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Income Taxes
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9 Months Ended |
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Sep. 30, 2012
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| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company’s effective tax rate differs from the statutory rate primarily as a result of state taxes, foreign taxes, nondeductible stock option expenses and changes in the Company’s valuation allowance. During the nine months ended September 30, 2012, the Company recorded an income tax expense of $611 compared to an expense of $2,739 during the same period in 2011, representing a decrease of $2,128. The decrease was primarily due to a benefit from the change in California apportionment methodology during the quarter ended March 31, 2012 which reduced the Company's effective state tax rate compared to the prior period. In addition, the company settled various international tax matters concerning certain tax filings in 2008, 2009, and 2010 that provided an additional tax benefit during the quarter ended June 30, 2012 of approximately $300. The Company reduces its deferred tax assets resulting from future tax benefits by a valuation allowance if, based on the weight of the available evidence it is more likely than not that some portion or all of these deferred taxes will not be realized. The timing of the reversal of deferred tax liabilities associated with tax deductible goodwill is not certain and thus not available to assure the realization of deferred tax assets. Due to the limitation associated with deferred tax liabilities from tax deductible goodwill, the Company has deferred tax assets in excess of deferred tax liabilities before application of a valuation allowance for the periods presented. As the Company has insufficient history of generating book income, the ultimate future realization of these excess deferred tax assets is not more likely than not and thus subject to a valuation allowance. Accordingly, the Company has established a valuation allowance against its deferred tax assets. The Company is subject to the accounting guidance for uncertain income tax positions. The Company believes that its income tax positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on the Company's financial condition, results of operations, or cash flow. The Company acquired an $84 uncertain tax position as a result of a business acquisition during 2011. The Company's policy for recording interest and penalties associated with audits and uncertain tax positions is to record such items as a component of income tax expense, and amounts recognized to date are insignificant. No uncertain income tax positions were recorded during the nine months ended September 30, 2011 or 2012 other than the acquired uncertain tax position, and the Company does not expect its uncertain tax position to change materially during the next twelve months. The Company files a U.S. federal and many state tax returns as well as tax returns in multiple foreign jurisdictions. All tax years since the Company's incorporation remain subject to examination by the IRS and various state authorities. |