INCOME TAXES

6 Months Ended

Jun. 30, 2012

INCOME TAXES

INCOME TAXES

NOTE 5.  INCOME TAXES

We continue to maintain a full valuation allowance on the tax benefits of our U.S., U.K., German, Netherlands, and Canadian net deferred tax assets related to tax loss carryforwards in those jurisdictions, as well as all other deferred tax assets of those entities.

Each quarter, we estimate our full year 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 result 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 20.8% and 22.7% for the three and six months ended June 30, 2012, respectively.

The tax years 2008 to 2011 remain open to examination by United States taxing authorities, and for the other jurisdictions, in which we have business operations, including Switzerland, United Kingdom, Taiwan, Germany, and China, the tax years between 2006 and 2011 generally remain open to routine examination by foreign taxing authorities, subject to the specific requirements of each jurisdiction.

The increase to the accrued liability associated with uncertain tax positions in the three and six months ended June 30, 2012 was not material.  At June 30, 2012 and December 31, 2011, we had a $2.4 million and $2.3 million liability recorded for the respective periods with respect to uncertain income tax positions, which included related interest and penalties of $0.8 million at June 30, 2012, and $0.7 million at December 31, 2011.  If recognized, the uncertain tax benefits, with related penalties and interest, would be recorded as a benefit to income tax expense on the Consolidated Statements of Operations.