Income Taxes

9 Months Ended

Sep. 30, 2012

Income Taxes [Abstract]

Income Taxes

Note 8 – Income Taxes

Management estimates the annual effective income tax rate quarterly, based on current annual forecasted results. Items unrelated to current year ordinary income are recognized entirely in the period identified as a discrete item of tax. The quarterly income tax provision is comprised of tax on ordinary income provided at the most recent estimated annual effective tax rate, increased or decreased for the tax effect of discrete items.

For the nine months ended September 30, 2012 and 2011, the estimated annual effective tax rate applied to ordinary income was 36.3% and 36.9%, respectively. The effective tax rate for the nine months ended September 30, 2012, which reflects federal and state taxable income, includes a net discrete tax benefit of $0.9 million for state income taxes and research and development tax credits, partially offset by a net operating loss carryback. Including the effect of the discrete tax items, the Company’s effective tax rate for the nine months ended September 30, 2012 was 31.7%. The effective tax rate for the nine months ended September 30, 2011 was 37.0%. For the three months ended September 30, 2012 and 2011, the Company’s effective tax rate was 32.7% and 41.6%, respectively. The effective tax rate for the three months ended September 30, 2012 includes a discrete tax benefit of $0.3 million for a change in state income tax apportionment rates.