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INCOME TAXES
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6 Months Ended |
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Jun. 30, 2012
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| INCOME TAXES |
6. INCOME TAXES
We are subject to U.S. federal, state and international income taxes. We are generally no longer subject to federal, state, or international income tax examinations by tax authorities for years ending prior to December 31, 2004, with few exceptions. Due to the potential for resolution of state and foreign examinations, and the expiration of various statutes of limitations, it is reasonably possible that our gross unrecognized tax benefit balance may change within the next twelve months by a range of $0 to $5.1 million.
Effective Tax Rate. Our effective income tax rate was 35.0% for the three months ended June 30, 2012, down from 59.4% for the same period in 2011 due primarily to the impact of recording $17.5 million of tax expense associated with the Brazilian Transaction in 2011. The impact of the Brazilian Transaction increased our effective rate 23.2% for the quarter in 2011. The effective income tax rate on the Brazilian Transaction was higher than the statutory rate primarily due to the recognition of tax impacts related to foreign currency changes for which we had not previously recorded tax expense because we have historically been permanently invested in Brazil with respect to foreign currency fluctuations. The remainder of the rate decrease is due to the impact of lower foreign income taxes and the reversal of certain contingent tax liabilities. The effective income tax rate was 35.9% for the six months ended June 30, 2012, down from 48.4% for the same period in 2011 with the decrease primarily due to the Brazilian Transaction. The impact of the Brazilian Transaction increased our effective rate 11.4% for the six months ended June 30, 2011. The six month effective income tax rate also decreased due to the impact of lower foreign income taxes and the reversal of certain contingent tax liabilities. |