Income Taxes

6 Months Ended

Jun. 30, 2013

Income Taxes

Income Taxes

(6) Income Taxes

Current period U.S. and foreign income (loss) before income taxes as well as income tax expense were as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2013		2012			2013		2012
	(In thousands)
Income (loss) from continuing operations before income taxes:
U.S.	$	1,888	$	(3,913	)	$	1,995	$	(7,356	)
Foreign	2,972		7,051			6,973		15,484
Total	$	4,860	$	3,138		$	8,968	$	8,128
Income tax expense:
U.S.	$	1,190	$	1,399		$	2,380	$	2,787
Foreign	735		1,317			2,204		3,633
Total	$	1,925	$	2,716		$	4,584	$	6,420

Due to our history of domestic losses, in 2011 we recorded a full valuation allowance for all net deferred tax assets, including our net operating loss and tax credit carryforwards.  As a result, we cannot record any tax benefits for additional U.S. incurred losses and any U.S. income is offset by a reduction in valuation allowance.  Irrespective of our income or loss levels, we continue to record U.S. deferred tax expense related to goodwill amortization.

The effective rate on our foreign tax expense varies with the mix of income and losses across multiple tax jurisdictions with most statutory tax rates varying from 23% to 33%.  The reduction of foreign pre-tax income from continuing operations from the second quarter of 2012 to 2013 is related to an overall decrease in profitability of the business, including the impact of restructuring costs, and the implementation of new transfer pricing practices.  The foreign effective tax rate increase through the second quarter of 2013 is a result of the mix of income and losses across jurisdictions and increased tax reserves for certain new tax exposure items.