9. Income Taxes

The following summarizes our income tax provision on income from continuing operations (in thousands):


	Three Months Ended March 31,
	2013		2012
Total current income tax (provision) benefit	$	(838)	$	1,873
Total deferred income tax provision		(1,977)		(5,095)
Income tax provision on income from continuing operations	$	(2,815)	$	(3,222)

Subsequent to the Sale, to the extent that Loral’s profitability from operations is not sufficient to realize the benefit from our remaining net deferred tax assets, the Company would generate sufficient taxable income from the appreciated value of its Telesat investment, which currently has a nominal tax basis, in order to prevent its federal net operating losses from expiring and realize the benefit of all remaining deferred tax assets.

The following summarizes amounts for uncertain tax positions (“UTPs”) included in our income tax provision (in thousands):


	Three Months Ended March 31,
	2013		2012
Current (provision) benefit for UTPs	$	(447)	$	1,873
Deferred benefit (provision) for UTPs		139		(470)
(Provision) benefit for UTPs on income from continuing operations	$	(308)	$	1,403

As of March 31, 2013, we had unrecognized tax benefits relating to UTPs of $76.3 million. Pursuant to the Purchase Agreement for the Sale, we are obligated to indemnify SS/L from liabilities with respect to certain taxes related to periods prior to the closing of the transaction. The Company recognizes potential accrued interest and penalties related to UTPs in income tax expense on a quarterly basis. As of March 31, 2013, we have accrued approximately $2.9 million and $9.5 million for the payment of potential tax-related interest and penalties, respectively.

With few exceptions, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for years prior to 2007. Earlier years related to certain foreign jurisdictions remain subject to examination. Various state and foreign income tax returns are currently under examination. However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses were generated and carried forward, and make adjustments up to the amount of the net operating loss carryforward. While we intend to contest any future tax assessments for uncertain tax positions, no assurance can be provided that we would ultimately prevail. During the next 12 months, the statute of limitations for assessment of additional tax will expire with regard to UTPs related to our federal income tax return filed for 2009 and state income tax returns filed for 2007, 2008 and 2009 potentially resulting in a $1.0 million reduction to our unrecognized tax benefits.

The following summarizes the changes to our liabilities for UTPs included in long-term liabilities in the condensed consolidated balance sheets (in thousands):


	Three Months Ended March 31,
	2013		2012
Liabilities for UTPs:
Opening balance — January 1	$	80,732	$	139,916
Current provision (benefit) for:
Unrecognized tax benefits		581		(7)
Potential additional interest		405		1,486
Potential penalty adjustment		27		7
Statute expirations		(566)		(948)
Ending balance — March 31	$	81,179	$	140,454

As of March 31, 2013, if our positions are sustained by the taxing authorities, approximately $38.2 million of the benefits will reduce the Company’s income tax provision from continuing operations. Other than as described above, there were no significant changes to our uncertain tax positions during the three months ended March 31, 2013 and 2012, and we do not anticipate any other significant changes to our unrecognized tax benefits during the next twelve months.