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INCOME TAXES | 12 Months Ended
--- | ---
Mar. 29, 2012
INCOME TAXES |
INCOME TAXES |
NOTE 11—INCOME TAXES Income tax provision reflected in the Consolidated Statements of Operations for the periods in the three years ended March 29, 2012 consists of the following components:
(In thousands) |  | March 29, 2012 |  | March 31, 2011 |  | April 1, 2010 |
--- | --- | --- | --- | --- | --- | --- | ---
Current: |  |  |  |  |  |  |  |  |  |
Federal |  | $ | — |  | $ | — |  | $ | (2,800 | )
Foreign |  |  | — |  |  | — |  |  | — |
State |  |  | 2,015 |  |  | 1,950 |  |  | 500 |
Total current |  |  | 2,015 |  |  | 1,950 |  |  | (2,300 | )
Deferred: |  |  |  |  |  |  |  |  |  |
Federal |  |  | — |  |  | — |  |  | (66,500 | )
Foreign |  |  | — |  |  | — |  |  | — |
State |  |  | — |  |  | — |  |  | — |
Total deferred |  |  | — |  |  | — |  |  | (66,500 | )
Total provision (benefit) |  |  | 2,015 |  |  | 1,950 |  |  | (68,800 | )
Tax provision from discontinued operations |  |  | — |  |  | — |  |  | — |
Total provision (benefit) from continuing operations |  | $ | 2,015 |  | $ | 1,950 |  | $ | (68,800 | )
AMCE has recorded no alternative minimum taxes as the consolidated tax group for which AMCE is a member expects no alternative minimum tax liability and pursuant to the tax sharing arrangement in place, AMCE has no liability. Pre-tax income (losses) consisted of the following:
(In thousands) |  | March 29, 2012 |  | March 31, 2011 |  | April 1, 2010 |
--- | --- | --- | --- | --- | --- | --- | ---
Domestic |  | $ | (78,677 | ) | $ | (121,243 | ) | $ | 8,740 |
Foreign |  |  | (1,296 | ) |  | 340 |  |  | (7,750 | )
Total |  | $ | (79,973 | ) | $ | (120,903 | ) | $ | 990 |
The difference between the effective tax rate on earnings (loss) from continuing operations before income taxes and the U.S. federal income tax statutory rate is as follows:
(In thousands) |  | March 29, 2012 |  | March 31, 2011 |  | April 1, 2010 |
--- | --- | --- | --- | --- | --- | --- | ---
Income tax expense (benefit) at the federal statutory rate |  | $ | (27,985 | ) | $ | (42,515 | ) | $ | 2,983 |
Effect of: |  |  |  |  |  |  |  |  |  |
State income taxes |  |  | 2,015 |  |  | 1,950 |  |  | 500 |
Change in ASC 740 (formerly FIN 48) reserve |  |  | (5,400 | ) |  | (300 | ) |  | 200 |
Permanent items |  |  | 825 |  |  | — |  |  | (540 | )
Valuation allowance |  |  | 32,560 |  |  | 42,815 |  |  | (71,765 | )
Other, net |  |  | — |  |  | — |  |  | (178 | )
Income tax expense (benefit) |  | $ | 2,015 |  | $ | 1,950 |  | $ | (68,800 | )
Effective income tax rate |  |  | (2.5 | )% |  | (1.6 | )% |  | (807.1 | )%
The significant components of deferred income tax assets and liabilities as of March 29, 2012 and March 31, 2011 are as follows:
|  | March 29, 2012 |  | March 31, 2011 |
--- | --- | --- | --- | --- | ---
|  | Deferred Income Tax |  | Deferred Income Tax |
(In thousands) |  | Assets |  | Liabilities |  | Assets |  | Liabilities |
Property |  | $ | 76,855 |  | $ | — |  | $ | 7,385 |  | $ | — |
Investments in joint ventures |  |  | — |  |  | (135,745 | ) |  | — |  |  | (77,522 | )
Intangible assets |  |  | — |  |  | (26,884 | ) |  | — |  |  | (26,266 | )
Pension postretirement and deferred compensation |  |  | 24,364 |  |  | — |  |  | 18,481 |  |  | — |
Accrued reserves and liabilities |  |  | 45,980 |  |  | — |  |  | 48,954 |  |  | — |
Deferred revenue |  |  | 144,444 |  |  | — |  |  | 158,354 |  |  | — |
Deferred rents |  |  | 114,644 |  |  | — |  |  | 116,513 |  |  | — |
Alternative minimum tax and other credit carryovers |  |  | 15,056 |  |  | — |  |  | 13,901 |  |  | — |
Charitable contributions |  |  | 1,757 |  |  | — |  |  | 1,642 |  |  | — |
Net operating loss carryforward |  |  | 225,195 |  |  | — |  |  | 172,279 |  |  | — |
Total |  | $ | 648,295 |  | $ | (162,629 | ) | $ | 537,509 |  | $ | (103,788 | )
Less: Valuation allowance |  |  | (413,666 | ) |  | — |  |  | (329,221 | ) |  | — |
Total deferred income taxes(1) |  | $ | 234,629 |  | $ | (162,629 | ) | $ | 208,288 |  | $ | (103,788 | )
(1) See Note 8—Supplemental Balance Sheet Information for additional disclosures about net current deferred tax assets and net non-current deferred tax liabilities. A rollforward of the Company's valuation allowance for deferred tax assets is as follows:
(In thousands) |  | Balance at Beginning of Period |  | Additions Charged (Credited) to Revenues, Costs and Expenses |  | Charged (Credited) to Other Accounts(1) |  | Balance at End of Period |
--- | --- | --- | --- | --- | --- | --- | --- | --- | ---
