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Income Taxes
3 Months Ended
Mar. 31, 2014
Income Tax Disclosure [Abstract]  
Income Taxes
NOTE 5 — INCOME TAXES
The Company’s effective tax rate from continuing operations for the three months ended March 31, 2014 and 2013 was 38% and 23%, respectively. The effective tax rate for the three months ended March 31, 2014 was greater than the Federal statutory rate due to state income taxes and certain expenses that are not deductible for tax purposes. The effective tax rate for the three months ended March 31, 2013 was less than the Federal statutory tax rate due to the benefit of movie tax credits that were purchased during this period and the receipt of a state tax refund that had not yet been recognized.
Certain tax authorities may periodically audit the Company, and the Company may occasionally be assessed interest and penalties by tax jurisdictions. The Company recognizes accrued interest from uncertain income tax benefits in its income tax provision, while penalties are accrued in selling, general and administrative expenses. During the three months ended March 31, 2014, the Company accrued less than $0.1 million of interest expense related to uncertain income tax benefits and had gross uncertain tax benefits of $0.6 million as of March 31, 2014. If these benefits had been recognized, there would have been a $0.5 million effect to annual income tax expense.
During October 2012, the Company funded a $2.9 million income tax payment to the State of Illinois related to a dispute over state income tax apportionment methodology which was recorded as an other asset. The Company filed its state income tax returns related to the years 2002 through 2005 following the methodology prescribed by Illinois statute; however, the State of Illinois has taken a contrary tax position. The Company filed a formal protest with the State of Illinois during the fourth quarter of 2012. The Company does not expect this issue to have a material adverse effect on its business, financial condition and results of operations.