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Income Taxes
 6 Months Ended
Jun. 30, 2012
Income Taxes [Abstract]  
Income Taxes

Note 7 – Income Taxes

Our effective tax rate for the six months ended June 30, 2012 is equal to our expected annual tax rate of 21%. This is lower than the U.S. statutory rate of 34%, primarily due to income in foreign jurisdictions taxed at lower rates. In the first quarter of 2012, our expected annual tax rate was also estimated to be 21%.

Our effective tax rate for the six months ended June 30, 2011 was equal to our expected annual tax rate of 23%. The expected annual rate was lower than the U.S. statutory rate primarily due to income in foreign jurisdictions taxed at lower rates, offset by expected losses in the U.S., where the tax benefit for these losses was fully reserved. Actual U. S. income for the full year in 2011 was significantly higher than expected, and the valuation reserves for U.S. net operating loss (“NOL”) carryforwards were reversed in the fourth quarter of 2011.

In the first quarter of 2011, our estimated annual tax rate was 21%. The effective tax rate of 26% for the second quarter of 2011 reflected the increase in the expected annual rate.

At December 31, 2011, we had $9,907 of U.S. NOL carryforwards, of which $7,334 represents U.S. tax deductions for employee stock option gains, the tax benefit of which will be credited to additional paid in capital when the NOL carryforwards are utilized. The U.S. loss carryforwards expire in varying amounts beginning in 2022 and continuing through 2029. If certain substantial changes in the company’s ownership were deemed to have occurred, there would be an annual limitation on the amount of the U.S. NOL carryforwards that could be utilized.

 

At December 31, 2011, we had foreign NOL carryforwards of $5,535 and other foreign deductible carryforwards of $2,770. The foreign NOL carryforwards have no expiration dates and the other deductible carryforwards expire from 2016 to 2018. At December 31, 2011, we had a valuation allowance of $2,088 for certain foreign deferred tax assets.