Note 5 - Income Taxes

6 Months Ended

Jun. 30, 2013

NOTE 5. INCOME TAXES

The Company recorded income tax provisions of $0.8 million and $1.7 million in the second quarter and first half of 2013, respectively, and income tax benefits of $3.5 million and $2.3 million in the second quarter and first half of 2012, respectively. The effective income tax rate was 40.7% and 34.8% in the first half of 2013 and 2012, respectively. Excluding the goodwill impairment charge, the effective income tax rate for the first half of 2012 was 40.8%.

The Company is permitted to deduct certain intangible assets and goodwill balances over a period of 15 years from the date of the historic acquisitions, thereby reducing the Company’s taxable income as reported on the income tax return. The Company estimates the annual cash savings from these deductions, as compared with tax expense to be provided for in the Company’s financial statements, from these deductions as follows:

	Income Tax Benefit
2013	$	4,700
2014		4,800
2015		5,100
2016		5,300
2017		5,600
2018 and thereafter		38,200
	$	63,700

In the year in which these benefits are realized, the Company would recognize a reduction in a long term deferred tax asset.

At June 30, 2013, the Company did not have any unrecognized tax benefits. During the second quarter of 2013, the Company reversed its uncertain tax position reserve.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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