Fiscal Year 2012 |  |  |  |  |  |  |  |  |  |  |  |  |
Valuation Allowance—deferred income tax assets |  | $ | 329,221 |  |  | 32,560 |  |  | 51,885 |  | $ | 413,666 |
Fiscal Year 2011 |  |  |  |  |  |  |  |  |  |  |  |  |
Valuation Allowance—deferred income tax assets |  | $ | 263,032 |  |  | 42,815 |  |  | 23,374 |  | $ | 329,221 |
Fiscal Year 2010 |  |  |  |  |  |  |  |  |  |  |  |  |
Valuation Allowance—deferred income tax assets |  | $ | 281,442 |  |  | (71,765 | ) |  | 53,355 |  | $ | 263,032 |
(1) Primarily relates to amounts resulting from our tax sharing arrangement, changes in deferred tax assets and associated valuation allowance that are not related to income statement activity as well as amounts charged to other comprehensive income. The Company's federal income tax loss carryforward of $521,828,000 will begin to expire in 2020 and will completely expire in 2031 and will be limited annually due to certain change in ownership provisions of the Internal Revenue Code. The Company also has state income tax loss carryforwards of $754,205,000 which may be used over various periods ranging from 1 to 20 years. During fiscal 2010, management believed it was more likely than not that the Company had the ability to execute a feasible and prudent tax strategy that would provide for the realization of net operating losses by converting certain limited partnership units into common stock. Management has reduced its overall valuation allowance by $65,000,000 in fiscal 2010 for the estimated amount of net operating losses that would be realized as a result of this potential action. At March 29, 2012, this tax strategy was estimated to preserve net operating losses that expire through 2021. The Company has recorded a valuation allowance against its remaining net deferred tax asset in U.S. and foreign jurisdictions of $413,666,000 as of March 29, 2012. A reconciliation of the change in the amount of unrecognized tax benefits during the year ended March 29, 2012 was as follows:
(In millions) |  | March 29, 2012 |  | March 31, 2011 |  | April 1, 2010 |
--- | --- | --- | --- | --- | --- | --- | ---
Balance at Beginning of Period |  | $ | 28.2 |  | $ | 28.5 |  | $ | 28.3 |
Gross Increases—Current Period Tax Positions |  |  | 0.7 |  |  | 0.7 |  |  | 0.7 |
Gross Decreases—Tax Position in Prior Periods |  |  | — |  |  | — |  |  | (0.5 | )
Favorable Resolutions with Authorities |  |  | (1.0 | ) |  | — |  |  | — |
Expired Attributes |  |  | (5.2 | ) |  | (1.0 | ) |  | — |
Lapse of Statute of Limitations |  |  | — |  |  | — |  |  | — |
Cash Settlements |  |  | — |  |  | — |  |  | — |
Balance at End of Period |  | $ | 22.7 |  | $ | 28.2 |  | $ | 28.5 |
The Company's effective tax rate is not expected to be significantly impacted by the ultimate resolution of the uncertain tax positions because of the retention of a valuation allowance against most of its net operating loss carryforwards. The Company recognizes income tax-related interest expense and penalties as income tax expense and general and administrative expense, respectively. The liabilities for interest and penalties increased by $115,000 and $187,000, as of March 29, 2012 and March 31, 2011, respectively. There are currently unrecognized tax benefits which the Company anticipates will be resolved in the next 12 months; however, the Company is unable at this time to estimate what the impact on its unrecognized tax benefits will be. The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. An IRS examination of the tax years February 28, 2002 through December 31, 2003 of the former Loews Cineplex Entertainment Corporation and subsidiaries was concluded during fiscal 2007. An IRS examination for the tax years ended March 31, 2005 and March 30, 2006 was completed during 2009. Generally, tax years beginning after March 28, 2002 are still open to examination by various taxing authorities. Additionally, the Company has net operating loss ("NOL") carryforwards for tax years ended October 31, 2000 through March 28, 2002 in the U.S. and various state jurisdictions which have carryforwards of varying lengths of time. These NOLs are subject to adjustment based on the statute of limitations of the return in which they are utilized, not the year in which they are generated. Various state, local and foreign income tax returns are also under examination by taxing authorities. The Company does not believe that the outcome of any examination will have a material impact on its financial statements.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 + Details
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