Washington Post 2009 Annual Report Download - page 82

$10.7 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)
2010 ........................................ $ 7.2
2011 ........................................ 5.3
2012 ........................................ 3.8
2013 ........................................ 7.2
2014 ........................................ 6.4
2015 and after ................................. 495.7
Total ......................................... $525.6
The Company has approximately $25.0 million of U.S. Federal
income tax loss carryforwards obtained as a result of prior stock
acquisitions. These U.S. Federal income tax loss carryforwards are
expected to be fully utilized; during 2010 through 2013, approx-
imately $5.0 million a year is expected to be utilized, and during
2014 through 2025, the balance is expected to be utilized. The
Company has established approximately $8.8 million in deferred
U.S. Federal tax benefits with respect to these losses.
The Company has approximately $31.0 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 $8.9 million
in deferred foreign income tax benefits. The Company has also
established approximately $3.0 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. Approximately $28.0 million of foreign income tax
loss carryforwards may be carried forward indefinitely, and $3.0
million of foreign loss carryforwards, if unutilized, will start to expire
in 2012.
The Company has established $23.3 million in valuation
allowances against state income tax benefits recognized, net of
U.S. Federal income tax. As stated above, approximately $10.7
million of the valuation allowances, net of U.S. Federal income tax,
relate to state income tax loss carryforwards. The Company has
established valuation allowances against state income tax benefits
recognized, without considering potentially offsetting deferred tax
liabilities established with respect to prepaid pension cost and
goodwill. Prepaid pension cost and goodwill have not been
considered a source of future taxable income for realizing deferred
tax benefits recognized since these temporary differences are not
likely to reverse in the foreseeable future. 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 twelve months there will be any events requiring
significant increases or decreases in U.S. Federal or foreign
valuation allowances.
The changes in deferred tax valuation allowances during 2009 and
2008 were as follows:
(in thousands)
Balance at
Beginning
of Period
Additions –
Charged
to
Costs and
Expenses Deductions
Balance at
End of
Period
Year Ended January 3, 2010 .... $13,197 $13,042 — $ 26,239
Year Ended December 28, 2008 . . $ 5,535 $ 9,453 $(1,791) $13,197
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 2005, and the Internal Revenue
Service is not currently examining any of the post-2005 returns filed
by the Company.
The Company has determined that there are no material
transactions or material tax positions taken by the Company that
would fail to meet the more-likely-than-not threshold for recognizing
transactions or tax positions in the financial statements. In making
this determination, the Company presumes that all matters will be
examined with full knowledge of all relevant information by
appropriate taxing authorities and that the Company will pursue, if
necessary, resolution by related appeals or litigation. The Company
has accrued a tax liability for various tax positions reflected in the
consolidated financial statements where it is uncertain whether the
tax benefit associated with the tax positions will ultimately be
recognized in full. The amount of, and changes to, this accrued tax
liability are not material to the Company’s financial position or
results of operations, and the Company does not expect the total
amount of this accrued tax liability or the gross amount of any
unrecognized tax benefits to significantly increase or decrease
within the next 12 months.
I. DEBT
Long-term debt consists of the following:
(in millions) January 3, 2010 December 28, 2008
Commercial paper borrowings ...... $— $ 150.0
7.25% unsecured notes due
February 1, 2019 ............. 396.2 —
5.5% unsecured notes due
February 15, 2009 ............ —399.9
Other indebtedness .............. 3.1 3.9
Total ......................... 399.3 553.8
Less current portion ............... (3.1) (153.8)
Total long-term debt .............. $396.2 $ 400.0
At December 28, 2008, the average interest rate on the
Company’s outstanding commercial paper borrowings was 0.2%.
The Company’s other indebtedness at January 3, 2010 and
68 THE WASHINGTON POST COMPANY