Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes [Abstract]

Income Taxes

10. Income Taxes

For the three-month and nine-month periods ended September 30, 2011 and 2010, our income tax expense (benefit) and effective tax rates were as follows (dollars in thousands):

		0000000000		0000000000		0000000000		0000000000
	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Income tax expense (benefit)	$	1,073	$	2,456	$	791	$	(592)
Effective income tax rate		35.1 %		30.8 %		35.1 %		(83.7)%

We estimate the differences between taxable income or loss and recorded income or loss on an annual basis. Our tax provision for each quarter is based upon these full year projections, which are revised each reporting period. These projections incorporate estimates of permanent differences between U.S. GAAP income or loss and taxable income or loss, state income taxes and adjustments to our liability for unrecognized tax benefits to adjust our statutory Federal income tax rate of 35% to our effective income tax rate.

For the nine-month period ended September 30, 2011, these estimates increased or decreased our statutory Federal income tax rate of 35.0% to our effective income tax rate of 35.1% as follows: permanent differences between our U.S. GAAP income and taxable income added 4.4% and state income taxes added 7.0%, while adjustments to our reserve for uncertain tax positions resulted in a reduction of 10.1% and other items resulted in a reduction of 1.2%.

For the nine-month period ended September 30, 2010, these estimates increased or decreased our statutory Federal income tax rate of 35.0% to our effective income tax rate of (83.7)% as follows: permanent differences between our U.S. GAAP income and taxable income added 1.5% and state income taxes added 9.1%, while adjustments to our reserve for uncertain tax positions resulted in a reduction of 3.9%. During the nine-month period ended September 30, 2010, we also elected a change in filing status in a state tax jurisdiction. As a result of this change in filing status, a deferred tax asset valuation allowance of $0.9 million on the state net operating loss was no longer necessary and was released, which reduced our effective tax rate by 125.4% for the nine-month period ended September 30, 2010.