INCOME TAXES

3 Months Ended

Mar. 31, 2013

INCOME TAXES

INCOME TAXES

NOTE 9—INCOME TAXES

For the three months ended March 31, 2013 and 2012, we recorded a tax provision (benefit) of $20 thousand and $(2.1) million, respectively, which represent effective tax rates of (7.9)% and 39.5%, respectively. The Company established a valuation allowance of approximately $55 million during the year ended December 31, 2012 to offset its US net deferred tax assets, after excluding deferred tax liabilities related to indefinite lived intangible assets that are not going to provide a source of taxable income in the foreseeable future.  In the first quarter of 2013, the effective income tax rate was impacted by the indefinite lived intangible assets which are amortized for tax purposes but are not amortized for book purposes, as well as a discrete state tax liability occurring during the quarter.  In the first quarter of 2012, the tax rate was higher than the federal statutory rate of 35% primarily due to the impact of state income taxes.