Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes

Income Taxes

10. INCOME TAXES

The Company is subject to income taxes in the US and Malaysia. In accordance with the provisions of ASC Topic 740, "Income Taxes" the Company assesses on a quarterly basis its ability to realize its deferred tax assets. During the three months ended June 30, 2011, the Company concluded that based on the current level of sustainable profitability that generates taxable income, that it is more likely than not that the Company's deferred tax assets will be realizable. The Company recognized a tax benefit of $3.3 million to record current and long-term deferred tax assets. With the release of the valuation allowance, the Company began recording federal and certain state and non-US income taxes attributable to the fiscal year's pre-tax income. The Company recorded for the three and six months ended June 30, 2011, a tax provision of $13.5 million and $14.7 million, respectively, for an effective tax rate of 57.7% and 33.7%. The effective tax rate for the three months ended June 30, 2011, reflects a tax charge of approximately $5.5 million, or 23.7%, to provide for additional taxes on pre-tax income earned in the first three months of 2011 as a result of releasing the valuation reserve.