Income Taxes

3 Months Ended

Mar. 31, 2013

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 March 31,
	2013			2012
Current:
Federal	$	5		$	7
State and local		29			17
Total Current		34			24
Deferred:
Federal	$	—		$	—
State and local		—			—
Total Deferred		—			—
Income tax expense	$	34		$	24
Effective income tax rate		2.8	%		0.6	%

Our effective tax rate for the three months ended March 31, 2013 is impacted by a full valuation allowance against all of our deferred tax assets, net of deferred tax liabilities.

As of March 31, 2013 and December 31, 2012, 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 months ended March 31, 2013. Income tax expense for the three months ended March 31, 2013 and 2012 includes interest on unrecognized tax benefits and state taxes in certain jurisdictions.

During the three months ended March 31, 2013, 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 expense. The total amount of unrecognized tax benefits at both March 31, 2013 and December 31, 2012 was $508,000. 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.