Income Taxes

Income tax expense (benefit) from continuing operations for the years ended December 31, 2013, 2012, and 2011 consisted of the following (dollars in thousands):



	2013			2012			2011
Current income tax (benefit) expense
Federal	$	—		$	(411	)	$	(901	)
State and local	2,987			3,076			1,100
Total current income tax expense	$	2,987		$	2,665		$	199

Deferred tax benefit
Federal	$	(65,330	)	$	(22,487	)	$	(8,651	)
State and local	(6,121		)	(14,848		)	(2,807		)
Total deferred tax benefit	(71,451		)	(37,335		)	(11,458		)
Total income tax benefit	$	(68,464	)	$	(34,670	)	$	(11,259	)

Total income tax expense (benefit) from continuing operations differed from the amount computed by applying the federal statutory tax rate of 35.0% for the years ended December 31, 2013, 2012 and 2011 due to the following (dollars in thousands)



	2013			2012			2011
Pretax loss at federal statutory rate	$	(8,698	)	$	(51,311	)	$	(10,361	)
State income tax (benefit) expense, net federal (benefit) expense	(209		)	4,347			(2,383		)
Acquisition costs	399			—			1,510
Change in state tax rates	296			(10,985		)	(1,523		)
Section 162 disallowance	140			1,438			335
Book gain on equity investment	—			—			(4,073		)
Impairment charges on goodwill with no tax basis	—			35,000			—
(Decrease) increase in valuation allowance	(61,512		)	(12,812		)	4,996
Other	1,120			(347		)	240
Net Income tax benefit	$	(68,464	)	$	(34,670	)	$	(11,259	)

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2013 and 2012 are presented below (dollars in thousands):



	2013			2012
Current deferred tax assets:
Accounts receivable	$	1,501		$	1,613
Accrued expenses and other current liabilities	3,690			1,896
Net operating loss	41,469			45,564
Current deferred tax assets	46,660			49,073
Less: valuation allowance	(3,562		)	(23,928		)
Net current deferred tax assets	43,098			25,145
Noncurrent deferred tax assets:
Intangible and other assets	—			43,185
Property and equipment	—			6,207
Advertising relationships	7,037			10,689
Other liabilities	16,281			12,216
AMT tax credit	5,037			—
Net operating loss	145,056			238,176
Noncurrent deferred tax assets	173,411			310,473
Less: valuation allowance	(13,240		)	(147,125		)
Net noncurrent deferred tax assets	160,171			163,348
Noncurrent deferred tax liabilities:
Intangible assets	536,351			570,856
Property and equipment	47,083			54,465
Cancellation of debt income	74,396			94,257
Other	2,847			3,688
Noncurrent deferred tax liabilities	660,677			723,266
Net noncurrent deferred tax liabilities	500,506			559,918
Net deferred tax liabilities	$	457,408		$	534,773

Deferred tax assets and liabilities are computed by applying the federal and state income tax rates in effect to the gross amounts of temporary differences and other tax attributes, such as net operating loss carry-forwards. In assessing if the deferred tax assets will be realized, the Company considers whether it is more likely than not that some or all of these deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which these deductible temporary differences reverse.

As of December 31, 2013, the Company believes that it is more likely than not that all but $16.8 million of its deferred tax assets relating to state net operating loss carryforwards will be realized. As such, the Company recorded a deferred tax benefit related to the release of its valuation allowance of $135.0 million for the year ended December 31, 2013. $69.5 million of the total deferred tax benefit relates to the change in judgment about the future realization of deferred tax assets available at the beginning of the year and $65.5 million is the result of the consumption of federal and state net operating losses during the year; primarily the result of taxable income related to the sale of assets to Townsquare Media. In accordance with the intraperiod tax allocation rules, $61.5 million of the tax deferred tax benefit has been allocated to continuing operations with the remainder being allocated to discontinued operations.

At December 31, 2013, the Company has federal net operating loss carry forwards available to offset future income of approximately $464.0 million which will expire in the years 2030 through 2032. At December 31, 2013, the Company has state net operating loss carry forwards available to offset future income of approximately $2.0 billion which will expire in the years 2015 through 2032. In addition to the federal and state net operating loss carry forwards noted above, approximately $1.1 million of net operating loss carry forwards relate to windfall tax benefits associated with the Company's equity based compensation plan that will benefit additional paid in capital when realized. The Company's policy is to treat these equity based net operating loss carry forwards as the last net operating loss carry forwards to be consumed.

The Company records interest and penalties related to unrecognized tax benefits in current income tax expense. Of this amount $0.2 million was recorded to expense in 2013. The total interest and penalties accrued at December 31, 2013 was $4.1 million. The total unrecognized tax benefits and accrued interest and penalties at December 31, 2013 was $19.0 million. Of this total, $19.0 million represents the unrecognized tax benefits and accrued interest and penalties that, if recognized, would favorably affect the effective income tax rate in future periods. Approximately $19.0 million relates to items which are not expected to change significantly within the next 12 months. Substantially all federal, state, local and foreign income tax returns have been closed for the tax years through 2009; however, the various tax jurisdictions may adjust the Company’s net operating loss carry forwards. The following table reconciles unrecognized tax benefits during the relevant years:



Balance at January 1, 2011	$	12,454
Decreases due to tax positions taken during 2012	(169		)
Balance at December 31, 2012	$	12,285
Increases for tax positions related to the WestwoodOne acquisition	2,603
Balance at December 31, 2013	$	14,888