Equifax 2010 Annual Report Download - page 58

Our deferred income tax assets, included in other current assets, and
liabilities at December 31, 2010 and 2009, are included in the
accompanying Consolidated Balance Sheets as follows:
December 31,
(In millions) 2010 2009
Current deferred income tax assets,
included in other current assets $ 10.7 $ 14.5
Long-term deferred income
tax liabilities (244.2) (249.3)
Net deferred income tax liability $(233.5) $(234.8)
We record deferred income taxes on the temporary differences of our
foreign subsidiaries and branches, except for the temporary differ-
ences related to undistributed earnings of subsidiaries which we
consider indefinitely invested. We have indefinitely invested
$85.7 million attributable to pre-2004 undistributed earnings of our
Canadian and Chilean subsidiaries. If the pre-2004 earnings were not
considered indefinitely invested, $6.4 million of deferred U.S. income
taxes would have been provided. Such taxes, if ultimately paid, may
be recoverable as U.S. foreign tax credits.
At December 31, 2010, we had U.S. federal and state net operating
loss carryforwards of $102.4 million which will expire at various times
between 2012 and 2029. We also had foreign net operating loss car-
ryforwards totaling $305.8 million of which $33.2 million will expire
between 2013 and 2017 and the remaining $272.6 million will carry-
forward indefinitely. U.S. federal and state capital loss carryforwards
total $1.6 million at December 31, 2010, all of which will expire by
2012. Foreign capital loss carryforwards of $20.6 million may be car-
ried forward indefinitely. Additionally, we had foreign tax credit
carryforwards of $55.2 million, of which $4.3 million will begin to
expire in 2015, $22.6 million will be available to be utilized upon
repatriation of foreign earnings and $28.3 million will be realized as
foreign deferred tax liabilities reverse. We also had state credit carry-
forwards of $1.4 million which will begin expiring in 2017. Tax-
effected state and foreign net operating losses and capital losses of
$87.2 million have been fully reserved in the deferred tax asset valua-
tion allowance.
Cash paid for income taxes, net of amounts refunded, was
$163.7 million, $103.2 million and $128.7 million during the
twelve months ended December 31, 2010, 2009 and 2008,
respectively.
We recognize interest and penalties accrued related to unrecognized
tax benefits in the provision for income taxes on our Consolidated
Statements of Income.
A reconciliation of the beginning and ending amount of unrecognized
tax benefits is as follows:
(In millions) 2010 2009
Beginning balance (January 1) $19.4 $15.8
Increases related to prior year
tax positions 3.6 0.6
Decreases related to prior year
tax positions (0.5) (1.2)
Increases related to current year
tax positions 2.7 3.7
Decreases related to settlements (3.4) (0.3)
Expiration of the statute of limitations
for the assessment of taxes (1.6) (1.1)
Currency translation adjustment 0.3 1.9
Ending balance (December 31) $20.5 $19.4
We recorded liabilities of $27.9 million and $26.8 million for
unrecognized tax benefits as of December 31, 2010 and 2009,
respectively, which included interest and penalties of $7.4 million for
both years. As of December 31, 2010 and 2009, the total amount of
unrecognized benefits that, if recognized, would have affected the
effective tax rate was $19.7 million and $20.5 million, respectively,
which included interest and penalties of $5.5 million and $5.7 million,
respectively. The accruals for potential interest and penalties during
2010 and 2009 were not material.
Equifax and its subsidiaries are subject to U.S. federal, state and
international income taxes. We are generally no longer subject to
federal, state or international income tax examinations by tax authori-
ties for years before 2005, with few exceptions including those
discussed for Canada. In Canada, we are under audit by the Canada
Revenue Agency for the 1995 through 2002 tax years (see Note 6 of
the Notes to Consolidated Financial Statements). Due to the potential
for resolution of state and foreign examinations, and the expiration of
various statutes of limitations, it is reasonably possible that Equifax’s
gross unrecognized tax benefit balance may change within the next
twelve months by a range of zero to $7.1 million.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
EQUIFAX 2010 ANNUAL REPORT
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