American Home Shield 2011 Annual Report Download - page 93

Table of Contents
Notes to the Consolidated Financial Statements (Continued)
Note 5. Income Taxes (Continued)
Income tax expense from continuing operations is as follows:
2011
(In thousands) Current Deferred Total
U.S. federal $ 2,103 $ 39,946 $ 42,049
Foreign 3,284 (3,984) (700)
State and local 3,477 (914) 2,563
$ 8,864 $ 35,048 $ 43,912
2010
Current Deferred Total
U.S. federal $ 574 $ 8,446 $ 9,020
Foreign 1,847 259 2,106
State and local 4,069 (4,250) (181)
$ 6,490 $ 4,455 $ 10,945
2009
Current Deferred Total
U.S. federal $ (6,708) 3,589 $ (3,119)
Foreign 2,356 629 2,985
State and local 14,254 (23,324) (9,070)
$ 9,902 $ (19,106) $ (9,204)
Deferred income tax expense results from timing differences in the recognition of income and expense for income tax and financial reporting purposes.
Deferred income tax balances reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting
and income tax purposes. The deferred tax asset primarily reflects the impact of future tax deductions related to the Company's accruals and certain net
operating loss carryforwards. The deferred tax liability is primarily attributable to the basis differences related to intangible assets. Valuation allowances are
recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The valuation allowance for deferred tax assets as
of December 31, 2011 was $6.3 million. The net change in the total valuation allowance for the year ended December 31, 2011 was a decrease of $9.2 million
and was primarily attributable to the reduction of net operating loss carryforwards and other tax attributes related to the dissolution of certain subsidiaries.
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