Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes [Abstract]

INCOME TAXES

6. INCOME TAXES

     Income taxes are recognized for the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in our consolidated financial statements or tax returns. The effects of income taxes are measured based on enacted tax laws and rates.

     As of June 30, 2011 and December 31, 2010, we had $33.5 million and $38.7 million, respectively, of gross unrecognized tax benefits. As of June 30, 2011, if such benefits were to be recognized, approximately $33.5 million would be recorded as a component of income tax expense, thereby affecting our effective tax rate. The majority of the reduction in unrecognized tax benefits is due to benefits recorded in connection with the favorable resolution of a German tax audit.

     We, or one of our subsidiaries, file income tax returns with the United States Internal Revenue Service, as well as various state and foreign authorities. The following table summarizes, by major jurisdiction, tax years that remain subject to examination:

	Open Tax Years
	Examinations not		Examination in
Jurisdiction	yet initiated		progress
United States
Federal		2007-2010		N/A
State		2005-2010		2004 & 2006-2008
Canada (1)		2006-2010		2006 - 2009
Germany (1)		2007-2010		2004 - 2009
France		2007-2010		N/A
United Kingdom		2007-2010		N/A
Philippines		2010		2009

(1) — includes provincial or similar local jurisdictions, as applicable

     The amount of income taxes we pay is subject to ongoing audits by federal, state and foreign tax authorities, which often result in proposed assessments. Management performs a comprehensive review of its global tax positions on a quarterly basis and accrues amounts for uncertain tax positions. Based on these reviews and the result of discussions and resolutions of matters with certain tax authorities and the closure of tax years subject to tax audit, reserves are adjusted as necessary. However, future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are determined or resolved or as such statutes are closed. Due to potential for resolution of federal, state and foreign examinations, and the expiration of various statutes of limitation, it is reasonably possible our gross unrecognized tax benefits balance may decrease within the next twelve months by a range of zero to $3.6 million. Substantially all of this range relates to tax positions taken in the U.S. and in the United Kingdom.

     We recognize interest and penalties related to uncertain tax positions as income tax expense. During the first half of the year, we recognized a net reduction of interest expense of $2.0 million. For the second quarter of 2011, we recognized a net reduction of interest expense of $2.3 million, the majority of which was in connection with the favorable settlement of a German tax audit. For the second quarter of 2010, we recognized $0.4 million of interest expense. As of June 30, 2011, accrued interest payable was $1.8 million, and as of December 31, 2010, accrued interest payable was $3.8 million. We did not record any penalties associated with uncertain tax positions during the second quarters of 2011 or 2010.