INCOME TAXES

9 Months Ended

Sep. 30, 2012

INCOME TAXES

INCOME TAXES

NOTE 5.  INCOME TAXES

We continue to maintain full valuation allowances on the tax benefits of the net deferred tax assets related to tax loss carryforwards as well as other deferred tax assets for our business entities in the United States, United Kingdom, Germany, Netherlands, and Canada.

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 our 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 21.3% and 22.1% for the three and nine months ended September 30, 2012, respectively.

The tax years 2009 to 2011 remain open to examination by the United States taxing authorities. For the other jurisdictions where we have business operations (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.

As of September 30, 2012, we have recorded a liability for uncertain tax positions of $2.5 million (including accrued interest and penalties of $0.9 million), the majority of which would impact our effective rate if recognized.  The increase to the liability for uncertain tax positions was $0.1 million and $0.2 million, respectively, for the three and nine months ended September 30, 2012, and primarily consisted of accruals for interest and penalties.