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Income Taxes
 6 Months Ended
Jun. 30, 2012
Income Taxes
 10. Income Taxes

 

The following table is a reconciliation of the Company’s statutory income tax expense to its effective tax rate for the three and six months ended June 30, 2012 and 2011:

 

    Three Months Ended June 30,     Six Months Ended June 30,  
(Amounts in Thousands)   2012     2011     2012     2011  
Income before equity in earnings (loss) of unconsolidated subsidiaries   $ 49,294     $ 64,693     $ 97,327     $ 125,233  
Tax at federal statutory rate of 35%     17,253       22,643       34,064       43,832  
Tax effects resulting from:                                
Net income of non-includible foreign subsidiaries     (5,697 )     (9,693 )     (10,265 )     (17,336 )
Other, net     186       (5,661 )     (880 )     (10,170 )
    $ 11,742     $ 7,289     $ 22,919     $ 16,326  
Effective tax rate     23.8 %     11.3 %     23.5 %     13.0 %

 

 The Company’s management believes that it will realize the benefits of its deferred tax assets, which is included as a component of the Company’s net deferred tax liability, and, accordingly, no valuation allowance has been recorded for the periods presented. The earnings of certain of the Company’s foreign subsidiaries have been indefinitely reinvested in foreign operations. Therefore, no provision has been made for any U.S. taxes or foreign withholding taxes that may be applicable upon any repatriation or sale. The determination of any unrecognized deferred tax liability for temporary differences related to investments in certain of the Company’s foreign subsidiaries is not practicable. As of June 30, 2012 and December 31, 2011, the financial reporting basis in excess of the tax basis for which no deferred taxes have been recognized was approximately $252,307 and $223,300, respectively.

 

   The Company’s major taxing jurisdictions include the U.S. (federal and state), the United Kingdom and Ireland. The years subject to potential audit vary depending on the tax jurisdiction. Generally, the Company’s statute of limitation is open for tax years ended December 31, 2007 and forward. As permitted by FASB ASC 740-10, the Company adopted an accounting policy to prospectively classify accrued interest and penalties related to any unrecognized tax benefits in its income tax provision. Previously, the Company’s policy was to classify interest and penalties as an operating expense in arriving at pre-tax income. At June 30, 2012, the Company does not have any accrued interest and penalties related to unrecognized tax benefits in accordance with FASB ASC 740-10.