10.	INCOME TAXES

Income tax provisions from continuing operations consisted of the following:


	Three Months Ended
	March 31,
	2014			2013
	(In thousands)
Income from continuing operations before provision for income taxes	$	2,947		$	1,704
Provision for income taxes		(1,083	)		(17	)
Effective tax rate		36.7	%		1.0	%

The provision for income tax for the three months ended March 31, 2014 resulted primarily from the Company’s federal and foreign tax recognized at statutory rates, adjusted for the tax impact of nondeductible permanent items including stock based compensation and foreign withholding taxes. The income tax provision for the three months ended March 31, 2013 is primarily as a result of foreign taxes and foreign withholding tax expense.

In July 2013, the FASB ratified ASU 2013-11 “Presenting an Unrecognized Tax Benefit (“UTB”) When a Net Operating Loss Carryforward Exists” (“ASU 2013-11”). ASU 2013-02 provides that an UTB, or a portion thereof, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except to the extent that a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date to settle any additional income taxes that would result from disallowance of a tax position, or the tax law does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, then the unrecognized tax benefit should be presented as a liability. This ASU was effective for reporting periods beginning after December 15, 2013, and may be applied retrospectively. The impact was not significant on the Company’s condensed consolidated results of operations and financial condition.

As of March 31, 2014, the Company had unrecognized tax benefits under ASC 740 “Income Taxes” of approximately $1.7 million including interest of $66,000. The total amount of unrecognized tax benefits that would affect the Company’s effective tax rate, if recognized, was $266,000. There were no material changes in the amount of unrecognized tax benefits during the three months ended March 31, 2014. The Company expects to release reserves and record a tax benefit due to the expiration of applicable statutes of limitations during the next twelve months. The Company’s policy is to account for interest and penalties related to uncertain tax positions as a component of income tax provision.

Net deferred income taxes were $35.8 million as of March 31, 2014 consisting primarily of federal net operating loss carryforwards and timing differences between book and tax. Because the Company had net operating loss and credit carryforwards, there are open statutes of limitations in which federal, state, and foreign taxing authorities may examine the Company’s tax returns for all years from 1998 through the current period.

The Company maintains a valuation allowance of $7.0 million against deferred tax assets, including state and certain foreign deferred tax assets. The Company also has determined there is not sufficient evidence to support the release of the valuation allowance against these state and foreign deferred tax assets.