Equifax 2012 Annual Report Download - page 59

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Equifax 2012 Annual Report
Our deferred income tax assets and deferred income tax liabilities at
December 31, 2012 and 2011, are included in the accompanying
Consolidated Balance Sheets as follows:
December 31,
(In millions) 2012 2011
Current deferred income tax assets,
included in other current assets $ 8.4 $ 10.6
Long-term deferred income tax assets,
included in other assets 4.7 5.6
Long-term deferred income tax
liabilities (227.7) (235.9)
Net deferred income tax liability $(214.6) $(219.7)
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, $5.7 million of deferred U.S. income
taxes would have been provided.
At December 31, 2012, we had U.S. federal and state net operating
loss carryforwards of $82.2 million which will expire at various times
between 2013 and 2029. We also had foreign net operating loss car-
ryforwards totaling $335.0 million of which $26.8 million will expire
between 2013 and 2029 and the remaining $308.2 million will
carryforward indefinitely. Foreign capital loss carryforwards of
$20.0 million may be carried forward indefinitely. The deferred tax
asset related to the net operating loss and capital loss carryforwards
is $107.3 million of which $100.0 million has been fully reserved in the
deferred tax valuation allowance. Additionally, we had foreign tax
credit carryforwards of $54.2 million, of which $5.9 million will expire
in 2022 and $48.3 million will be available to be utilized upon repatria-
tion of foreign earnings. We also had state credit carryforwards of
$0.6 million which will begin expiring in 2017.
Cash paid for income taxes, net of amounts refunded, was
$181.7 million, $127.5 million and $163.7 million during the twelve
months ended December 31, 2012, 2011 and 2010, 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) 2012 2011
Beginning balance (January 1) $19.9 $20.5
Increases related to prior year
tax positions 1.9 2.8
Decreases related to prior year
tax positions (0.5) (0.3)
Increases related to current year
tax positions 2.6 3.3
Decreases related to settlements (1.0) (3.9)
Expiration of the statute of limitations
for the assessment of taxes (3.3) (2.0)
Currency translation adjustment (0.1) (0.5)
Ending balance (December 31) $19.5 $19.9
We recorded liabilities of $24.2 million and $25.1 million for
unrecognized tax benefits as of December 31, 2012 and 2011,
respectively, which included interest and penalties of $4.5 million and
$5.2 million, respectively. As of December 31, 2012 and 2011, the
total amount of unrecognized benefits that, if recognized, would have
affected the effective tax rate was $20.6 million and $18.9 million,
respectively, which included interest and penalties of $4.1 million and
$4.5 million, respectively. The accruals for potential interest and
penalties during 2012 and 2011 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 2007. 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 $11.4 million.