Uncertain Tax Positions

9 Months Ended

Sep. 30, 2012

Uncertain Tax Positions [Abstract]

Uncertain Tax Positions

15. Uncertain Tax Positions

As of December 31, 2011, the Company had approximately $2.1 million of total gross unrecognized tax benefits that if recognized, would favorably affect the net effective income tax rate in any future period.  As of September 30, 2012, the Company had approximately $3.5 million of total gross unrecognized tax benefits.  Of this total, $1.5 million represents the amount of unrecognized tax benefits that, if recognized, would favorably affect the net effective income tax rate in any future period.  A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands of dollars):

(Thousands of dollars)
Balance at January 1, 2012	$	2,060
Gross increases- current year tax positions		1,974
Gross increases- tax positions from prior periods		4
Gross decreases - tax positions from prior periods		(581	)
Balance at September 30, 2012	$	3,457

The Company has unrecognized tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months.  The unrecognized tax benefits relate to tax credits and other various deductions.  The Company estimates the change to be approximately $0.4 million.

The Company's practice is to recognize interest and penalties related to income tax matters in administrative costs.  The Company had $0.1 million accrued for interest and penalties at December 31, 2011.  Negligible interest and penalties were recognized during the three and nine months ended September 30, 2012.

For the three and nine months ended September 30, 2012 the Company paid taxes of $7.0 million and $41.5 million, respectively.

In connection with the Datac acquisition the Company identified uncertain tax liabilities of the target company related to previous tax years.  As a result, the Company entered into an agreement whereby the former owners funded an escrow account for $5.5 million dollars.  In accordance with ASC 805, Business Combinations, the Company has identified an indemnification asset resulting from this agreement.