MoneyGram 2005 Annual Report Download - page 81
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Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 11. Income Taxes
The components of earnings before income taxes from continuing operations are as follows for the year ended December 31:
2005 2004 2003
(Dollars in thousands)
Earnings before income taxes from continuing operations:
United States $ 111,868 $ 53,507 $ 64,259
Foreign 34,508 35,513 23,912
Total $ 146,376 $ 89,020 $ 88,171
Income tax expense related to continuing operations for the year ended December 31 consists of:
2005 2004 2003
(Dollars in thousands)
Current:
Federal $ 27,324 $ 4,386 $ 24,370
State (1,038) 4,962 3,233
Foreign 5,004 8,261 (702)
Current income tax expense 31,290 17,609 26,901
Deferred income tax expense 2,880 6,282 (14,416)
Income tax expense $ 34,170 $ 23,891 $ 12,485
In 2005, the Company recognized a state income tax benefit resulting from changes in estimates to previously estimated amounts as the result of new and
better information. Income tax expense totaling $0.5 million, $13.8 million and $25.0 million in 2005, 2004 and 2003, respectively, is included in "Income
and gain from discontinued operations, net of tax" in the Consolidated Statement of Income. Taxes paid were $22.9 million, $35.7 million and $24.1 million
for 2005, 2004 and 2003, respectively. A reconciliation of the expected federal income tax at statutory rates to the actual taxes provided on income from
continuing operations for the year ended December 31 is:
2005 % 2004 % 2003 %
(Dollars in thousands)
Income tax at statutory federal income tax rate $ 51,232 35.0% $ 31,157 35.0% $ 30,860 35.0%
Tax effect of:
State income tax, net of federal income tax effect 2,084 1.4% 910 1.0% 959 1.1%
Preferred stock redemption costs — 0.0% 6,004 6.7% —
Other (4,673) (3.2%) 1,348 1.5% 1,166 1.3%
48,643 33.2% 39,419 44.3% 32,985 37.4%
Tax-exempt income (14,473) (9.9%) (15,528) (17.4%) (20,500) (23.3%)
Income tax expense $ 34,170 23.3% $ 23,891 26.8% $ 12,485 14.2%
Included in the "Other" component of the above reconciliation for 2005 is $3.5 million of tax benefits from changes in estimates to previously estimated tax
amounts resulting from new information received during the year, as well as $2.1 million of tax benefits from the reversal of tax reserves no longer needed
due to the passage of time. F-27