First Data 2011 Annual Report Download - page 119

Income tax payments, net of refunds received, of $67.2 million in 2011 were greater than current expense primarily as a result of
the decreased liability for unrecognized tax benefits reducing current expense. Income tax payments, net of refunds received, of
$100.5 million in 2010 were greater than current expense primarily as a result of the decreased liability for unrecognized tax benefits
reducing current expense. Income tax payments, net of refunds received, of $79 million in 2009 were less than current expense
primarily as a result of the increased liability for unrecognized tax benefits increasing current expense.
Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the book
and tax bases of the Company's assets and liabilities. Valuation allowances are recorded to reduce deferred tax assets when it is more
likely than not that a tax benefit will not be realized. Deferred tax assets are included in both "Other current assets" and "Other long-
term assets" in the Company's Consolidated Balance Sheets. Deferred tax liabilities are included in "Deferred long-term tax liabilities"
in the Company's Consolidated Balance Sheets. The following table outlines the principal components of deferred tax items:
As of December 31,
(in millions) 2011 2010
Deferred tax assets related to:
Reserves and other accrued expenses $ 450.3 $ 360.1
Pension obligations 44.2 43.4
Employee related liabilities 64.0 59.8
Deferred revenues 26.7 15.3
Unrealized securities and hedging (gain)/loss 42.2 101.7
Net operating losses and tax credit carryforwards 956.1 772.8
U.S. foreign tax credits on undistributed earnings 203.2 171.4
Foreign exchange (gain)/loss 61.5 23.1
Total deferred tax assets 1,848.2 1,547.6
Valuation allowance (364.2)(287.2)
Realizable deferred tax assets 1,484.0 1,260.4
Deferred tax liabilities related to:
Property, equipment and intangibles (1,382.0) (1,549.8)
Investment in affiliates and other (532.7) (472.6)
U.S. tax on foreign undistributed earnings (145.9)(113.7)
Total deferred tax liabilities (2,060.6)(2,136.1)
Net deferred tax liabilities $ (576.6)$ (875.7)
The Company's deferred tax assets and liabilities were included in the Consolidated Balance Sheets as follows:
As of December 31,
(in millions) 2011 2010
Current deferred tax assets $ 108.3 $ 126.4
Long-term deferred tax assets 10.5 11.6
Long-term deferred tax liabilities (695.4)(1,013.7)
Net deferred tax liabilities $ (576.6)$ (875.7)
As of December 31, 2011 and December 31, 2010 the Company had recorded valuation allowances of $364.2 million and
$287.2 million, respectively, against federal, state and foreign net operating losses and foreign tax credits. The increase to the
valuation allowance of $77.0 million in 2011 was primarily due to current year foreign net operating losses which may not be utilized
within the statute of limitations and foreign tax credits for which it is likely that no benefit will be realized in the future.
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