Income Tax Provision

6 Months Ended

Jun. 30, 2011

Income Tax Provision

Income Tax Provision

NOTE 11 — INCOME TAX PROVISION

During the three months and six months ended June 30, 2011, the provision for income taxes decreased to $4.4 million and $7.4 million, respectively from $11.8 million and $16.4 million in the comparable period in 2010. The effective income tax rate for the three months and six months ended June 30, 2011 was approximately 41.0% and 42.7%, respectively, as compared to 40.3% and 33.1% for the three months and six months ended June 30, 2010, respectively. The change in the provision for income taxes and the effective income tax rate is primarily a result of the decrease in the consolidated pre-tax book income and the taxes computed based on a higher ratio of year-to-date foreign losses as compared to the overall consolidated pre-tax book income for which no benefit could be taken and other discrete items impacting the quarter ended June 30, 2011. Discrete items included an increase in the income tax provision related to the write-off of deferred tax assets associated with cancelled, forfeited and expired stock options recorded during the six months ended June 30, 2011.

During the first quarter of 2011, we received examination notices from the Internal Revenue Service and the California Franchise Tax Board to audit income tax returns filed for calendar years 2008 through 2009, and 2007 through 2008, respectively.