Western Union 2014 Annual Report Download - page 257

2014 FORM 10-K
THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
119
The decrease in the Company's effective tax rate for the year ended December 31, 2014 compared to 2013 is primarily due
to the combined effect of various discrete items, including those related to foreign currency fluctuations on certain income tax
attributes, and changes in tax contingency reserves, partially offset by changes in the composition of earnings between foreign
and domestic. The increase in the Company's effective tax rate for the year ended December 31, 2013 compared to 2012 is primarily
due to the combined effect of various discrete items, partially offset by an increasing proportion of profits that were foreign-derived
in 2013, and generally taxed at lower rates than the Company's combined federal and state tax rates in the United States. The
Company continues to benefit from a significant proportion of its profits being foreign-derived, and generally taxed at lower rates
than its combined federal and state tax rates in the United States. Certain portions of the Company's foreign source income are
subject to United States federal and state income tax as earned due to the nature of the income, and dividend repatriations of the
Company's foreign source income are generally subject to United States federal and state income tax.
The Company's provision for income taxes consisted of the following components (in millions):
Year Ended December 31,
2014 2013 2012
Current:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 76.1 $ 86.1 $ 117.2
State and local. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.7 8.1 (2.5)
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.8 73.6 63.4
Total current taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142.6 167.8 178.1
Deferred:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19.1) 2.2 (24.7)
State and local. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.2 (11.8)(12.3)
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.9)(29.7) 1.8
Total deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26.8)(39.3)(35.2)
$ 115.8 $ 128.5 $ 142.9
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,
2014 2013
Deferred tax assets related to:
Reserves, accrued expenses and employee-related items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 81.8 $ 57.0
Tax attribute carryovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.0 22.3
Pension obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.7 25.6
Intangibles, property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1 14.9
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.6 29.7
Valuation allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (46.6)(16.4)
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128.6 133.1
Deferred tax liabilities related to:
Intangibles, property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428.1 449.2
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 3.1
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433.6 452.3
Net deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 305.0 $ 319.2