Western Union 2015 Annual Report Download - page 225

THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
123
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,
2015 2014
Deferred tax assets related to:
Reserves, accrued expenses and employee-related items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 87.1 $ 81.8
Tax attribute carryovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.2 41.0
Pension obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.5 26.7
Intangibles, property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.9 12.1
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.2 13.6
Valuation allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (33.2)(46.6)
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158.7 128.6
Deferred tax liabilities related to:
Intangibles, property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410.9 428.1
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.5 5.5
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423.4 433.6
Net deferred tax liability (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 264.7 $ 305.0
____________
(a) As of December 31, 2015, deferred tax assets that cannot be fully offset by deferred tax liabilities in the respective tax
jurisdictions are reflected in "Other assets" in the Consolidated Balance Sheets.
The valuation allowances are primarily the result of uncertainties regarding the Company's ability to recognize tax benefits
associated with certain U.S. foreign tax credit carryforwards, certain foreign net operating losses, and certain foreign undistributed
earnings. Such uncertainties include generating sufficient income, generating sufficient U.S. foreign tax credit limitation related
to passive income, and demonstrating the ability to distribute certain foreign earnings. Changes in circumstances, or the
identification and implementation of relevant tax planning strategies, could make it foreseeable that the Company will recover
these deferred tax assets in the future, which could lead to a reversal of these valuation allowances and a reduction in income tax
expense.
Uncertain Tax Positions
The Company has established contingency reserves for a variety of material, known tax exposures. As of December 31, 2015,
the total amount of tax contingency reserves was $113.1 million, including accrued interest and penalties, net of related items. The
Company's tax reserves reflect management's judgment as to the resolution of the issues involved if subject to judicial review or
other settlement. 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.
201 FORM 10 K
5 -