Cablevision 2013 Annual Report Download - page 165

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share amounts)
F-56
deferred tax assets and the need for additional valuation allowances quarterly. Based on current facts and
circumstances, management believes that it is more likely than not that the Company will realize benefit
for its gross deferred tax assets, except those deferred tax assets against which a valuation allowance has
been recorded which relate to certain state NOLs.
In the normal course of business, the Company engages in transactions in which the income tax
consequences may be uncertain. The Company's income tax returns are filed based on interpretation of
tax laws and regulations. Such income tax returns are subject to examination by taxing authorities. For
financial statement purposes, the Company only recognizes tax positions that it believes are more likely
than not of being sustained. There is considerable judgment involved in determining whether positions
taken or expected to be taken on the tax return are more likely than not of being sustained.
A reconciliation of the beginning and ending amount of unrecognized tax benefits associated with
uncertain tax positions, excluding associated deferred tax benefits and accrued interest, is as follows:
Balance at December 31, 2012 .......................................................................................................... $57,763
Increases related to prior year tax positions .................................................................................... 50
Increases related to current year tax positions ................................................................................. 10
Lapse of statute of limitations ........................................................................................................ (416)
Balance at December 31, 2013 .......................................................................................................... $57,407
As of December 31, 2013, if all uncertain tax positions were sustained at the amounts reported or
expected to be reported in the Company's tax returns, the elimination of the Company's unrecognized tax
benefits, net of the deferred tax impact, would decrease income tax expense by $55,806.
Interest expense related to uncertain tax positions is included in income tax expense, consistent with the
Company's historical policy. After considering the associated deferred tax benefit, interest expense
(income) of $107, $(377) and $1,179 has been included in income tax expense attributable to continuing
operations in the consolidated statements of operations for 2013, 2012 and 2011, respectively. At
December 31, 2013, accrued interest on uncertain tax positions of $237 and $2,531 was included in
accrued liabilities and other noncurrent liabilities, respectively, in the consolidated balance sheet.
In January 2014, the IRS informed the Company that the consolidated federal income tax returns for 2009
and 2010 are no longer under examination. Accordingly, in the first quarter of 2014, the Company will
record income tax benefit of approximately $53,000 associated with the reversal of a noncurrent liability
relating to an uncertain tax position.
The most significant jurisdictions in which the Company is required to file income tax returns include the
states of New York, New Jersey and Connecticut and the City of New York. The State of New York is
presently auditing income tax returns for years 2006 through 2008. The City of New York is presently
auditing income tax returns for years 2009 through 2011.
Management does not believe that the resolution of the ongoing income tax examinations described above
will have a material adverse impact on the financial position of the Company. Changes in the liabilities
for uncertain tax positions will be recognized in the interim period in which the positions are effectively
settled or there is a change in factual circumstances.