Equifax 2010 Annual Report Download - page 57

7. INCOME TAXES
The provision for income taxes from continuing operations consisted
of the following:
Twelve Months Ended
December 31,
(In millions) 2010 2009 2008
Current:
Federal $ 74.2 $ 65.8 $ 59.7
State 8.2 6.9 8.8
Foreign 41.3 38.8 49.2
123.7 111.5 117.7
Deferred:
Federal 15.3 (5.0) (1.4)
State (4.1) 0.1 1.3
Foreign (3.0) — 1.4
8.2 (4.9) 1.3
Provision for income
taxes $131.9 $106.6 $119.0
Domestic and foreign income from continuing operations before
income taxes was as follows:
Twelve Months Ended
December 31,
(In millions) 2010 2009 2008
U.S. $203.3 $166.5 $173.7
Foreign 171.9 164.5 200.2
$375.2 $331.0 $373.9
The provision for income taxes reconciles with the U.S. federal statu-
tory rate, as follows:
Twelve Months Ended
December 31,
(In millions) 2010 2009 2008
Federal statutory rate 35.0% 35.0% 35.0%
Provision computed at
federal statutory rate $131.3 $115.9 $130.9
State and local taxes, net
of federal tax benefit 2.9 4.8 6.0
Foreign
(2)
2.4 (3.2) 1.3
Valuation allowance
(2)
(3.2) (8.3) (8.7)
Tax reserves
(1)(2)
0.8 1.0 (12.2)
Other
(3)
(2.3) (3.6) 1.7
Provision for income
taxes $131.9 $106.6 $119.0
Effective income tax rate 35.1% 32.2% 31.8%
(1) During the third quarter of 2008, the applicable statute of limita-
tions related to uncertain tax positions expired, resulting in the
reversal of the related income tax reserve. The reversal of this
reserve resulted in an income tax benefit of $14.6 million. These
are reflected in tax reserves on the effective tax reconciliation
and reduced our 2008 effective tax rates by 3.5%.
(2) During the fourth quarter of 2009, we recognized a $7.3 million
income tax benefit related to our ability to utilize foreign tax
credits beyond 2009. This reduced our 2009 effective tax rate
by 2.1%.
(3) Includes the benefit related to an investment loss in a subsidiary
recognized during the third quarter of 2009.
We record deferred income taxes using enacted tax laws and rates
for the years in which the taxes are expected to be paid. Deferred
income tax assets and liabilities are recorded based on the differ-
ences between the financial reporting and income tax bases of
assets and liabilities. For additional information about our income tax
policy, see Note 1 of the Notes to Consolidated Financial Statements.
Components of the deferred income tax assets and liabilities at
December 31, 2010 and 2009, were as follows:
December 31,
(In millions) 2010 2009
Deferred income tax assets:
Employee pension benefits $ 137.4 $ 124.1
Net operating and capital
loss carryforwards
(1)
104.0 44.8
Foreign tax credits 55.2 20.8
Employee compensation programs 43.8 33.6
Reserves and accrued expenses 12.8 12.5
Deferred revenue 5.8 9.2
Other 10.0 9.2
Gross deferred income tax assets 369.0 254.2
Valuation allowance
(1)
(87.2) (31.7)
Total deferred income tax assets, net $ 281.8 $ 222.5
Deferred income tax liabilities:
Goodwill and intangible assets (366.6) (330.5)
Pension expense (109.4) (94.2)
Undistributed earnings of
foreign subsidiaries (27.4) (18.9)
Depreciation (6.4) (8.6)
Other (5.5) (5.1)
Total deferred income tax liability (515.3) (457.3)
Net deferred income tax liability $(233.5) $(234.8)
(1) During 2010, the Company was able to recognize certain losses
on a foreign tax return which resulted in a net operating loss
carryforward. However, the net operating loss carryforward is
not expected to be utilized and a corresponding valuation allow-
ance has been recorded against the related deferred tax asset.
Additionally, it was determined that a previously disclosed
deferred tax asset for unrealized foreign currency exchanges
losses, which was fully reserved, should not have been
recorded. The impact of not recording the asset and related
valuation allowance has no impact on the Consolidated
Financial Statements.
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