Equifax 2001 Annual Report Download - page 47

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The provision for income taxes from continuing
operations is reconciled with the federal statu-
tory rate, as follows:
(in millions) 2001 2000 1999
Federal statutory rate 35.0% 35.0% 35.0%
Provision computed at
federal statutory rate $70.9 $87.3 $86.7
State and local taxes,
net of federal tax benefit 3.8 3.3 6.9
Nondeductible goodwill
(including amounts related
to divestitures) 6.7 8.8 4.4
Foreign 1.3 4.0 2.1
Other 2.6 4.9 (0.2)
$85.3 $108.3 $99.9
Components of the Company’s deferred income
tax assets and liabilities at December 31, 2001,
and 2000 are as follows:
(in millions) 2001 2000
Deferred income tax assets:
Reserves and accrued expenses $ 30.0 $ 15.5
Postretirement benefits 10.0 9.7
Employee compensation programs 9.9 13.5
Deferred revenue 4.7 9.9
Net operating loss carryforwards
of subsidiaries 1.3 1.4
Foreign tax credit carryforwards 28.5 26.6
Other 4.6 8.0
89.0 84.6
Deferred income tax liabilities:
Data files and other assets (54.4) (60.6)
Depreciation (0.5) (2.0)
Pension expense (40.8) (38.3)
Undistributed earnings of
foreign subsidiaries (36.3) (33.6)
Other (19.2) (11.8)
(151.2) (146.3)
Net deferred income tax liability $ (62.2) $ (61.7)
The Company’s deferred income tax assets and
liabilities at December 31, 2001 and 2000, are
included in the accompanying consolidated
balance sheets as follows:
(in millions) 2001 2000
Deferred income tax assets $ 26.4 $ 18.4
Deferred income tax liabilities (88.6) (80.1)
Net deferred income tax liability $(62.2) $(61.7)
Accumulated undistributed retained earnings
of Canadian subsidiaries amounted to approxi-
mately $38.8 million at December 31, 2001. No
provision for Canadian withholding taxes or
United States federal income taxes is made on
these earnings, because they are considered by
management to be permanently invested in
those subsidiaries and, under the tax laws, are
not subject to such taxes until distributed as
dividends. If the earnings were not considered
permanently invested, approximately $1.9 mil-
lion of deferred income taxes would have been
provided. Such taxes, if ultimately paid, may
be recoverable as foreign tax credits in the
United States.
8.
Shareholders’ Equity
Rights Plan In 1995, the Company’s Board of
Directors adopted a Shareholder Rights Plan
(Rights Plan). The Rights Plan contains provi-
sions to protect the Company’s shareholders in
the event of an unsolicited offer to acquire the
Company, including offers that do not treat all
shareholders equally, the acquisition in the open
market of shares constituting control without
offering fair value to all shareholders, and other
coercive, unfair or inadequate takeover bids and
practices that could impair the ability of the
Board to represent shareholders’ interests
fully. Pursuant to the Rights Plan, the Board
declared a dividend of one Share Purchase
Right (a Right) for each outstanding share of the
Company’s common stock, with distribution to
be made to shareholders of record as of
November 24, 1995. The Rights, which will expire
in November 2005, initially will be represented