Uncertain Tax Positions (Tables)

9 Months Ended

Sep. 30, 2012

Reconciliation of unrecognized tax benefits

As of December 31, 2011, the Company had approximately $2.1 million of total gross unrecognized tax benefits that if recognized, would favorably affect the net effective income tax rate in any future period. As of September 30, 2012, the Company had approximately $3.5 million of total gross unrecognized tax benefits. Of this total, $1.5 million represents the amount of unrecognized tax benefits that, if recognized, would favorably affect the net effective income tax rate in any future period. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands of dollars):

(Thousands of dollars)

Balance at January 1, 2012	$	2,060

Gross increases- current year tax positions		1,974
Gross increases- tax positions from prior periods		4
Gross decreases - tax positions from prior periods		(581	)

Balance at September 30, 2012	$	3,457

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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