annual effective tax rate, adjusted for discrete tax items, is applied to interim periods’ pretax earnings. We consider the undistributed earnings of our principal non-U.S. subsidiaries to be permanently reinvested, and as such, we have not provided for any U.S. federal income taxes on these permanently reinvested earnings. We believe that our recorded assets and liabilities are reasonable; however, tax laws and regulations are subject to interpretation and tax litigation is inherently uncertain, and therefore our assessments can involve a series of complex judgments about future events and rely heavily on estimates and assumptions.

The effective tax rates for the three-month periods ended March 31, 2015 and 2014 were 2.0% and 27.4%, respectively. The variance was primarily attributable to the earnings mix between our higher and lower tax rate jurisdictions.

Income taxes have been provided based on the U.S. statutory rate of 35% and at the local statutory rate for each foreign jurisdiction. The primary differences between the U.S. statutory rate and our effective rate are as follows:



	Three Months Ended March 31,
	2015		2014

U.S. statutory rate	35.0	%	35.0	%
Foreign provision	(34.1	)	(8.5	)
Other	1.1		0.9
Effective rate	2.0	%	27.4	%