13.

Income Taxes

At the end of each interim period, we are required to estimate our annual effective tax rate for the fiscal year and use that rate to provide for income taxes for the current year-to-date reporting period. Due to the effects of the deferred tax valuation allowance and changes in unrecognized tax benefits, our effective tax rates in 2013 and 2012 are not meaningful as the income tax benefit is not directly correlated to the amount of pretax income or loss. The income tax expense of $0.1 million during the three months ended March 31, 2013 and the income tax benefit of $0.1 million during the three months ended March 31, 2012 were not material to our operations.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is recorded against a deferred tax asset if, based on the weight of available evidence, it is more-likely-than-not (a likelihood of more than 50%) that some portion, or all, of the deferred tax asset will not be realized. At March 31, 2013 and December 31, 2012, we had a full valuation allowance recorded against our net deferred tax asset. Future realization of our deferred tax assets ultimately depends upon the existence of sufficient taxable income in the carryforward periods under the tax laws. We will continue analyzing, in subsequent reporting periods, the positive and negative evidence in determining the expected realization of our deferred tax assets.

The components of our net deferred tax asset were as follows:


	March 31,			December 31,
	2013			2012
Deferred tax assets:	(Dollars in thousands)
Federal net operating loss carryforwards	$	123,310		$	129,695
State net operating loss carryforwards		48,902			49,551
Alternative minimum tax and other tax credit carryforwards		11,353			10,988
Stock-based compensation expense		28,978			29,196
Warranty, litigation and other reserves		14,610			14,556
Deferred compensation retirement plans		11,682			11,252
Asset impairment charges		11,441			14,080
Inventory, additional costs capitalized for tax purposes		4,022			3,930
Other, net		1,627			2,063

Total deferred tax assets		255,925			265,311
Valuation allowance		(238,795	)		(248,306	)

Total deferred tax assets, net of valuation allowance		17,130			17,005

Deferred tax liabilities:
Property, equipment and other assets		5,714			5,753
Discount on notes receivable		4,204			4,204
Deferred revenue		2,974			3,796
Unrealized gain on marketable securities		2,853			1,863
Other, net		1,385			1,389

Total deferred tax liabilities		17,130			17,005

Net deferred tax asset	$	-		$	-