Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of David Leiker with Robert W. Baird. Please proceed.
David Leiker - Robert W. Baird
Good morning.
David Rayburn
Good morning.
Brad Richardson
Good morning.
David Leiker - Robert W. Baird
I had a handful of number related questions here to start with. Brad, if you take out pension and the claim out of those numbers, where would your tax rate have been?
Brad Richardson
Well, I think what I would say is, I would prefer to answer that the primary driver here is the change in the tax rate associated with Germany. So, let me just kind of walk through the change in that tax rate to kind of show you what I think would have been a more normalized tax rate for the quarter. And certainly, if you take the minus -- again a 124% effective tax rate that is negative rate, we had $2.5 million benefit of simply the change in our deferred tax liability albeit -- the liabilities now have been reduced, so there was a $2.5 million pick up to our earnings. Also associated with this was a further $2.5 million pick up as we recalculated if you will, our effective tax rate and brought it up to current for the impact on the quarterly results post the change in this tax rate change.
David Leiker - Robert W. Baird
Okay
Brad Richardson
So, those two factors would bring the effective tax rate down to - quite frankly in the quarter at about minus 12%. As we look at -- and that again David is a function of the large losses that we’ve incurred in the high tax jurisdiction here in the United States.
As we look forward for the rest of the year, we would expect the incremental earnings to kind of -- tax that about a 19% rate, which again I think factors in to the overall tax rate of guidance set between 5% and 9%.
David Leiker - Robert W. Baird
So 19% for the second half of the year?
Brad Richardson
Correct.
David Leiker - Robert W. Baird
Okay. And then as you go out to the 2010 number, and obviously a big part of that’s North America doing better, that tax rate gets back up to a 35% to 40% rate by then?
Brad Richardson
No, it doesn’t. Because again, I think we’re seeing that the profits clearly are being shifted towards the international side of the business where the tax rate’s kind of in what you’d call the 25% range.
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