Washington Post 2008 Annual Report Download - page 81

Deferred income taxes at December 28, 2008 and December 30
2007, consist of the following :
(in thousands) 2008 2007
Accrued postretirement benefits ......... $ 29,527 $ 33,551
Other benefit obligations ............. 108,427 137,626
Accounts receivable ................. 31,100 20,479
State income tax loss carryforwards ...... 16,859 11,845
U.S. Federal income tax loss
carryforwards .................... 10,494 12,301
Foreign income tax loss carryforwards .... 8,278 3,888
Other ........................... 27,844 27,035
Deferred tax assets .................. 232,529 246,725
(Valuation allowance) ................ (13,197) (5,535)
Deferred tax assets, net .............. $219,332 $241,190
Property, plant and equipment ......... 137,935 119,002
Prepaid pension cost ................ 126,805 410,590
Unrealized gain on available-for-sale
securities ....................... 48,441 102,369
Affiliate operations .................. 16,197 22,973
Goodwill and other intangibles ......... 239,346 249,551
Deferred tax liabilities ................ $568,724 $904,485
Deferred income tax liabilities, net ....... $349,392 $663,295
Deferred U.S. and state income taxes have been recorded for
undistributed earnings of investments in foreign subsidiaries to the
extent taxable dividend income would be recognized if such
earnings were distributed. Deferred income taxes recorded for
undistributed earnings of investments in foreign subsidiaries are net
of foreign tax credits estimated to be available.
Deferred U.S. and state income taxes have not been recorded for
the full book value and tax basis differences related to investments
in foreign subsidiaries because such investments are expected to be
indefinitely held. The book value exceeded the tax basis of
investments in foreign subsidiaries by approximately $77.6 million
and $45.5 million at December 28, 2008 and December 30,
2007, respectively. If the investments in foreign subsidiaries were
held for sale, instead of expected to be held indefinitely, additional
U.S. and state deferred income tax liabilities, net of foreign tax
credits estimated to be available on undistributed earnings, of
approximately $16.6 million and $10.9 million would have been
recorded at December 28, 2008 and December 30, 2007,
respectively.
The Company has approximately $29.9 million of U.S. Federal
income tax loss carryforwards obtained as a result of prior stock
acquisitions. These U.S. Federal income tax loss carryfowards are
expected to be fully utilized; during 2009 through 2013, approx-
imately $5 million a year are expected to be utilized, and during
2014 through 2025, the balance is expected to be utilized.
The Company has approximately $316.3 million of state income
tax loss carryforwards available to offset future state taxable income
and has established, with respect to these losses, approximately
$16.9 million in deferred state income taxes, net of U.S. Federal
income tax. The Company has also established approximately $2.7
million in valuation allowances against net deferred state taxes for
the portion of state tax loss carryforwards that may not be fully
utilized to reduce future state taxable income. State income tax loss
carryforwards, if unutilized, will start to expire approximately as
follows:
(in millions)
2009 ........................................ $ 6.7
2010 ........................................ 1.7
2011 ........................................ 7.5
2012 ........................................ 1.9
2013 ........................................ 1.7
2014 and after ................................. 296.8
Total ......................................... $316.3
The Company has approximately $29.7 million of foreign income
tax loss carryforwards, mainly as a result of prior stock acquisitions,
that are available to offset future foreign taxable income and has
established, with respect to these losses, approximately $8.3 million
in deferred foreign income tax benefits. The Company has also
established approximately $2.1 million in valuation allowances
against the deferred tax benefits recorded for the portion of foreign
tax losses that may not be fully utilized to reduce future foreign
taxable income. Substantially all foreign income tax loss
carryforwards may be carried forward indefinitely.
The company has $11.1 million in valuation allowances against
state income tax benefits recognized, net of U.S. Federal income
tax. As stated above, approximately $2.7 million of this valuation
allowance, net of U.S. Federal income tax, relates to state income
tax loss carryforwards. The valuation allowances established
against state income tax benefits recorded may increase or
decrease within the next 12 months based on operating results or
the market value of investment holdings; as a result, the Company is
unable to estimate the potential tax impact given the uncertain
operating and market environment. The Company has not recorded
valuation allowances against any U.S. Federal income tax benefits
and has established valuation allowances against foreign income
tax benefits recorded only with respect to certain foreign tax loss
carryforwards. The Company does not currently anticipate that
within the next 12 months there will be any events requiring
significant increases or decreases in U.S. Federal or foreign
valuation allowances.
The Company files income tax returns with the U.S. Federal
government and various state and foreign jurisdictions, with the U.S.
Federal considered the only major tax jurisdiction. The statute of
limitations has expired on all consolidated U.S. Federal corporate
income tax returns filed through 2004, and the Internal Revenue
Service is not currently examining any of the post-2004 returns filed
by the Company.
The Company implemented FIN 48 in the first quarter of 2007,
and there was no impact on the Company’s financial position or
results of operations as a result of the implementation.
2008 FORM 10-K 69