v2.4.0.6
Income Taxes
 9 Months Ended
Sep. 30, 2012
Income Taxes
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 nine months ended September 30, 2012 and 2011:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(Amounts in Thousands)
2012
 
2011
 
2012
 
2011
Income before equity in earnings (loss) of unconsolidated subsidiaries
$
55,873

 
$
55,397

 
$
153,200

 
$
180,630

Tax at federal statutory rate of 35%
$
19,556

 
$
19,389

 
$
53,620

 
$
63,221

Tax effects resulting from:
 

 
 

 
 

 
 

Net income of non-includible foreign subsidiaries
(7,494
)
 
(5,471
)
 
(17,759
)
 
(28,100
)
Other, net
1,125

 
379

 
245

 
(4,498
)
 
$
13,187


$
14,297


$
36,106


$
30,623

Effective tax rate
23.6
%
 
25.8
%
 
23.6
%
 
17.0
%

 
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 September 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 $273,242 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 September 30, 2012, the Company does not have any accrued interest and penalties related to unrecognized tax benefits in accordance with FASB ASC 740-10.