Note K Income Taxes

6 Months Ended

Jun. 30, 2011

Note K Income Taxes [Abstract]

NOTE K INCOME TAXES

NOTE K — INCOME TAXES

The Company’s effective tax rate was 34% and 16% for the three month periods ended June 30, 2011 and 2010, respectively, and 34% and 20% for the six month periods ended June 30, 2011 and 2010, respectively. The lower effective tax rate for the period ended June 30, 2011 compared to the U.S. federal statutory tax rate of 35% is primarily due to increased earnings in jurisdictions with lower tax rates than the U.S. federal statutory rate in jurisdictions where such earnings are permanently reinvested. The higher effective tax rate for the period ended June 30, 2011 compared with the same period for 2010 was primarily due to favorable discrete items recognized in 2010, primarily related to a favorable foreign tax incentive for technological innovation and a decrease of unrecognized tax benefits effectively settled through audits.

The Company provides valuation allowances against deferred tax assets when it is more likely than not that some portion, or all, of its deferred tax assets will not be realized. No significant changes to the valuation allowance were made for the period ended June 30, 2011.

As of June 30, 2011, the Company had gross unrecognized tax benefits of approximately $1.1 million and there were no significant changes during the period ended June 30, 2011.