Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes

Income Taxes

8. Income Taxes

The Company recorded an income tax benefit of $32.5 million and $31.9 million for the three and six months ended June 30, 2011, respectively.  The tax benefit as a percentage of pre-tax income differed from the statutory rate due to the impact that forecasted permanent tax differences have on the Company’s full year 2011 financial loss projections.

No cash payments for federal and state income taxes were made during the three and six months ended June 30, 2011, as compared to cash payments of $2.5 million for the three and six months ended June 30, 2010, respectively.

During the six months ended June 30, 2011, the Company changed tax accounting methods with the IRS.  These tax accounting changes resulted in the recovery of approximately $22.5 million of deferred tax assets.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all of the Company’s deferred tax assets will not be realized.  The ultimate realization of the Company’s deferred tax assets is dependent upon its ability to generate future taxable income during the periods in which those temporary differences become deductible.  The Company reversed its tax valuation allowance in 2010 because its projections of future taxable income were sufficient to support recognition of its deferred tax assets.  The Company continues to believe its projections of future taxable income support the realizability of its deferred tax assets even though it recognized a net operating loss for the three and six months ended June 30, 2011.  The net operating loss recognized at the three and six months ended June 30, 2011 was primarily due to non-recurring and non-cash lease termination charges that do not impact our ability to generate future taxable income.