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Income Taxes
6 Months Ended
Jun. 30, 2011
Income Taxes [Abstract]  
Income Taxes
Note 12: Income Taxes
     Income taxes are recorded using the liability method in accordance with applicable accounting guidance. The provision for income taxes reflects the Company’s estimate of the effective rate expected to be applicable for the full fiscal year, adjusted by any discrete events, which are reported in the period in which they occur. This estimate is re-evaluated each quarter based on the Company’s estimated tax expense for the year.
     The Company recognized income tax expense of approximately $3,630 and $4,049 for the three months and six ended June 30, 2011, respectively, and $1,411 and $2,139 for the three and six months ended June 30, 2010, respectively, representing effective income tax rates of (42.6) percent and (29.9) percent, for the six months ended June 30, 2011 and 2010, respectively. The tax expense for the three and six months ended June 30, 2011 is primarily attributable to the Texas margin tax, changes in the valuation allowance, and a one-time charge of $2,961 related to a pre-Distribution Internal Revenue Service (“IRS”) audit adjustment. This one time charge was incurred pursuant to the Tax Matters Agreement with Belo. The Company anticipates making this payment to Belo in the third quarter of 2011 upon closing of all pre-Distribution federal income tax years.
     The Company currently projects taxable losses for the year 2011 for federal income tax purposes and in certain state income tax jurisdictions. Net operating losses can be carried forward to offset future taxable income. The Company’s net operating loss carryforwards begin to expire in the year 2029 if not utilized.
     The applicable accounting guidance places a threshold for recognition of deferred tax assets including net operating loss carryforwards. Based on such criteria, the Company established a valuation allowance against the deferred tax assets in certain jurisdictions, as it was more likely than not the benefit resulting from these deferred tax assets would not be realized. The factors used to assess the likelihood of realization of the deferred tax assets include reversal of future deferred tax liabilities, available tax planning strategies, and future taxable income. Any reversal relating to the valuation allowance will be recorded as a reduction of income tax expense. The change in deferred tax assets for the six months ended June 30, 2011, is partially offset by a corresponding increase in the valuation allowance of approximately $2,209.
     The Company records a tax benefit from uncertain tax positions when it is more likely than not the positions will be sustained by taxing authorities based on the technical merits of those positions. As of June 30, 2011, the Company recorded $360 in reserves for uncertain tax positions. The Company recognizes interest and penalties related to these reserves in interest expense.
     On December 31, 2010, the Company recorded a receivable from Belo of $3,549 related to a carryback of the Company’s taxable net operating losses on Belo’s federal income tax return filed in the fourth quarter of 2010. During March 2011, Belo received the refund and the receivable from Belo has been collected.