Income Taxes

6 Months Ended

Jun. 30, 2012

Income Taxes [Abstract]

Income Taxes

(7) Income Taxes

Effective Tax Rate

The Company computes its provision for income taxes by applying the estimated annual effective tax rate to income from recurring operations and adjusts the provision for discrete tax items recorded in the period. The Company’s effective tax rate for the three and six months ended June 30, 2012 was 3.9% and (1.4%), respectively, which was lower than the federal statutory tax rate of 34%. The lower tax rate was primarily attributable to a foreign tax differential and non-deductible expenses arising from stock-based compensation, partially offset by state income taxes and California tax credits. During the three months ended June 30, 2012, we generated a loss in our operations, which decreased our effective income tax rate.

The Company’s effective tax rate for the three and six months ended June 30, 2011 was 12.0%, which was lower than the federal statutory tax rate of 34%. The lower tax rate was attributable to the benefit of federal and California research tax credits offset by state income taxes and a foreign tax differential.