Cash America 2012 Annual Report Download - page 155

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
130
The components of the provision for income taxes and the income to which it relates for the years ended
December 31, 2012, 2011 and 2010, were as follows (dollars in thousands):
Year Ended December 31,
2012 2011 2010
Income (loss) before income taxes:
Domestic $ 214,463 $225,351 $182,292
Foreign (28,143) (7,825) 2,221
Income before income taxes 186,320 217,526 184,513
Current provision:
Federal $ 81,756 $51,613 $ 56,215
Foreign 603 440 106
State and local 5,818 4,744 4,106
Total current provision for income taxes 88,177 56,797 60,427
Deferred provision (benefit):
Federal $ (8,031) $ 27,475 $ 7,700
Foreign 4,811 (2,998) 1,053
State and local (301) 1,086 89
Total deferred provision for income taxes (3,521) 25,563 8,842
Total provision for income taxes $ 84,656 $ 82,360 $69,269
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The Company recognized income tax expense of $84.7 million for the year ended December 31, 2012
compared to income tax expense of $82.4 million for the year ended December 31, 2011. The increase in income tax
expense and the effective tax rate for the year ended December 31, 2012 is primarily due to the Mexico Reorganization
as noted below and by the tax effect of lower earnings for the year ended December 31, 2012.
The effective tax rate on income differs from the federal statutory rate of 35% for the following reasons
(dollars in thousands):
Year Ended December 31,
2012 2011 2010
Tax provision computed at the federal statutory income tax rate $ 65,212 $ 76,134 $ 64,579
State and local income taxes, net of federal tax benefits 3,587 3,790 2,727
N
ondeductible lobbying 865 882 1,039
Foreign tax difference 2,027 587 442
Investment in Subsidiaries (9,338) - -
Change in deferred tax valuation allowance 21,846 - -
Other 457 967 482
Total provision $ 84,656 $ 82,360 $ 69,269
Effective tax rate 45.4 % 37.9 %37.5 %
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 As of December 31, 2012, the Company had net operating losses totaling $51.5 million related to its Mexico
subsidiaries. Mexico allows a ten year carry-forward period, and, if unutilized, these net operating losses will expire in
varying amounts beginning in 2018.
The Company performs an evaluation of the recoverability of its deferred tax assets on a quarterly basis. The
Company establishes a valuation allowance if it is more-likely-than-not (greater than 50 percent) that all or some
portion of the deferred tax asset will not be realized. The Company analyzes several factors, including the nature and
frequency of operating losses, the Company’s carry-forward period for any losses, the reversal of future taxable