XML 100 R20.htm IDEA: XBRL DOCUMENT v2.4.0.8
Income Taxes
9 Months Ended
Sep. 30, 2014
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
For the three and nine months ended September 30, 2014, income tax expense attributable to continuing operations was $13,078 and $88,742, respectively, representing an effective tax rate of 20% and 32%, respectively. The effective tax rate differs from the federal statutory rate of 35% due to state and local income tax expense of $872 and $4,675, tax benefit from foreign subsidiary earnings indefinitely reinvested outside of the U.S. of $3,176 and $10,367, tax benefit of $5,709 and tax expense of $715 relating to uncertain tax positions (including accrued interest), tax benefit from the domestic production activities deduction of $2,990 and $8,414, tax expense of $1,930 and $5,089 resulting from an increase in the valuation allowances for foreign and local taxes partially offset by a decrease in the valuation allowance for foreign tax credits and tax benefit of $1,350 and tax expense of $802 for the effect of acquisition costs and other items for the three and nine months ended September 30, 2014. The tax benefit relating to reductions in uncertain tax positions is primarily due to an audit settlement and a re-evaluation of certain prior year positions. We believe it is reasonably possible that there will be additional changes and/or settlements relating to existing uncertain tax positions within the next twelve months, however, such amounts are not expected to be significant.
For the three and nine months ended September 30, 2013, income tax expense attributable to continuing operations was $34,784 and $155,283, respectively, representing an effective tax rate of 37% and 38%, respectively. The effective tax rate differs from the federal statutory rate of 35% due primarily to state income tax expense of $1,083 and $7,792, tax expense resulting from an increase in the valuation allowance with regard to foreign tax credit carry forwards of $1,784 and $4,172 and tax expense of $11,204 and $11,237 relating to uncertain tax positions, including accrued interest, for the three and nine months ended September 30, 2013, respectively.
At September 30, 2014, the Company had foreign tax credit carry forwards of approximately $33,000, expiring on various dates from 2014 through 2024. For the nine months ended September 30, 2014, excess tax benefits of $5,662 relating to share-based compensation awards and $1,200 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).
Under the Company's Tax Disaffiliation Agreement with Cablevision Systems Corporation ("Cablevision"), Cablevision is liable for all income taxes of the Company for periods prior to the spin-off from Cablevision except for New York City Unincorporated Business Tax. In September 2014, the Company settled a New York City Unincorporated Business tax audit for the year 2008 for $1,381, including accrued interest. The City of New York is currently auditing the Company's Unincorporated Business Tax Return for years 2009 through 2013 and the Company’s General Corporation Tax Return for years 2011 and 2012. The state of New York is currently auditing the Company’s General Business Corporation Franchise Tax Return for years 2011 and 2012. The Internal Revenue Service is currently auditing the Company's U.S. Corporation Income Tax Return for 2011.