INCOME TAXES:

12 Months Ended

Dec. 31, 2011

INCOME TAXES:

INCOME TAXES:

8.     INCOME TAXES:

The provision (benefit) for income taxes consisted of the following for the years ended December 31, 2011, 2010 and 2009 (in thousands):

	2011		2010		2009
Provision (benefit) for income taxes - continuing operations	$	44,785	$	40,226	$	(32,512	)
Provision for income taxes - discontinued operations	477		77		350
	$	45,262	$	40,303	$	(32,162	)
Current:
Federal	$	678	$	1,263	$	(7,882	)
State	1,055		596		669
	1,733		1,859		(7,213		)
Deferred:
Federal	41,361		37,010		(25,598		)
State	2,168		1,434		649
	43,529		38,444		(24,949		)
	$	45,262	$	40,303	$	(32,162	)

The following is a reconciliation of federal income taxes at the applicable statutory rate to the recorded provision from continuing operations:

	2011		2010		2009
Federal income tax provision (benefit) at statutory rate	35.0	%	35.0	%	(35.0	)%
Adjustments-
State income taxes, net of federal effect	1.7	%	1.5	%	(0.3	)%
Non-deductible expense items	—		(0.1	)%	18.0	%
Basis in subsidiaries stock	—		(2.1	)%	(2.3	)%
Other	0.3	%	0.1	%	0.3	%
Provision (benefit) for income taxes	37.0	%	34.4	%	(19.3	)%

The non-deductible expense items include the tax effect of $27.9 million of non-deductible goodwill impairment for the year ended December 31, 2009 and $0.1 million and $2.0 million of non-deductible FCC license impairment for the years ended December 31, 2010 and 2009, respectively.

We recorded a deferred tax benefit of $2.5 million and $3.8 million during the years ended December 31, 2010 and 2009, respectively, related to the recovery of historical losses attributable to the basis in stock of certain subsidiaries.

Temporary differences between the financial reporting carrying amounts and the tax bases of assets and liabilities give rise to deferred taxes.  Total deferred tax assets and deferred tax liabilities as of December 31, 2011 and 2010 were as follows (in thousands):

	2011			2010
Current and Long-Term Deferred Tax Assets:
Net operating and capital losses:
Federal	$	1,550		$	4,063
State	87,623			83,229
Broadcast licenses	18,087			24,782
Intangibles	5,390			8,669
Other	19,352			32,235
	132,002			152,978
Valuation allowance for deferred tax assets	(79,136		)	(77,559		)
Total deferred tax assets	52,866			75,419
Current and Long-Term Deferred Tax Liabilities:
Broadcast licenses	(10,115		)	(9,199		)
Intangibles	(204,230		)	(191,658		)
Property and equipment, net	(24,877		)	(19,019		)
Contingent interest obligations	(52,298		)	(52,212		)
Other	(3,958		)	(4,008		)
Total deferred tax liabilities	(295,478		)	(276,096		)
Net tax liabilities	$	(242,612	)	$	(200,677	)

Our remaining federal and state net operating losses will expire during various years from 2012 to 2031.

We establish valuation allowances in accordance with the guidance related to accounting for income taxes.  In evaluating our ability to realize net deferred tax assets, we consider all available evidence, both positive and negative, including our past operating results, tax planning strategies and forecasts of future taxable income.  In considering these sources of taxable income, we must make certain assumptions and judgments that are based on the plans and estimates used to manage our underlying businesses. A valuation allowance has been provided for deferred tax assets based on past operating results, expected timing of the reversals of existing temporary book/tax basis differences, alternative tax strategies and projected future taxable income.  Although realization is not assured for the remaining deferred tax assets, we believe it is more likely than not that they will be realized in the future.  During the years ended December 31, 2011 and 2010, we increased our valuation allowance by $1.6 million and $0.7 million, respectively. The change in valuation allowance was primarily due to state net operating losses.  During the year ended December 31, 2009, we decreased our valuation allowances by $8.0 million.  The change in valuation allowance was primarily due to the removal of the fully valued federal net operating losses related to the closure of a subsidiary.  We expect that $7.7 million of valuation allowance related to certain deferred tax assets of one of our consolidated VIEs may be released in the first quarter of 2012 when the weight of all available evidence will support full realization of the deferred tax assets.

As of December 31, 2011 and 2010, we had $26.1 million of gross unrecognized tax benefits.  Of this total, $15.1 million (net of federal effect on state tax issues) and $6.8 million (net of federal effect on state tax issues) represent the amounts of unrecognized tax benefits that, if recognized, would favorably affect our effective tax rates from continuing operations and discontinued operations, respectively.

The following table summarizes the activity related to our accrued unrecognized tax benefits (in thousands):

	2011			2010			2009
Balance at January 1,	$	26,125		$	26,148		$	26,088
(Reductions) increases related to prior years tax position	(127		)	(210		)	146
Increases related to current year tax positions	90			187			104
Reductions related to settlements with taxing authorities	—			—			(76		)
Reductions related to expiration of the applicable statute of limitations	—			—			(114		)
Balance at December 31,	$	26,088		$	26,125		$	26,148

In addition, we recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.  We recognized $1.3 million, $1.0 million and $1.1 million of income tax expense for interest related to uncertain tax positions for the years ended December 31, 2011, 2010 and 2009, respectively.

Management periodically performs a comprehensive review of our tax positions and accrues amounts for tax contingencies.  Based on these reviews, the status of on-going audits and the expiration of applicable statute of limitations, these accruals are adjusted as necessary.  The resolution of audits is unpredictable and could result in tax liabilities that are significantly higher or lower than for what we have provided.  Amounts accrued for these tax matters are included in the table above and long-term liabilities in our consolidated balance sheets.  We believe that adequate accruals have been provided for all years.

We are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions.  All of our 2008 and subsequent federal and state tax returns remain subject to examination by various tax authorities.  Some of our pre-2008 federal and state tax returns may also be subject to examination.  In addition, our 2006 and 2007 federal tax returns are currently under audit, and several of our subsidiaries are currently under state examinations for various years.  We do not anticipate the resolution of these matters will result in a material change to our consolidated financial statements.  In addition, it is reasonably possible that various statutes of limitations could expire by December 31, 2012.  We do not expect such expirations, if any, would significantly change our unrecognized tax benefits over the next twelve months.