Note 10 – Income Taxes

The Company's interim period income tax provision is determined as follows:

·	At the end of each fiscal quarter, the Company estimates the income tax that will be provided for the fiscal year.

The forecasted annual effective tax rate is applied to the year-to-date ordinary income (loss) at the end of each quarter to compute the year-to-date tax applicable to ordinary income (loss). The term ordinary income (loss) refers to income (loss) from continuing operations before income taxes, excluding significant, unusual or infrequently occurring items. The tax provision or benefit related to ordinary income (loss) in each quarter is the difference between the most recent year-to-date and the prior quarter-to-date computations.

The tax effects of significant or infrequently occurring items are recognized as discrete items in the interim periods in which the events occur. The impact of changes in tax laws or rates on deferred tax amounts, the effects of changes in judgment about valuation allowances established in prior years, and changes in tax reserves resulting from the finalization of tax audits or reviews are examples of significant, unusual or infrequently occurring items which are recognized as discrete items in the interim period in which the event occurs.

The determination of the forecasted annual effective tax rate is based upon a number of significant estimates and judgments, including the forecasted annual income (loss) before income taxes of the corporation in each tax jurisdiction in which it operates, the development of tax planning strategies during the year, and the need for a valuation allowance. In addition, the Company's tax expense can be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, as well as other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions.

The forecasted annual effective tax rate is 37.75 percent and 36.15 percent for 2013 and 2012, respectively. The difference reflects changes in the mix of income between foreign and domestic operations.

The following table sets out the tax benefit and the effective tax rates of the Company:

	Three Months Ended March 31,
	2013			2012

Income (loss) before income taxes	$	902		$	(2,412	)
Income tax benefit	$	(553	)	$	(805	)
Effective tax rate		(61.3	)%		33.4	%

In the first quarter of 2013, the Company recognized a tax benefit of $553 on income before income taxes of $902, or an effective tax rate of (61.3) percent, as compared to an effective tax rate of 33.4 percent for the first quarter of 2012. During the first quarter of 2013, the U.S. Congress enacted tax legislation that retroactively reinstated certain tax benefits. The first quarter of 2013 effective tax rate reflects the retroactive benefits of this legislation and the tax benefit of certain effectively settled uncertain tax positions in the amount of $834.

The effective tax rate for the first three months of 2013, as compared to rate for the first three months of 2012, is primarily due to the discrete benefits recorded during the quarter.

The Company had reserves for unrecognized tax benefits, exclusive of interest and penalties, of $1,794 and $2,093 at March 31, 2013 and December 31, 2012, respectively. The reserve for uncertain tax positions as of March 31, 2013 decreased primarily due to the effective settlement of previously recorded uncertain tax positions.