Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Income Taxes

(14) Income Taxes

Total income taxes for the years ended December 31, 2011, 2010 and 2009 were allocated as follows:

	Years Ended December 31,
	2011			2010			2009
Income taxes from continuing operations	$	114,225		$	163,800		$	52,140
Stockholders’ equity, tax benefit related to share-based payments, net		(18,593	)		(3,097	)		(842	)
Stockholders’ equity, tax expense related to unrealized gain on held-to-maturity investment portfolio at time of transfer to available-for-sale		—			—			1,835
Stockholders’ equity, tax expense (benefit) related to unrealized gain (loss) on available-for-sale securities		6,340			(476	)		1,369

Income tax expense from continuing operations for the years ended December 31, 2011, 2010 and 2009 consists of the following:

	Current		Deferred			Total
Year ended December 31, 2011:
U.S. federal	$	98,062	$	9,641		$	107,703
State and local		7,108		(586	)		6,522
	$	105,170	$	9,055		$	114,225
Year ended December 31, 2010:
U.S. federal	$	151,953	$	(2,642	)	$	149,311
State and local		14,109		380			14,489
	$	166,062	$	(2,262	)	$	163,800
Year ended December 31, 2009:
U.S. federal	$	48,532	$	86		$	48,618
State and local		2,790		732			3,522
	$	51,322	$	818		$	52,140

Income tax expense from continuing operations differed from the amounts computed by applying the statutory U.S. federal income tax rate to income before income taxes as a result of the following:

	Years Ended December 31,
	2011				2010				2009
	Amount		%		Amount		%		Amount			%
Tax expense at statutory rate	$	108,446		35.0	$	153,010		35.0	$	70,496			35.0
Increase in income taxes resulting from:
State and local income taxes, net of federal income tax effect		4,239		1.4		9,418		2.2		2,549			1.3
Effect of nondeductible expenses and other, net		1,540		0.5		1,372		0.3		1,544			0.7
Decrease in income taxes resulting from:
IRS pre-filing agreement on qui tam settlement		—		—		—		—		(22,449	)		(11.1	)
Total income tax expense	$	114,225		36.9	$	163,800		37.5	$	52,140			25.9

The effective tax rate is based on expected taxable income, statutory tax rates, and estimated permanent book-to-tax differences. Filed income tax returns are periodically audited by state and federal authorities for compliance with applicable state and federal tax laws. The effective tax rate is computed taking into account changes in facts and circumstances, including progress of audits, developments in case law and other applicable authority, and emerging legislation.

For the year ended December 31, 2009, the Company recorded a $22,449 tax benefit under a pre-filing agreement with the Internal Revenue Service (“IRS”) relating to the 2008 qui tam litigation settlement. The pre-filing agreement program permits taxpayers to resolve tax issues in advance of filing their corporate income tax returns. The Company does not anticipate that there will be any further material changes to the tax benefit associated with this litigation settlement in future periods.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2011 and 2010 are presented below:

	December 31,
	2011			2010
Deferred tax assets:
Estimated claims incurred but not reported, a portion of which is deductible as paid for tax purposes	$	5,160		$	4,945
Vacation, bonus, stock compensation and other accruals, deductible as paid for tax purposes		28,273			27,182
Accounts receivable allowances, deductible as written off for tax purposes		9,614			7,532
Start-up costs, deductible in future periods for tax purposes		767			382
Unearned revenue, a portion of which is includible in income as received for tax purposes		—			8,257
2.0% Convertible Senior Notes		558			583
State net operating loss/credit carryforwards, deductible in future periods for tax purposes		648			—
Gross deferred tax assets		45,020			48,881
Deferred tax liabilities:
Goodwill, due to timing differences in book and tax amortization		(6,529	)		(5,500	)
Unrealized gains on investments		(6,717	)		(377	)
Property, equipment and software, due to timing differences in book and tax depreciation		(24,075	)		(20,060	)
Deductible prepaid expenses and other		(2,426	)		(2,274	)
Gross deferred tax liabilities		(39,747	)		(28,211	)
Net deferred tax assets	$	5,273		$	20,670

To assess the recoverability of deferred tax assets, the Company considers whether it is more likely than not that deferred tax assets will be realized. In making this determination, the scheduled reversal of deferred tax liabilities and whether projected future taxable income is sufficient to permit deduction of the deferred tax assets are taken into account. Based on the reversal of deferred tax liabilities, the level of historical taxable income and projections for future taxable income, the Company believes it is more likely than not that it will fully realize the benefits of the gross deferred tax assets of $45,020.

Prepaid income tax was $20,344 at December 31, 2011 and is included in prepaid expenses in the accompanying Consolidated Balance Sheet. Income tax payable was $2,643 at December 31, 2010 and is included in accounts payable, accrued expenses and other in the accompanying Consolidated Balance Sheet.

The Company is subject to U.S. federal income tax, as well as income taxes in multiple state jurisdictions. Substantially all U.S. federal income tax matters have been concluded for years through 2007. Substantially all material state matters have been concluded for years through 2007.

The following table presents a reconciliation of the beginning and ending amount of unrecognized tax benefits as follows:

	Amount
Balance at December 31, 2009	$	882
Additions based on tax positions for current year		—
Additions for tax positions of prior years		—
Reductions for tax positions of prior years		(125	)
Settlements		—
Balance at December 31, 2010		757
Additions based on tax positions for current year		—
Additions for tax positions of prior years		—
Reductions for tax positions of prior years		(118	)
Settlements		(639	)
Balance at December 31, 2011	$	—

The Company recognizes interest and any penalties accrued related to unrecognized tax benefits in income tax expense. As of December 31, 2011, the Company does not have any unrecognized tax benefits or liability for potential gross interest.