INCOME TAXES

6 Months Ended

Jun. 30, 2011

INCOME TAXES

INCOME TAXES

NOTE 5.  INCOME TAXES

We continue to maintain a full valuation allowance on the net deferred tax assets in our subsidiaries in the United States, the United Kingdom, Germany, and Canada, related to tax loss carryforwards in those jurisdictions and other deferred tax assets of those entities.

Each quarter, we estimate our full year effective tax rate for jurisdictions not subject to valuation allowances based upon our most recent forecast of full year anticipated results and adjust year-to-date tax expense to reflect our full year anticipated tax rate.  The rate is an estimate based upon projected results for the year, estimated annual permanent differences, the statutory tax rates in the various jurisdictions in which we operate, and the non-recognition of tax benefits for entities with full valuation allowances.  The overall effective tax rates were 28.1% and 31.3% for the three months and six months periods ended June 30, 2011, respectively.  The effective tax rate for the three and six months ended June 30, 2011 differ from the U.S. statutory rate primarily due to no tax benefit being recorded for certain entities in a loss position for which a full valuation allowance has been recorded.

The tax years 2007 to 2010 remain open to examination by United States taxing authorities. Tax years between 2005 and 2010 generally remain open to routine examinations by foreign taxing authorities in our other major jurisdictions, including Switzerland, United Kingdom, Taiwan, Germany, Canada, and China.

At June 30, 2011 and December 31, 2010, we had a $2.3 million and $2.1 million liability, respectively, recorded for uncertain income tax positions, both of which included interest and penalties of approximately $0.9 million.  If recognized, the uncertain tax benefits, with related penalties and interest at June 30, 2011 and December 31, 2010, would be recorded as a benefit to income tax expense on the consolidated statement of operations.