ManpowerGroup 2008 Annual Report Download - page 60

58 Notes to Consolidated Financial Statements Manpower Annual Report 2008
Notes To Consolidated Financial Statements
in millions, except per share data
Deferred income taxes are recorded on temporary differences at the tax rate expected to be in effect when the temporary
differences reverse. Temporary differences, which gave rise to the deferred taxes are as follows:
Year Ended December 31 2008 2007
Current Future Income Tax Benefits (Expense)
Accrued payroll taxes and insurance $ 12.2 $ 10.7
Employee compensation payable 26.1 23.7
Pension and postretirement benefits 0.5 (0.6)
Other 36.1 21.0
Valuation allowance (1.9) (4.5)
73.0 50.3
Noncurrent Future Income Tax Benefits (Expense)
Accrued payroll taxes and insurance 20.4 22.4
Pension and postretirement benefits 52.7 41.8
Intangible assets (85.4) (120.1)
Net operating losses and other 176.0 185.3
Valuation allowance (111.1) (101.0)
52.6 28.4
Total future tax benefits $ 125.6 $ 78.7
Current tax assets $ 66.5 $ 76.3
Current tax liability (16.4) (26.0)
Noncurrent tax asset 92.5 28.4
Noncurrent tax liability (17.0) —
Total future tax benefits $ 125.6 $ 78.7
The current tax liability is recorded in Accrued Liabilities, the noncurrent tax assets are recorded in Other Assets and the
noncurrent tax liability is recorded in Other Long-Term Liabilities in the consolidated balance sheets.
We have non-U.S. net operating loss carryforwards and U.S. state net operating loss carryforwards totaling $402.7 and
$86.5, respectively, as of December 31, 2008. The net operating loss carryforwards expire as follows:
Non-U.S. U.S. State
2009 $ 1.0 $ 6.2
2010 4.0 2.7
2011 9.9 5.4
2012 9.8 1.0
2013 22.1 0.3
Thereafter 101.2 70.9
No expirations 254.7 —
Total net operating loss carryforwards $ 402.7 $ 86.5
We have recorded a deferred tax asset of $118.3 as of December 31, 2008, for the benefit of these net operating losses.
Realization of this asset is dependent on generating sufficient taxable income prior to the expiration of the loss carryforwards.
A valuation allowance of $113.0 has been recorded as of December 31, 2008, as management believes that realization of
certain net operating loss carryforwards and other deferred tax assets is unlikely.
Pretax income of non-U.S operations was $470.4, $567.5 and $264.9 in 2008, 2007 and 2006, respectively. We have not
provided U.S. income taxes and non-U.S. withholding taxes on $1,003.9 of unremitted earnings of non-U.S. subsidiaries
that are considered to be reinvested indefinitely. Deferred taxes are provided on the earnings of non-U.S. subsidiaries that will
likely be remitted to the U.S. As of December 31, 2008 and 2007, we have recorded a deferred tax liability of $44.4 and
$56.9, respectively, related to non-U.S. earnings that we plan to remit.
As a result of our adoption of FIN 48, we recognized a $4.3 increase in the net liability for unrecognized tax benefits, which
was accounted for as an adjustment to retained earnings as of January 1, 2007. As of December 31, 2008, we have gross
unrecognized tax benefits related to various tax jurisdictions, including interest and penalties, of $50.9. We have related tax
benefits of $12.8, and the net amount of $38.1 would favorably affect the effective tax rate if recognized. There were no
material settlements in 2008. We do not expect our unrecognized tax benefits to change significantly over the next 12 months.