significant portions of the net deferred tax liability at December 31, 2010 and 2009 relate to the following: Income tax expense differed from the amounts computed by applying the statutory U.S. federal income tax rate of 35% to income before income taxes, noncontrolling interest and equity in income of equity investments as a result of the following: Temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities that give rise to As of December 31, 2010, TSYS had recognized deferred tax assets from net operating losses, capital losses and federal and state income tax credit carryforwards of $15.3 million, $2.1 million and $2.5 million, respectively. As of December 31, 2009, TSYS had recognized deferred tax assets from net operating losses, capital losses and federal and state income tax credit carryforwards of $13.2 million, $2.4 million and $3.1 million, respectively. The credits will begin to expire in the year 2011. The net operating losses will begin to expire in the year 2011. In assessing the realizability of deferred income tax assets, man- agement considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is depen- dent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strat- egies in making this assessment. 54 (in thousands) 2010 2009 At December 31, Deferred income tax assets: Net operating loss and income tax credit carryforwards . . . . . . . . . . . . . $ 19,884 18,653 Allowances for doubtful accounts and billing adjustments . . . . . . . . . . . . . 1,304 2,114 Deferred revenue . . . . . . . . . . . . . . . . 16,244 14,857 Other,net ..................... 33,980 29,610 Total deferred income tax assets . . . . . . . 71,412 65,234 Less valuation allowance for deferred income tax assets . . . . . . . . . . . . . . (15,434) (12,870) Net deferred income tax assets . . . . . . . 55,978 52,364 Deferred income tax liabilities: Excess tax over financial statement depreciation . . . . . . . . . . . . . . . . . . (35,878) (36,223) Computer software development costs ....................... (38,797) (39,150) Purchase accounting adjustments . . . . (1,438) (1,672) Foreign currency translation . . . . . . . . (3,771) (4,851) Other,net ..................... (4,848) (6,328) Total deferred income tax liabilities . . . (84,732) (88,224) Net deferred income tax liabilities . . . . $(28,754) (35,860) Total net deferred tax assets (liabilities): Current ....................... $ 11,090 11,302 Noncurrent..................... (39,844) (47,162) Net deferred income tax liability . . . . . . . $(28,754) (35,860) (in thousands) 2010 2009 2008 Years Ended December 31, Computed “expected” income tax expense . . . . . $107,734 119,205 131,057 Increase (decrease) in income tax expense resulting from: International earnings not taxable in the U.S. . . . . (9,014) (891) (4,935) State income tax expense (benefit), net of federal income tax effect . . . . . 2,326 3,418 2,787 Increase (decrease) in valuation allowance. . . . 2,564 (6,159) 5,006 Tax credits . . . . . . . . . . . . (2,824) (4,299) (4,131) Federal income tax expense resulting from ASC 740 Election . . . . . — 9,844 — Permanent differences and other, net . . . . . . . . . . . 5,302 732 1,422 Total income tax expense. . . $106,088 121,850 131,206