Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes

Income Taxes

14. Income Taxes

We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax basis of assets and liabilities using enacted tax rates in effect for years in which the temporary differences are expected to reverse. We provide a valuation allowance when it is more likely than not that deferred tax assets will not be realized.  We recognize the benefit of an uncertain tax position that has been taken or we expect to take on income tax returns if such tax position is more likely than not to be sustained.

We continue to maintain a valuation allowance against certain other deferred tax assets where realization is not certain.  We periodically evaluate the likelihood of the realization of deferred tax assets and reduce the carrying amount of these deferred tax assets by a valuation allowance to the extent we believe a portion will not be realized. 

The following table provides a comparative summary of our provision for income taxes and effective tax rate for the three and six months ended June 30, 2011 and 2010, respectively:

	Three months ended		Six months ended
	June 30,		June 30,
	2011	2010	2011	2010
Provision for income taxes	$    14,342	$    10,310	$           28,338	$    19,449
Effective tax rate	29.2%	32.1%	31.5%	31.3%

The tax provision for the three and six months ended June 30, 2011 and 2010 is principally attributable to the U.S. federal, state and foreign income taxes on our profitable operations.

We are in the process of assessing the potential impact that elections of certain Federal Foreign Tax Credits and Federal Orphan Drug Credits would have on our historical tax returns.  Both the Foreign Tax Credit and the Orphan Drug Credits are elective for U.S. Federal income tax purposes and, to date, we have not elected to take certain of these credits in our historical tax returns.  Upon completion of our assessment, at the Company's election, these credits could potentially result in a tax benefit to the Company.  Any benefit related to prior tax years would be recorded in the quarter when management commits to make the election and the amounts can be reasonably estimated.  We anticipate that this assessment will be completed no later than the end of fourth quarter of 2011.