INCOME TAXES (Block)

9 Months Ended

Sep. 30, 2012

Income Tax Disclosure Abstract

Income Tax Disclosure Text Block

8.       INCOME TAXES

Tax Rates For The Nine Months And Three Months Ended September 30, 2012

The effective income tax rates were36.4%and 49.2% for the nine months and three months ended September 30, 2012, respectively. Theserates were impacted by an adjustment for expenses that are not deductible for tax purposes and a tax benefit associated with a reduction in liabilities for uncertain tax positions due to the expiration of the statute of limitations in certain jurisdictions.

Tax Rates For The Nine Months And Three Months Ended September 30, 2011

The effective income tax rateswere56.3% and 51.6% for the nine months and three months ended September 30, 2011, respectively. These effective income tax rates reflect: (1) a reversal of the full valuation allowance against its deferred tax assets; and (2) certain discrete items of tax. The income tax benefit from the reversal of the full valuation allowance was offset by a prior period correction in the current period that increased deferred income tax expense by $6.0 million (see Note 8 below for further discussion).

Deferred Tax Assets And Liabilities

       As of September 30, 2012and December 31, 2011, net deferred tax liabilities were$11.4 million and$8.3 million, respectively. The income tax accounting process to determine the deferred tax liabilities involves estimating all temporary differences between the tax and financial reporting bases of the Company's assets and liabilities, based on enacted tax laws and statutory tax rates applicable to the period in which the differences are expected to affect taxable income. The Company estimated the current exposure by assessing the temporary differences and computing the provision for income taxes by applying the estimated effective tax rate to income.        

Prior Period Tax Provision Correction

Included in the nine monthsended September 30, 2011 is a prior period correctionto the year ended December 31, 2008 of$6.0 million that was made to record an incometax benefit to other comprehensive income(loss) and to increase deferred income tax expense by the same amount.  The prior period financial statements were not restated as this correctionwas considered to be immaterial to both the Company's previously reported and current results of operations and financial position and had no impact on previously reported cash flows from operating, financing or investing activities.

In addition, during the three months ended September 30, 2011, the Company noted an error related to deferred tax expense for the three months ended June 30, 2011.   As of June 30, 2011, the Companydid not reflect the federal benefit for state taxes in calculating its deferred tax assets which had the effect of understating deferred tax expense by $1.5 million.  The Company corrected this error during the three and nine months ended September 30, 2011by recognizing an additional $1.5 million in deferred tax expense in the periods. There was no impact on the tax rate for the ninemonths ended September 30, 2011. The Company recorded the correction of this error to the financial statements for the three months ended September 30, 2011 as this error was not material to the financial statements for either the three months ended September 30, 2011or the three months endedJune 30, 2011.