INCOME TAXES

9 Months Ended

Sep. 30, 2011

INCOME TAXES

INCOME TAXES

NOTE 4: INCOME TAXES

As of September 30, 2011, the Company had unrecognized tax benefits of approximately $2.2 million.  The entire amount of unrecognized tax benefits would affect the effective tax rate if recognized.  As of September 30, 2011, the Company is subject to U.S. Federal income tax examinations for the tax years 2007 through 2010, and to non-U.S. income tax examinations for the tax years 2003 through 2010.  In addition, the Company is subject to state and local income tax examinations for the tax years 2003 through 2010.

The Company’s income tax provision consists of federal, state and foreign income taxes.  The tax provisions for the three and nine months ended September 30, 2011 and 2010 were based on the estimated effective tax rates applicable for the full years ending December 31, 2011 and 2010, after giving effect to items specifically related to the interim periods.  The Company’s effective tax rate was 34.0% for the three months ended September 30, 2011 and 36.3% for the three months ended September 30, 2010.  The Company’s effective tax rate was 34.7% for the nine months ended September 30, 2011 and 27.1% for the nine months ended September 30, 2010. The increase in the effective tax rate for the nine months ended September 30, 2011 was due to a $2.5 million tax benefit related to foreign tax credits that was recorded during the second quarter of 2010.  The Company’s effective tax rate is also affected by the mix of pretax income and the different effective tax rates of the tax jurisdictions in which the Company operates.