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Income Taxes
6 Months Ended
Jun. 30, 2012
Income Tax Disclosure [Abstract]  
Income Taxes
INCOME TAXES
The Company determines income taxes using the asset and liability approach which results in the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amount and the tax basis of those assets and liabilities, as well as operating loss and tax credit carryforwards, using enacted tax rates in effect in the years in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets and liabilities are recorded on a jurisdictional basis.
At June 30, 2012, the Company has net operating loss carryforwards (NOLs), which expire at various times in years 2012 through 2030. The Company has reviewed its net deferred tax assets and has provided a valuation allowance to reflect the estimated amount of net deferred tax assets which management considers, more likely than not, will not be realized. Included in the provision for income taxes at June 30, 2012 is a $0.9 million adjustment for AMT. This adjustment is a result of a decrease in depreciation recorded for tax purposes in 2011. The Company recognized an income tax provision of $5.7 million in the second quarter of 2011. The Company has AMT net operating loss carry-forwards, and anticipates that all of its 2012 AMT income estimated at $48.7 million will be subject to offset by available AMT NOLs. Changes in the Company’s net deferred tax assets and liabilities have been offset by a corresponding change in the valuation allowance.
The Company’s policy is to recognize interest and penalties on unrecognized tax benefits in Income tax provision in the Consolidated Statements of Operations and Comprehensive Income. There were no interest or penalties for the three- and six- month periods ended June 30, 2012 and 2011. Tax years still open for examination by the taxing authorities are the years ending December 31, 2011, 2010, and 2009.