Redbox 2012 Annual Report Download - page 78

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Components of Income Tax Expense
The components of income tax expense were as follows:
Dollars in thousands Year Ended December 31,
2012 2011 2010
Current:
State and local ................................................. $ 3,936 $ 9,326 $ 1,003
Foreign ....................................................... 7 375 634
Total current ....................................................... 3,943 9,701 1,637
Deferred:
U.S. Federal ................................................... 81,549 58,858 36,957
State and local ................................................. 7,545 580 4,703
Foreign ....................................................... (1,521) 638 (265)
Total deferred ...................................................... 87,573 60,076 41,395
Total income tax expense ............................................. $91,516 $69,777 $43,032
Rate Reconciliation
The income tax expense differs from the amount that would result by applying the U.S. statutory rate to income
before income taxes as follows:
Year Ended December 31,
2012 2011 2010
U.S Federal tax expense at statutory rates ............................... 35.0% 35.0% 35.0%
State income taxes, net of federal benefit ............................ 4.0% 4.3% 3.5%
Federal and state credits ......................................... (0.8)% (0.6)% —
Other ........................................................ (0.3)% (0.9)% 1.0%
Effective tax rate .................................................. 37.9% 37.8% 39.5%
Unrecognized Tax Benefits
The aggregate changes in the balance of unrecognized tax benefits were as follows:
Dollars in thousands Year ended December 31,
2012 2011 2010
Balance, beginning of the year ............................................ $2,455 $1,821 $1,800
Additions based on tax positions related to the current year ................. — 315 70
Additions for tax positions related to prior years .......................... 251 420 —
Reductions for tax positions related to prior years ......................... (71) — (39)
Reductions from lapse of applicable statute of limitations .................. (252) — (10)
Settlements ....................................................... — (101) —
Balance, end of year .................................................... $2,383 $2,455 $1,821
At December 31, 2012, the unrecognized tax benefits were primarily related to R&D credit and income/expense
recognition, all of which would have an effect on our effective tax rate if recognized. It was not necessary to
accrue interest and penalties associated with the uncertain tax positions identified because operating losses and
tax credit carryforwards were sufficient to offset all unrecognized tax benefits.
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