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INCOME TAXES
6 Months Ended
Jun. 30, 2013
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES

The Company recorded income tax expense of $21.0 million and $33.2 million for the three and six months ended June 30, 2013, respectively, as compared to $31.0 million and $51.1 million for the three and six months ended June 30, 2012. The Company's effective income tax rate was 44% and 39% for the six months ended June 30, 2013 and 2012, respectively.

The Company's 2013 income tax expense and rate differs from the amount of income tax determined by applying the U.S. Federal income tax rate to pre-tax income primarily as a result of the Italian law changing the insurance proceeds from the earthquake to non-taxable. In addition, as a result of the reassessment of the realizability of the deferred tax assets, the valuation allowance was established on the Italy net deferred tax assets. This valuation allowance was needed due to the decrease in expectations related to taxable income related to the insurance proceeds becoming non-taxable as a result of the tax law change. Other items contributing to the rate difference are state tax expense, expense for unrecognized tax benefits, foreign earnings, domestic production activities deduction, and tax deductible expenses related to the convertible bond repurchase.

Accounting standards for income taxes provide that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination. The Company's unrecognized tax benefits were $17.9 million and $14.3 million as of June 30, 2013 and December 31, 2012, respectively. As of June 30, 2013, $14.2 million would affect income tax expense if recognized. The majority of the increase in unrecognized tax benefits relates to potential state tax exposures. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. The amount of accrued interest and penalties included in the unrecognized tax benefits at June 30, 2013 and December 31, 2012 was $3.0 million and $2.4 million, respectively.