6. INCOME TAXES

The Company bases its consolidated effective income tax rate for interim periods on its forecasted annual consolidated effective income tax rate, which includes estimates of the taxable income and revenue for jurisdictions in which the Company operates. Total tax expense then was allocated between continuing operations and discontinued operations. The following table presents the components of the Company’s provision for income taxes:


	For the three months						For the six months
	ended June 30,						ended June 30,
(In thousands)	2011			2010			2011		2010

Provision for income taxes:
Continuing operations	$	2,762		$	3,533		$	3,209	$	6,299
Discontinued operations		(48	)		(116	)		—		(454	)

Provision for income taxes	$	2,714		$	3,417		$	3,209	$	5,845

The Company’s full-year forecasted effective income tax rate for continuing operations was 39.5% and 39.0% for the six months ended June 30, 2011 and 2010, respectively. As a comparison, the Company’s actual effective income tax rate for continuing operations for the year ended December 31, 2010 was 39.0%. The variances between the U.S. federal statutory rate of 35% and the Company’s forecasted effective income tax rate for the six months ended June 30, 2011 and 2010 is primarily due to state income taxes and permanent items that are not deductible for U.S. tax purposes, partially offset by the reversals of portions of the Company’s valuation allowance related to foreign tax credits totaling $0.3 million and $0.4 million during the six months ended June 30, 2011 and 2010, respectively. Also impacting the Company’s full-year forecasted effective income tax rate as of June 30, 2010 was $0.8 million in non-deductible acquisition related costs. As a comparison, the Company reversed portions of its valuation allowance related to foreign tax credits totaling $0.5 million for the year ended December 31, 2010, but this amount was offset by the aforementioned non-deductible acquisition related costs totaling $0.8 million.

The difference between the Company’s full-year forecasted effective income tax rate of 39.5% and the Company’s tax expense recorded in its condensed consolidated statement of income for the six months ended June 30, 2011 relates to statute expirations and forecasted foreign tax credits totaling $0.3 million.

As of June 30, 2011 and December 31, 2010, the Company’s reserve for uncertain tax positions totaled approximately $2.4 million and $2.6 million, respectively. Changes in this reserve could impact the Company’s effective tax rate in subsequent periods. The Company recognizes interest and penalties related to uncertain income tax positions in interest expense and selling, general and administrative expenses, respectively, in its condensed consolidated statements of income. As of June 30, 2011 and December 31, 2010, the Company’s reserves for interest and penalties related to uncertain tax positions totaled approximately $0.6 million and $0.7 million, respectively.

The Company continues to focus on tax planning strategies on a U.S. federal, state and local level, including continuing to work towards identifying opportunities to utilize its gross tax assets that have valuation allowances provided against them. Additionally, the Company will, on occasion, engage specialists, in some cases on a contingency basis, to evaluate filed returns and the methodologies used in those returns, to determine if the Company can further optimize its tax positions. As a result of these processes, the Company has identified an aggregate net potential recovery of approximately $1.4 million in one of the major local jurisdictions in which it operates related to a non-income related tax for several prior tax periods. The Company is pursuing collection of this amount from the taxing authority, but has not recorded any receivable related to this gain contingency as of June 30, 2011. The Company will record this tax benefit when and if realization of the associated amount is assured beyond a reasonable doubt.