Washington Post 2010 Annual Report Download - page 93

and has established, with respect to these losses, approximately
$27.7 million in deferred state income tax assets, net of U.S.
Federal income tax. The Company has also established approxi-
mately $23.9 million in valuation allowances, with respect to state
tax loss carryforwards, since all state tax losses may not be fully
utilized in the future to reduce state taxable income.
State income tax loss carryforwards, if unutilized, will start to expire
approximately as follows:
(in millions)
2011 ........................................ $ 10.0
2012 ........................................ 4.1
2013 ........................................ 6.4
2014 ........................................ 6.0
2015 ........................................ 7.2
2016 and after ................................. 490.0
Total ......................................... $523.7
The Company has approximately $23.1 million of U.S. Federal
income tax loss carryforwards obtained as a result of prior stock
acquisitions. These U.S. Federal income tax loss carryforwards
are expected to be fully utilized; during 2011 through 2013,
approximately $5.2 million a year is expected to be utilized, and
during 2014 through 2025, the balance is expected to be utilized.
The Company has established approximately $8.1 million in
deferred U.S. Federal tax assets with respect to these losses.
The Company has approximately $39.7 million of foreign income
tax loss carryforwards, mainly as a result of prior stock acquisitions,
that are available to offset future foreign taxable income, and has
established, with respect to these losses, approximately $10.8
million in deferred foreign income tax assets. The Company has also
established approximately $5.9 million in valuation allowances
against the deferred tax assets recorded for the portion of foreign tax
losses that may not be fully utilized to reduce future foreign taxable
income. Approximately $36.4 million of foreign income tax loss
carryforwards may be carried forward indefinitely, and $3.3 million
of foreign loss carryforwards, if unutilized, will start to expire in 2012.
The Company has established $35.5 million in valuation allow-
ances against state income tax assets recognized, net of U.S.
Federal income tax. As stated above, approximately $23.9 million
of the valuation allowances, net of U.S. Federal income tax, relate
to state income tax loss carryforwards. The Company has
established valuation allowances against state income tax assets
recognized, without considering potentially offsetting deferred tax
liabilities established with respect to prepaid pension cost and
goodwill. Prepaid pension cost and goodwill have not been
considered a source of future taxable income for realizing deferred
tax assets recognized since these temporary differences are not
likely to reverse in the foreseeable future. The valuation allowances
established against state income tax assets recorded may increase
or decrease within the next 12 months, based on operating results
or the market value of investment holdings; as a result, the
Company is unable to estimate the potential tax impact, given the
uncertain operating and market environment. The Company has not
established valuation allowances against any U.S. Federal income
tax assets and has established valuation allowances against foreign
income tax assets recorded only with respect to certain foreign tax
loss carryforwards. The Company does not currently anticipate
that within the next 12 months there will be any events requiring
significant increases or decreases in U.S. Federal or foreign
valuation allowances.
The changes in deferred tax valuation allowances during 2010,
2009 and 2008 were as follows:
(in thousands)
Balance at
Beginning
of Period
Additions –
Charged
to
Costs and
Expenses Deductions
Balance at
End of
Period
Year ended:
January 2, 2011 ..... $26,239 $16,777 $(1,657) $41,359
January 3, 2010 ...... $13,197 $13,042 — $26,239
December 28, 2008 . . . $ 5,535 $ 9,453 $(1,791) $13,197
The Company files income tax returns with the U.S. Federal
government and various state and foreign jurisdictions, with the U.S.
Federal considered the only major tax jurisdiction. The statute of
limitations has expired on all consolidated U.S. Federal corporate
income tax returns filed through 2006, and the Internal Revenue
Service is not currently examining any of the post-2006 returns filed
by the Company.
The Company endeavors to comply with tax laws and regulations
where it does business, but cannot guarantee that, if challenged,
the Company’s interpretation of all relevant tax laws and regulations
will prevail and that all tax benefits recorded in the financial
statements will ultimately be recognized in full. The Company has
taken reasonable efforts to address uncertain tax positions, and has
determined that there are no material transactions or material tax
positions taken by the Company that would fail to meet the more-
likely-than-not threshold for recognizing transactions or tax positions
in the financial statements. Accordingly, the Company has not
recorded a reserve for uncertain tax positions in the financial
statements, and the Company does not expect any significant tax
increase or decrease to occur within the next 12 months with
respect to any transactions or tax positions taken and reflected in
the financial statements. In making these determinations, the
Company presumes that taxing authorities pursuing examinations of
the Company’s compliance with tax law filing requirements will
have full knowledge of all relevant information, and, if necessary,
the Company will pursue resolution of disputed tax positions by
appeals or litigation.
J. DEBT
Long-term debt consists of the following:
(in millions)
January 2,
2011
January 3,
2010
7.25% unsecured notes
due February 1, 2019 ............. $396.7 $396.2
Other indebtedness ................. 3.0 3.1
Total ............................ 399.7 399.3
Less current portion ................. (3.0) (3.1)
Total long-term debt $396.7 $396.2
The Company’s other indebtedness at January 2, 2011 and
January 3, 2010 is at interest rates of 6% and matures in 2011.
In January 2009, the Company issued $400 million in unsecured
ten-year fixed-rate notes due February 1, 2019 (the Notes). The
2010 FORM 10-K 77