Income Taxes

9 Months Ended

Sep. 30, 2012

Income Taxes [Abstract]

Income Taxes

4. Income Taxes

The following table presents the components of our income tax expense for the following periods (dollars in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
Current:
Federal	$	6		$	7		$	19		$	18
State and local		16			25			51			131
Total Current		22			32			70			149
Deferred:
Federal	$	—		$	—		$	—		$	—
State and local		—			—			—			—
Total Deferred		—			—			—			—
Income tax expense	$	22		$	32		$	70		$	149
Effective income tax rate		0.6	%		0.9	%		2.5	%		3.4	%

Our effective tax rate for the three and nine month periods ended September 30, 2012 is impacted by a full valuation allowance against all of our deferred tax assets, net of deferred tax liabilities.

As of September 30, 2012 and December 31, 2011, the net deferred tax assets are offset by full valuation allowances because it is not more-likely-than-not that we will realize our deferred tax assets. We did not record the related tax benefits in the United States and state jurisdictions during the three and nine month periods ended September 30, 2012. Income tax expense for the three and nine months ended September 30, 2012 and 2011 includes interest on unrecognized tax benefits and state taxes in certain jurisdictions.

During the three and nine month periods ended September 30, 2012, there were no significant changes to the liability for unrecognized tax benefits. All interest and penalties related to unrecognized tax benefits are recorded as a component of income tax. The total amount of unrecognized tax benefits at each of September 30, 2012 and December 31, 2011 was $610,000 and $614,000, respectively. It is reasonably possible that the amount of the total unrecognized tax benefits may change in the next 12 months. However, we do not believe that any anticipated change will be material to the Condensed Consolidated Financial Statements.