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Income Taxes
9 Months Ended
Sep. 30, 2012
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
For the three and nine months ended September 30, 2012, income tax expense attributable to continuing operations was $20,121 and $70,989, respectively, representing an effective tax rate of 36% and 37%, respectively. The effective tax rate differs from the federal statutory rate of 35% due primarily to state and local income tax expense of $1,147 and $4,210, for the three and nine months ended September 30, 2012, respectively, and tax expense of $1,544 related to uncertain tax positions, including accrued interest, for the nine months ended September 30, 2012, partially offset by a tax benefit of $570 and $2,370 resulting from a decrease in the valuation allowance with regard to certain local income tax credit carry forwards, for the three and nine months ended September 30, 2012, respectively.
For the three and nine months ended September 30, 2011, income tax expense attributable to continuing operations was $22,440 and $65,388, respectively, representing an effective tax rate of 36% and 40%, respectively. The effective tax rate differs from the federal statutory rate of 35% due primarily to state and local income tax expense of $1,272 and $6,562, tax expense of $839 and $2,908 related to uncertain tax positions, including accrued interest, partially offset by a tax benefit of $2,674 and $2,182 resulting from a decrease in the valuation allowance with regard to certain local income tax credit carry forwards, for the three and nine months ended September 30, 2011, respectively.
At September 30, 2012, the Company had foreign tax credit carry forwards of approximately $17,000, expiring on various dates from 2014 through 2022. For the nine months ended September 30, 2012, the utilization of the remaining federal net operating loss carry forwards (“NOLs”) and alternative minimum tax credit carry forwards reduced current deferred income tax assets by $50,000 and $2,300, respectively. In addition, for the nine months ended September 30, 2012, excess tax benefits of $7,259 relating to share-based compensation awards and $3,210 relating to amortization of tax deductible second component goodwill were realized as a reduction in tax liability (as determined on a 'with-and-without' approach) and recorded as an increase to paid-in capital and a decrease in goodwill, respectively.
Under the Company's Tax Disaffiliation Agreement with Cablevision, Cablevision is liable for all income taxes of the Company for periods prior to the Distribution except for New York City Unincorporated Business Tax. A deemed capital distribution, net of $2,596 was recorded for the nine months ended September 30, 2012 to reflect true-ups as of the Distribution date for utilization of Cablevision's NOLs and for adjustments to deferred tax assets and liabilities as a result of the Distribution. The City of New York is currently auditing the Company's Unincorporated Business Tax Returns for the years 2006 through 2008.