Western Union 2011 Annual Report Download - page 121

Download and view the complete annual report

Please find page 121 of the 2011 Western Union annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 169

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169

THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The Company’s effective tax rates differed from statutory rates as follows:
Year Ended December 31,
2011 2010 2009
Federal statutory rate ..................................................... 35.0% 35.0% 35.0%
State income taxes, net of federal income tax benefits ........................... 2.0% 1.9% 1.5%
Foreign rate differential ................................................... (13.9)% (15.3)% (12.5)%
IRS Agreement .......................................................... (16.1)% — —
Other .................................................................. 1.6% (1.1)% 1.0%
Effective tax rate ........................................................ 8.6% 20.5% 25.0%
The decrease in the Company’s effective tax rate for the year ended December 31, 2011 is primarily due to an
agreement with the United States Internal Revenue Service (“IRS”) resolving substantially all of the issues
related to the Company’s restructuring of its international operations in 2003, as described below, slightly offset
by higher taxes associated with the Finint and Costa remeasurement gains. The tax rate for the year ended
December 31, 2010 was impacted by a cumulative tax planning benefit from certain foreign acquisitions and the
settlement with the IRS of certain issues relating to the 2002-2004 tax years. The Company continues to benefit
from an increasing proportion of profits being foreign-derived, and therefore taxed at lower rates than its
combined federal and state tax rates in the United States.
The Company’s provision for income taxes consisted of the following components (in millions):
Year Ended December 31,
2011 2010 2009
Current:
Federal ........................................................ $ 36.2 $ 103.6 $ 235.8
State and local .................................................. 0.6 30.1 26.0
Foreign ........................................................ 51.2 73.0 41.8
Total current taxes .................................................. 88.0 206.7 303.6
Deferred:
Federal ........................................................ 41.9 28.6 (18.5)
State and local .................................................. 3.9 9.7 2.0
Foreign ........................................................ (24.6) (9.7) (4.4)
Total deferred taxes ................................................. 21.2 28.6 (20.9)
$ 109.2 $ 235.3 $ 282.7
114