(9) Income Taxes

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


	2011			2010
	(In thousands)
Deferred tax assets:
Allowance for doubtful accounts	$	10,907		$	10,876
Accruals		10,811			11,682
Deferred revenue		4,845			4,822
Stock-based compensation		20,286			19,923
Other		15,505			12,944

		62,354			60,247

Less: Valuation allowance		(132	)		(178	)

Total deferred tax assets		62,222			60,069

Deferred tax liabilities:
Tax over book intangible asset amortization		(290,274	)		(260,783	)
Tax over book depreciation		(106,639	)		(80,437	)
Convertible debt interest		(72,185	)		(64,156	)
Other		(5,842	)		(4,428	)

Total deferred tax liabilities		(474,940	)		(409,804	)

Net deferred tax liabilities	$	(412,718	)	$	(349,735	)

At December 31, 2011 and December 31, 2010 the Company had state income tax net operating loss carryforwards of $4.1 million and $3.5 million, respectively. The Company believes that it is more likely than not that the benefit from certain state net operating loss carryforwards will not be fully realized. In recognition of this risk, the Company has provided a valuation allowance of $0.1 million at December 31, 2011 and 2010, on the deferred tax assets relating to these state net operating loss carryforwards. Such deferred tax assets expire between 2012 and 2032 as follows:


	(In thousands)
2012 – 2019	$	258
2021 – 2027		228
2023 – 2032		3,653

	$	4,139

Income tax expense attributable to operations consists of:


	Year Ended December 31,
	2011			2010			2009
	(In thousands)
Current:
Federal	$	44,994		$	58,853		$	44,923
State		5,091			6,617			4,623
Foreign		14			0			0

Total current		50,099			65,470			49,546

Deferred:
Federal		56,772			46,190			35,046
State		6,211			5,259			2,699
Foreign		0			0			0

Total deferred		62,983			51,449			37,745

Total income tax expense	$	113,082		$	116,919		$	87,291

Total income tax expense allocation:
Income from operations	$	113,082		$	116,919		$	87,291
Stockholders' equity, for compensation expense for tax purposes in excess of amounts recognized for financial reporting purposes		(415	)		(1,419	)		(4,448	)

	$	112,667		$	115,500		$	82,843

Total income tax expense differs from the amounts computed by applying a U.S. federal income tax rate of 35% to income before income taxes as a result of the following:


	Year Ended December 31,
	2011			2010			2009
	(In thousands)
Computed "expected" tax expense	$	101,620		$	104,473		$	78,185
State income taxes, net of federal income tax benefit		8,019			8,151			4,760
Permanent differences		5,593			5,183			6,180
Foreign		14			0			0
Other		(2,164	)		(888	)		(1,834	)

Total income tax expense	$	113,082		$	116,919		$	87,291

The Company had gross unrecognized tax benefits, including interest and penalties as of December 31, 2011 and December 31, 2010 of $4.4 million and $4.8 million, respectively, of which $2.9 million and $3.2 million, net of federal tax benefit, if recognized, would favorably affect the effective tax rate. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. The gross amount provided for potential interest and penalties at December 31, 2011 totaled $1.3 million and $0.1 million, respectively.

A reconciliation of the beginning and ending balances of the Company's gross liability for unrecognized tax benefits, excluding the related interest and penalties, at December 31, 2011 and December 31, 2010 is as follows:


	2011			2010
	(In thousands)
Total gross unrecognized tax benefits at beginning of year	$	3,328		$	4,116
Additions for tax positions related to the current year		392			201
Additions for tax positions related to prior years		104			535
Reductions for tax positions related to prior years		(38	)		(574	)
Settlements		(279	)		(415	)
Reductions due to lapse in statute of limitations		(564	)		(535	)

Total gross unrecognized tax benefits at end of year	$	2,943		$	3,328

The Company conducts business nationally in the U.S. and in Canada and, as a result, files federal income tax returns and returns in various state and local jurisdictions. In the normal course of business the Company is subject to examination by taxing authorities throughout the United States and in Canada. With few exceptions, the Company is no longer subject to U.S. and Canada federal, state and local income tax examinations for years before 2007.

The Company effectively settled examinations with various taxing jurisdictions for $0.3 million and $0.4 million in the years 2011 and 2010, respectively. The Company does not expect that the total amount of unrecognized tax positions will significantly increase or decrease in the next twelve months but is currently negotiating with two taxing jurisdictions that may result in an increase or decrease in the total amount of unrecognized tax positions in the next twelve months.

The Internal Revenue Service ("IRS") has completed its examination of the Company's U.S. income tax returns through 2010. The U.S. federal statute of limitations remains open for the years 2008 and forward. There are no material disputes for the open tax years. The year 2011 is currently under examination.