Income Tax Expense

3 Months Ended

Mar. 31, 2012

Income Tax Expense (Benefit) [Abstract]

Income Tax Expense

Income Tax Expense

The Company applied an estimated annual effective tax rate (“ETR”) approach for calculating a tax provision for interim periods, as required under GAAP.  The Company recorded a provision for income taxes of $0.6 million and $0 for the three months ended March 31, 2012 and 2011, respectively.  The Company's ETR was (3.6)% and 0% for the three months ended March 31, 2012 and 2011, respectively.  The Company's ETR for the three months ended March 31, 2012 differs from the U.S. federal statutory tax rate of 35% primarily as a result of nondeductible expenses (including the Nellix Contingent Payment), state income taxes, foreign provision for income taxes, and the impact of a full valuation allowance. The Company's ETR for the three months ended March 31, 2011 differs from the U.S. federal statutory tax rate of 35% primarily as a result of nondeductible expenses, and the impact of a full valuation allowance.

The Company has evaluated the available evidence supporting the realization of its gross deferred tax assets, including the amount and timing of future taxable income, and has determined that it is more likely than not that the deferred tax assets will not be realized. Due to such uncertainties surrounding the realization of the deferred tax assets, the Company maintains a full valuation allowance against its deferred tax assets. If  the Company were to determine that it would be able to realize their deferred tax assets in the future, an adjustment to the valuation allowance on its deferred tax assets would increase net income in the period such determination was made.