Equifax 2003 Annual Report Download - page 54

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NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS
EQUIFAX. INFORMATION THAT EMPOWERS. 51
8. INCOM E TAXES
We record deferred income taxes, using enacted tax laws and rates
for the years in which the taxes are expected to be paid. Deferred
income tax assets and liabilities are recorded, based on the differ-
ences between the financial reporting and income tax bases of
assets and liabilities.
The provision for income taxes from continuing operations consists
of the following:
(In millions) 2003 2002 2001
Current:
Federal $63.5 $71.9 $65.7
State 5.7 10.0 8.4
Foreign 22.8 20.6 5.7
92.0 102.5 79.8
Deferred:
Federal 11.4 23.3 5.7
State –(1.9) (2.5)
Foreign 1.2 (0.3) 2.3
12.6 21.1 5.5
$104.6 $123.6 $85.3
Domestic and foreign income from continuing operations before
income taxes was as follows:
(In millions) 2003 2002 2001
United States $214.9 $264.5 $197.6
Foreign 68.2 50.4 5.0
$283.1 $314.9 $202.6
The provision for income taxes from continuing operations is
reconciled with the federal statutory rate, as follows:
(In millions) 2003 2002 2001
Federal statutory rate 35.0% 35.0% 35.0%
Provision computed at federal
statutory rate $99.1 $110.2 $70.9
State and local taxes,
net of federal tax benefit 0.6 5.0 3.8
Nondeductible goodwill
(including amounts related
to divestitures) ––6.7
Foreign (8.3) (8.8) 1.3
Valuation allowance 7.4 21.1 –
Other 5.8 (3.9) 2.6
$104.6 $123.6 $85.3
Components of the deferred income tax assets and liabilities at
December 31, 2003 and 2002 are as follows:
(In millions) 2003 2002
Deferred income tax assets:
Postretirement benefits $71.5 $70.2
Employee compensation programs 12.6 11.5
Deferred revenue 7.0 6.9
Depreciation 0.2 6.2
Net operating loss carryforwards
of subsidiaries 46.8 42.3
Foreign tax credits 19.1 22.2
Valuation allowance (60.1) (52.7)
Other 3.6 5.0
100.7 111.6
Deferred income tax liabilities:
Reserves and accrued expenses (7.9) (2.4)
Data files and other assets (50.5) (44.6)
Pension expense (61.9) (47.2)
Undistributed earnings
of foreign subsidiaries (8.0) (11.7)
Other (1.2) (10.7)
(129.5) (116.6)
Net deferred income tax liability $ (28.8) $(5.0)
Our deferred income tax assets and liabilities at December 31,
2003 and 2002, are included in the accompanying consolidated
balance sheets as follows:
(In millions) 2003 2002
Deferred income tax assets $15.5 $20.9
Deferred income tax liabilities (44.3) (25.9)
Net deferred income tax liability $(28.8) $(5.0)
Accumulated undistributed retained earnings of Canadian sub-
sidiaries amounted to approximately $74.5 million at December 31,
2003. 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 $3.7 million of deferred income
taxes would have been provided. Such taxes, if ultimately paid,
may be recoverable as foreign tax credits in the United States.