Income Taxes

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Income Taxes

(3) Income Taxes

The Company’s provision for income taxes consists of federal, state and local, and foreign taxes, as applicable, in amounts necessary to align the Company’s year-to-date tax provision with the effective rate that it expects to achieve for the full year. The Company’s 2012 annual effective tax rate (excluding discrete items) is estimated to be approximately (9.5%) based upon its anticipated results both in the U.S. and in its foreign subsidiaries.

For the three months ended March 31, 2012, the Company recorded an income tax provision of $0.2 million on its pre-tax loss of $2.2 million, consisting of primarily state and local and foreign taxes. Additionally, the Company recorded an adjustment to its accrual for certain legal matters during the three months ended March 31, 2012, which the Company believes will be non-deductible for US income tax purposes. The tax impact related to this accrual was recorded as a discrete item during the three months ended March 31, 2012. During the three months ended March 31, 2012, the Company’s conclusion did not change with respect to its domestic deferred tax assets and, therefore, the Company has not recorded any benefit for its net domestic deferred tax assets for its expected net domestic deferred tax assets for the full year 2012estimated annual effective tax rate. As of March 31, 2012, the valuation allowance totaled approximately $32.4 million.

For the three months ended March 31, 2011, the Company recorded an income tax provision of $0.6 million on its pre-tax loss of $5.4 million, consisting of primarily state and local and foreign taxes.

The Company’s total unrecognized tax benefits for both March 31, 2012 and December 31, 2011 were approximately $5.1 million, which if recognized, would affect the Company’s effective tax rate. As of March 31, 2012 and December 31, 2011, the Company recorded an aggregate of approximately $265,000 and $232,000, respectively, of accrued interest and penalties.