Equifax 2011 Annual Report Download - page 59

Components of the deferred income tax assets and liabilities at
December 31, 2011 and 2010, were as follows:
December 31,
(In millions) 2011 2010
Deferred income tax assets:
Employee pension benefits $ 172.1 $ 138.6
Net operating and capital
loss carryforwards 102.0 104.0
Foreign tax credits 53.8 55.2
Employee compensation programs 49.4 43.8
Reserves and accrued expenses 8.9 12.8
Deferred revenue 8.7 5.8
Other 5.8 8.8
Gross deferred income tax assets 400.7 369.0
Valuation allowance (92.8) (87.2)
Total deferred income tax assets, net $ 307.9 $ 281.8
Deferred income tax liabilities:
Goodwill and intangible assets (322.1) (366.6)
Pension expense (122.1) (109.4)
Undistributed earnings of
foreign subsidiaries (44.8) (27.4)
Depreciation (17.5) (6.4)
Other (21.1) (5.5)
Total deferred income tax liability (527.6) (515.3)
Net deferred income tax liability $(219.7) $(233.5)
Our deferred income tax assets, included in other current assets,
and deferred income tax liabilities at December 31, 2011 and 2010,
are included in the accompanying Consolidated Balance Sheets
as follows:
December 31,
(In millions) 2011 2010
Current deferred income tax assets,
included in other current assets $ 8.1 $ 14.6
Long-term deferred income
tax liabilities (227.8) (248.1)
Net deferred income tax liability $(219.7) $(233.5)
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, $6.9 million of deferred U.S. income
taxes would have been provided.
At December 31, 2011, we had U.S. federal and state net operating
loss carryforwards of $75.6 million which will expire at various times
between 2012 and 2029. We also had foreign net operating loss car-
ryforwards totaling $311.8 million of which $29.0 million will expire
between 2012 and 2029 and the remaining $282.8 million will carry-
forward indefinitely. Foreign capital loss carryforwards of $19.2 million
may be carried forward indefinitely. The deferred tax asset related to
the net operating loss and capital loss carryforwards is $102.0 million
of which $92.1 million has been fully reserved in the deferred tax
valuation allowance. Additionally, we had foreign tax credit carryfor-
wards of $54.0 million which will be available to be utilized upon
repatriation of foreign earnings. We also had state credit carryfor-
wards of $0.9 million which will begin expiring in 2017.
Cash paid for income taxes, net of amounts refunded, was
$127.5 million, $163.7 million and $103.2 million during the twelve
months ended December 31, 2011, 2010 and 2009, 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) 2011 2010
Beginning balance (January 1) $20.5 $19.4
Increases related to prior year
tax positions 2.8 3.6
Decreases related to prior year
tax positions (0.3) (0.5)
Increases related to current year
tax positions 3.3 2.7
Decreases related to settlements (3.9) (3.4)
Expiration of the statute of limitations
for the assessment of taxes (2.0) (1.6)
Currency translation adjustment (0.5) 0.3
Ending balance (December 31) $19.9 $20.5
We recorded liabilities of $25.1 million and $27.9 million for
unrecognized tax benefits as of December 31, 2011 and 2010,
respectively, which included interest and penalties of $5.2 million and
$7.4 million, respectively. As of December 31, 2011 and 2010, the
total amount of unrecognized benefits that, if recognized, would have
affected the effective tax rate was $18.9 million and $19.7 million,
respectively, which included interest and penalties of $4.5 million and
$5.5 million, respectively. The accruals for potential interest and
penalties during 2011 and 2010 were not material.
EQUIFAX 2011 ANNUAL REPORT 57