MoneyGram 2008 Annual Report Download - page 136

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
investment losses as of December 31, 2007, the Company determined that it was not "more likely than not" that the deferred tax assets
related to the losses will be realized.
Deferred income taxes reflect temporary differences between amounts of assets and liabilities, including tax loss and tax credit carry-
forwards, for financial reporting purposes and such amounts as measured by tax laws at enacted tax rates expected to be in effect when
such differences reverse. The carrying value of the Company's deferred tax assets is dependent upon the Company's ability to generate
sufficient future taxable income in certain tax jurisdictions. If the Company determines that it is more likely than not that some portion of
all of its deferred assets will not be realized, a valuation allowance to the deferred tax assets would be established in the period such
determination was made. The Company's deferred tax assets and liabilities at December 31 are comprised of the following:
(Amounts in thousands) 2008 2007
Deferred tax assets:
Postretirement benefits and other employee benefits $ 52,133 $ 37,274
Tax loss carryovers 308,870 —
Tax credit carryovers 45,394 1,474
Unrealized loss on derivative financial investments — 11,857
Basis difference in revalued investments 126,341 442,442
Bad debt and other reserves 5,977 2,801
Other 7,126 14,194
Valuation allowance (494,310) (435,700)
Total deferred tax asset 51,531 74,342
Deferred tax liabilities:
Unrealized gain on securities classified as available-for-sale — (16,192)
Depreciation and amortization (63,507) (64,848)
Basis difference in investment income — (4,761)
Unrealized gain on derivative financial instruments (478) —
Gross deferred tax liability (63,985) (85,801)
Net deferred tax liability $ (12,454) $ (11,459)
The increase in tax loss and tax credit carry-forwards and corresponding decrease in the basis difference in revalued investments in 2008
relate to tax positions taken on the Company's investment losses. The increase in the valuation allowance relates primarily to additional
investment losses in 2008. The deferred tax liability relating to unrealized gains on investments was recognized through earnings in the
first quarter of 2008 in connection with the sale of investments to realign the portfolio. The amount and expiration dates of tax loss and
credit carryforwards (not tax effected) as of December 31, 2008 are as follows:
Expiration
(Amounts in thousands) Date Amount
U.S. federal and state loss carry-forwards 2012-2028 $ 838,000
U.S. federal tax credit carry-forwards 2012-2028 26,526
U.S. federal tax credit carry-forwards Indefinite 18,868
The Company, or one of its subsidiaries, files income tax returns in the U.S. federal jurisdiction and various states and foreign
jurisdictions. With a few exceptions, the Company is no longer subject to foreign or U.S. federal, state and local income tax examinations
for years prior to 2005. The Company is subject to foreign, U.S. federal and
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