Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes [Abstract]

INCOME TAXES

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:

		$00,000		$00,000			$00,000		$00,000
	For the three months					For the nine months
	ended September 30,					ended September 30,
(In thousands)	2011		2010			2011		2010
Provision for income taxes:
Continuing operations	$	2,378	$	3,353		$	5,587	$	9,652
Discontinued operations		—		(401	)		—		(855	)
Provision for income taxes	$	2,378	$	2,952		$	5,587	$	8,797

The Company’s full-year forecasted effective income tax rate for continuing operations was 37.5% and 39.0% for the nine months ended September 30, 2011 and 2010, respectively. The variances between the U.S. federal statutory rate of 35% and the Company’s forecasted effective income tax rate for the nine months ended September 30, 2011 and 2010 is primarily due to state income taxes and permanent items that are not deductible for U.S. tax purposes. Positively impacting the Company’s full-year forecasted effective income tax rate for the nine months ended September 30, 2011 was the Company’s ability to utilize foreign tax credits totaling $1.0 million. Partially offsetting the benefit derived from utilizing the foreign tax credits was approximately $0.7 million of non-deductible acquisition related costs. Negatively impacting the Company’s full-year forecasted effective income tax rate for the nine months ended September 30, 2010 was approximately $0.8 million of non-deductible acquisition related costs partially offset by the reversal of a portion of the Company’s valuation allowance related to foreign tax credits totaling $0.3 million. As a comparison, the Company’s actual effective income tax rate for continuing operations for the year ended December 31, 2010 was 39.0%. This included non-deductible acquisition related costs totaling $0.8 million, partially offset by the reversal of a portion of the Company’s valuation allowance related to foreign tax credits totaling $0.5 million.

The difference between the Company’s September 30, 2011 full-year forecasted effective income tax rate of 37.5% and the Company’s tax expense recorded in its Condensed Consolidated Statement of Income for the nine months ended September 30, 2011 relates to the Company’s ability to utilize foreign tax credits totaling $1.1 million in addition to the impact of certain statute of limitations expirations totaling $0.2 million.

As of September 30, 2011 and December 31, 2010, the Company’s reserve for uncertain tax positions totaled approximately $2.3 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 September 30, 2011 and December 31, 2010, the Company’s reserves for interest and penalties related to uncertain tax positions totaled approximately $0.4 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 collected and recorded during the third quarter of 2011 an aggregate net recovery of approximately $1.3 million from one of the major local jurisdictions in which it operates related to a non-income related tax for several prior tax periods.