Western Union 2011 Annual Report Download - page 122
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THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences
between the book and tax bases of the Company’s assets and liabilities. The following table outlines the principal
components of deferred tax items (in millions):
December 31,
2011 2010
Deferred tax assets related to:
Reserves, accrued expenses and employee-related items .......................... $ 40.6 $ 61.6
Pension obligations ....................................................... 40.0 38.7
Tax attribute carryovers ................................................... 11.9 7.4
Other .................................................................. 20.6 16.7
Total deferred tax assets ...................................................... 113.1 124.4
Deferred tax liabilities related to:
Intangibles, property and equipment .......................................... 502.8 411.8
Other .................................................................. — 2.5
Total deferred tax liabilities ................................................... 502.8 414.3
Net deferred tax liability ...................................................... $ 389.7 $ 289.9
Uncertain Tax Positions
The Company has established contingency reserves for a variety of material, known tax exposures. As of
December 31, 2011, the total amount of tax contingency reserves was $135.0 million, including accrued interest
and penalties, net of related benefits. The Company’s tax reserves reflect management’s judgment as to the
resolution of the issues involved if subject to judicial review. While the Company believes its reserves are
adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised
by a tax authority will be resolved at a financial cost that does not exceed its related reserve. With respect to
these reserves, the Company’s income tax expense would include (i) any changes in tax reserves arising from
material changes during the period in the facts and circumstances (i.e., new information) surrounding a tax issue,
and (ii) any difference from the Company’s tax position as recorded in the financial statements and the final
resolution of a tax issue during the period. Such resolution could materially increase or decrease income tax
expense in the Company’s consolidated financial statements in future periods and could impact operating cash
flows.
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