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Income Taxes
6 Months Ended
Jun. 30, 2012
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

Our quarterly income tax (provision) benefit for income taxes is measured using an estimated annual effective tax rate for the period, adjusted for discrete items that occurred within the periods presented.

For the three and six months ended June 30, 2012, we recorded an income tax (provision) of $(4.7) million and $(3.5) million, respectively, which represents an effective tax rate of 8.2% and 3.1%, respectively. The effective tax rate for the three and six months ended June 30, 2012 differs from the federal statutory rate of 35.0% primarily due to changes in recorded valuation allowances, the impact of state income taxes and changes in deferred tax liabilities related to the stock basis of subsidiaries.

The Debt Repurchases resulted in a tax gain of $71.7 million and $141.5 million for the three and six months ended June 30, 2012, respectively. Generally, the discharge of a debt obligation for an amount less than the adjusted issue price creates cancellation of debt income ("CODI"), which must be included in the taxpayer's taxable income. However, in accordance with Internal Revenue Code ("IRC") Section 108, in lieu of recognizing taxable income from CODI, the Company is required to reduce existing tax attributes. As a result, the Company recognized an estimated decrease in deferred tax assets relating to net operating losses and the basis of amortizable and depreciable property of approximately $24.4 million and $51.7 million for the three and six months ended June 30, 2012, respectively. These decreases were offset by a decrease in recorded valuation allowance during the three and six months ended June 30, 2012.

The estimated annual effective tax rate for the current year includes an estimate of the change in the valuation allowance expected to be necessary at the end of the year. The Company recorded a decrease in the valuation allowance during the three and six months ended June 30, 2012 as a result of the Debt Repurchases (discussed above). In addition, the valuation allowance was decreased during the six months ended June 30, 2012 as a result of the reduction in estimated useful lives of certain intangible assets as discussed in Note 2, "Summary of Significant Accounting Policies - Identifiable Intangible Assets," which was a change in circumstances that resulted in a change in judgment about the Company's ability to realize deferred tax assets in future years. The resulting decrease in income tax expense allocated to the three and six months ended June 30, 2012 relating to the changes in valuation allowance is $17.1 million and $42.7 million, respectively, which reduces our effective tax rate for the three and six months ended June 30, 2012 by approximately 29.6% and 37.5%, respectively.

For the three and six months ended June 30, 2011, we recorded an income tax benefit of $163.7 million and $143.5 million, respectively, which represents an effective tax rate of 21.4% and 20.8%, respectively. The effective tax rate for the three and six months ended June 30, 2011 differs from the federal statutory rate of 35.0% primarily due to non-deductible goodwill impairment, changes in deferred tax liabilities related to the stock basis of subsidiaries, changes in recorded valuation allowances and decreases in the liability for unrecognized tax benefits.

The Company recorded a goodwill impairment charge of $801.1 million for the three and six months ended June 30, 2011, of which $457.2 million related to non-deductible goodwill. Impairment of non‑deductible goodwill reduced the income tax benefit of the impairment by $174.1 million and reduced our effective tax rate by approximately 22.7% and 25.2% for the three and six months ended June 30, 2011, respectively.

Upon emergence from bankruptcy, the Company recorded deferred tax liabilities related to the excess of the financial statement carrying amount over the tax basis of investments in certain subsidiaries. The estimated annual effective tax rate for the current year includes an estimate of the change in these deferred tax liabilities for the year. The goodwill impairment charge reduced the financial statement carrying amount of investments in certain subsidiaries, which caused a reduction in these deferred tax liabilities. The resulting reduction in income tax expense for the three and six months ended June 30, 2011 relating to the change in these deferred tax liabilities was $72.5 million and $78.9 million, respectively, which increased the effective tax rate for the three and six months ended June 30, 2011 by approximately 9.5% and 11.4%, respectively.

The estimated annual effective tax rate for 2011 included an estimate of the valuation allowance expected to be necessary at the end of the year for originating deferred tax assets. The goodwill impairment charge gave rise to a deferred tax asset whose realization did not meet a more-likely-than-not threshold, requiring a valuation allowance. The resulting increase in income tax expense for the three and six months ended June 30, 2011 relating to the change in valuation allowance is $47.2 million and $46.6 million, respectively, which reduced the effective tax rate for the three and six months ended June 30, 2011 by approximately 6.2% and 6.8%, respectively.

During the three months ended June 30, 2011, the federal statute of limitations relating to a previously unrecognized tax position for revenue recognition closed. The Company has decreased its liability for unrecognized tax benefits associated with this federal and state uncertain tax position by $28.2 million and recorded a net tax benefit of $24.0 million for both the three and six months ended June 30, 2011, respectively, which increased the effective tax rate for the three and six months ended June 30, 2011 by approximately 3.1% and 3.5%, respectively.