12. Income Taxes

For the three months ended March 31, our income tax provision is summarized as follows: (i) for 2012, we recorded a current tax provision of $0.6 million (which included a provision of $0.5 million to increase our liability for uncertain tax positions ("UTPs")) and a deferred tax provision of $6.0 million (which included a benefit of $0.2 million for UTPs), resulting in a total provision of $6.6 million on pre-tax income of $7.3 million and (ii) for 2011, we recorded a current tax benefit of $1.6 million (which included a net benefit of $2.6 million to decrease our liability for UTPs) and a deferred tax provision of $17.0 million (which included a benefit of $0.7 million for UTPs), resulting in a total provision of $15.4 million on a pre-tax income of $36.9 million.

As of March 31, 2012, we had unrecognized tax benefits relating to UTPs of $115 million. The Company recognizes potential accrued interest and penalties related to UTPs in income tax expense on a quarterly basis. As of March 31, 2012, we have accrued approximately $30.3 million and $24.3 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 twelve months, the statute of limitations for assessment of additional tax will expire with regard to UTPs related to Old Loral, as well as several of our federal and state income tax returns filed for 2007 and 2008, potentially resulting in a $60.4 million reduction to our unrecognized tax benefits. This reduction would provide an $86 million benefit to our income tax provision, including the reversal of applicable interest and penalties previously accrued.

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,
	2012			2011
Liabilities for UTPs:
Opening balance — January 1	$	139,916		$	122,857
Current provision (benefit) for:
Unrecognized tax benefits		(7	)		(92	)
Potential additional interest		1,486			1,292
Potential additional penalties		7			355
Statute expirations		(948	)		(942	)
Tax settlements		—			(3,257	)

Ending balance — March 31	$	140,454		$	120,213

As of March 31, 2012, if all of our positions are sustained by the taxing authorities, the Company's future income tax provisions would be reduced by approximately $108 million. Other than as described above, there were no significant changes to our uncertain tax positions during the three months ended March 31, 2012 and 2011, and we do not anticipate any other significant changes to our unrecognized tax benefits during the next twelve months.