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INCOME TAXES
 6 Months Ended
Jun. 30, 2012
INCOME TAXES
9. INCOME TAXES

 

The Company has experienced cumulative operating losses over the most recent three year period. After considering these operating losses and other available evidence, both positive and negative, management determined that it was necessary to continue to record a full valuation allowance against its net deferred tax assets as of June 30, 2012.

 

As detailed in Note 2, the acquisition of Walker, on May 8, 2012, created goodwill in the amount of $151.5 million which will have an indefinite life for book purposes. However, for tax purposes the value of this goodwill will be fully deductible over 15 years. This book to tax difference will create a deferred tax liability which, according to ASC 740, cannot be netted against other deferred tax assets and liabilities with specific identifiable lives and offset by the valuation allowance. As a result, a deferred tax liability and deferred tax expense of $0.7 million was recognized for the three month period ending June 30, 2012.