Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes

Income Taxes

(12)  Income Taxes

We are subject to income taxes in both the United States and the non-U.S. jurisdictions in which we operate. Income tax expense (benefit) for the three- and six-month periods ended June 30, 2011 and 2010 consisted of the following:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011			2010		2011			2010
	(Dollars in thousands)
State current income tax expense (benefit)	$	70		$	242	$	(297	)	$	544
Federal current income tax expense	137			171		137			171
Foreign current income tax expense	1,412			564		1,938			585
Foreign deferred income tax expense (benefit)	(595		)	228		(152		)	(581		)
Total	$	1,024		$	1,205	$	1,626		$	719

The Company recognizes deferred tax assets and liabilities in both the U.S. and foreign jurisdictions based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for net operating loss and tax credit carryforwards. At June 30, 2011 and December 31, 2010, the Company had $0.6 million and $0.3 million of deferred foreign income tax liabilities (included in “Other liabilities” in our consolidated balance sheet). These deferred tax liabilities were attributable primarily to our consolidated foreign operations, and unrealized holding gains from investment securities held by a consolidated foreign subsidiary.

The Company also has a substantial amount of U.S. deferred tax assets attributable primarily to net operating loss and capital loss carryforwards for U.S. federal income tax purposes, and differences between the carrying amounts and the tax bases of Acquisition Partnership investments. At June 30, 2011 and December 31, 2010, the Company established a full valuation allowance for its U.S. deferred tax assets due to the lack of sufficient objective evidence regarding the realization of these assets in the foreseeable future. We will continue to evaluate the deferred tax asset valuation allowance balances in all of our U.S. and foreign subsidiaries throughout 2011 to determine the appropriate level of valuation allowances.