Note 11 - Income Taxes:



	Three months ended						Six months ended
($ in thousands)	June 30, 2012			June 30, 2011			June 30, 2012			June 30, 2011
Provision (benefit) for income taxes	$	28,537		$	8,859		$	33,062		$	(20,587	)
Effective tax rate	36		%	49		%	59		%	17		%

The effective tax rate for the three months ended June 30, 2012 reflects our estimate of our portion of the annual pharmaceutical manufacturer fee under the Patient Protection and Affordable Care Act, offset by benefit for tax deductions specific to U.S. domestic manufacturing companies. The effective tax rate for the six months ended June 30, 2012 reflects our estimate of the portion of loss contingencies which may not be tax deductible and by non-deductibility of our portion of the annual pharmaceutical manufacturer fee under the Patient Protection and Affordable Care Act, offset by benefit for tax deductions specific to U.S. domestic manufacturing companies. Current deferred income tax assets at June 30, 2012 consisted of temporary differences primarily related to accounts receivable reserves, accrued legal settlements and net operating loss carryforwards. Non-current deferred income tax liabilities at June 30, 2012 consisted of timing differences primarily related to intangible assets, stock options and depreciation.

Our recently acquired entity, Anchen, is currently being audited by the IRS for the tax years 2007 to 2009. We are no longer subject to IRS audit for periods prior to 2007. Anchen is also currently under audit in three state jurisdictions for the years 2005 to 2010. We are also currently under audit in one additional state jurisdiction for the years 2003 through 2006. In most other state jurisdictions, we are no longer subject to examination by state tax authorities for years prior to 2007.

We reflect interest and penalties attributable to income taxes, to the extent they arise, as a component of income tax provision or benefit.

The difference between a tax position taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to FASB ASC 740-10 Income Taxes represents an unrecognized tax benefit. An unrecognized tax benefit is a liability that represents a potential future obligation to the taxing authorities. As of June 30, 2012, we had $21,342 thousand included in “Long-term liabilities” and $949 thousand in “Accrued expenses and other current liabilities” on the condensed consolidated balance sheet that represented unrecognized tax benefits, interest and penalties based on evaluation of tax positions.