Equifax 2008 Annual Report Download - page 57

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Tax Matters. In 2003, the Canada Revenue Agency, or Domestic and foreign income before income taxes was as
CRA, issued Notices of Reassessment asserting that follows:
Acrofax, Inc., our wholly-owned Canadian subsidiary, is lia-
ble for additional tax for the 1995 through 2000 tax years, Twelve Months Ended
related to certain intercompany capital contributions and December 31,
loans. The additional tax sought by the CRA for these peri- (In millions) 2008 2007 2006
ods ranges, based on alternative theories, from $7.0 million
($8.5 million in Canadian dollars) to $15.6 million U.S. $ 211.5 $ 260.6 $ 298.0
($19.0 million in Canadian dollars) plus interest and penal- Foreign 194.4 164.0 117.9
ties. Subsequently in 2003, we made a statutorily-required $ 405.9 $ 424.6 $ 415.9
deposit for a portion of the claim. We intend to vigorously
contest these reassessments and do not believe we have The provision for income taxes was reconciled with the
violated any statutory provision or rule. While we believe U.S. federal statutory rate, as follows:
our potential exposure is less than the asserted claims and
not material to our Consolidated Financial Statements, if Twelve Months Ended
the final outcome of this matter was unfavorable to us, an December 31,
additional claim may be filed by the local province. The
likelihood and potential amount of such claim is unknown (In millions) 2008 2007 2006
at this time. We cannot predict when this tax matter will be Federal statutory rate 35.0% 35.0% 35.0%
resolved. Provision computed at
federal statutory
rate $ 142.2 $ 148.6 $ 145.6
6. INCOME TAXES
State and local taxes,
We record deferred income taxes using enacted tax laws net of federal tax
and rates for the years in which the taxes are expected to benefit 6.8 3.6 0.6
be paid. Deferred income tax assets and liabilities are Foreign 1.3 3.9 6.9
recorded based on the differences between the financial Valuation allowance (8.7) (2.6) (0.7)
reporting and income tax bases of assets and liabilities. For
Tax reserves* (12.2) 1.7 (7.0)
additional information about our income tax policy, see
Note 1 of the Notes to Consolidated Financial Statements. Other** 3.7 (3.3) (4.0)
Provision for income
The provision for income taxes from continuing operations
taxes $ 133.1 $ 151.9 $ 141.4
consisted of the following:
Effective income tax
Twelve Months Ended rate 32.8% 35.8% 34.0%
December 31,
* During the third quarters of 2008 and 2006, the applicable
(In millions) 2008 2007 2006 statute of limitations related to uncertain tax positions expired,
resulting in the reversal of the related income tax reserves.
Current: The reversals of these reserves resulted in income tax benefits
Federal $ 67.0 $ 91.3 $ 93.7 of $14.6 million and $9.5 million, respectively. These are
State 9.2 8.1 6.0 reflected in tax reserves on the effective tax reconciliation and
reduced our 2008 and 2006 effective tax rates by 3.6% and
Foreign 49.2 48.1 44.3 2.3%, respectively.
125.4 147.5 144.0 ** During the second quarter of 2006, we recognized a
non-taxable gain of $14.1 million related to the litigation settle-
Deferred: ment with Naviant, Inc. The non-taxable gain reduced our
Federal 4.7 4.3 (0.8) 2006 effective rate by 1.3%.
State 1.6 (0.6) (4.5)
Foreign 1.4 0.7 2.7
7.7 4.4 (2.6)
Provision for income
taxes $ 133.1 $ 151.9 $ 141.4
2008 ANNUAL REPORT 55