INCOME TAXES

Components of the provision for income taxes and the income to which it relates for the years ended December 31, 2012, 2011 and 2010 consist of the following (in thousands):



	Year Ended December 31,
	2012		2011		2010
Income from continuing operations before income taxes	$	122,611	$	107,681	$	79,932

Current income taxes:
Federal	$	17,554	$	16,698	$	13,470
Foreign	19,748		17,304		12,606
State and local	962		749		710
	38,264		34,751		26,786
Deferred income taxes	3,242		2,407		1,844
Provision for income taxes	$	41,506	$	37,158	$	28,630

The provision for income taxes related to discontinued operations was a $402,000 benefit, $4,792,000 expense and $2,680,000 expense for the years ended December 31, 2012, 2011 and 2010, respectively.

The principal current and non-current deferred tax assets and liabilities consist of the following at December 31, 2012, and 2011 (in thousands):



	December 31,
	2012			2011
Deferred tax assets:
Cumulative foreign translation adjustment	$	3,447		$	7,091
Interest accrual on pawn forfeits	1,365			931
Foreign tax credits	—			304
Other	495			852
Total deferred tax assets	5,307			9,178

Deferred tax liabilities:
Intangible asset amortization	15,823			13,855
Share-based compensation	1,101			97
Other	510			467
Total deferred tax liabilities	17,434			14,419

Net deferred tax liabilities	$	(12,127	)	$	(5,241	)

Reported as:
Current deferred tax assets	$	1,148		$	1,078
Non-current deferred income tax liabilities	(13,275		)	(6,319		)
Net deferred tax liabilities	$	(12,127	)	$	(5,241	)

The effective rate on income from continuing operations differs from the U.S. federal statutory rate of 35%. The following is a reconciliation of such differences (in thousands):



	Year Ended December 31,
	2012			2011			2010
Tax at the U.S. federal statutory rate	$	42,914		$	37,688		$	27,976
State income taxes, net of federal tax benefit of $337, $262 and $249, respectively	625			487			462
Additional foreign tax credit claimed from prior periods	(778		)	—			—
Other taxes and adjustments, net	(1,255		)	(1,017		)	192
Provision for income taxes	$	41,506		$	37,158		$	28,630

The Company reviews the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Interest and penalties related to income tax liabilities that could arise would be classified as interest expense in the Consolidated Statements of Income. There were no such interest or penalties for the fiscal years ended December 31, 2012, 2011 and 2010.

As of December 31, 2012, and 2011, the Company had no unrecognized tax benefits and, therefore, the Company did not have a liability for accrued interest and penalties. The Company does not believe that its unrecognized tax benefits will significantly change over the next twelve months.

The Company files federal income tax returns in the United States and Mexico, as well as multiple state and local income tax returns in the United States. The Company's U.S. federal income tax returns for the years ended December 31, 2006, 2007, and 2008 are currently being examined by the U.S. Internal Revenue Service. There have been no adjustments proposed. The Company's U.S. federal returns are not subject to examination for tax years prior to 2006. The Company's state income tax returns are not subject to examination for the tax years prior to 2009 with the exception of three states, which are not subject to examination for tax years prior to 2008. With respect to Mexico, the tax years prior to 2007 are closed to examination.