Washington Post 2011 Annual Report Download - page 88

9. INCOME TAXES
Income from continuing operations before income taxes consists of
the following:
(in thousands) 2011 2010 2009
United States (U.S.) ...... $207,527 $518,769 $245,532
Non-U.S. ............. 10,101 19,348 (325)
$217,628 $538,117 $245,207
2011 and 2009 non-U.S. results include losses from impairment
charges with respect to an investment in a non-U.S. affiliate of $9.2
million and $27.4 million, respectively.
The provision for income taxes on income from continuing
operations consists of the following:
(in thousands) Current Deferred Total
2011
U.S. Federal ............ $ 40,365 $ 26,635 $ 67,000
State and Local .......... 11,862 9,132 20,994
Non-U.S. .............. 9,129 (823) 8,306
$ 61,356 $ 34,944 $ 96,300
2010
U.S. Federal ........... $135,671 $ 10,162 $145,833
State and Local ......... 28,737 33,390 62,127
Non-U.S. .............. 11,030 (990) 10,040
$175,438 $ 42,562 $218,000
2009
U.S. Federal ........... $ 75,231 $ 2,685 $ 77,916
State and Local ......... 18,477 (13,445) 5,032
Non-U.S. .............. 8,429 (2,377) 6,052
$102,137 $(13,137) $ 89,000
The provision for income taxes on continuing operations exceeds
the amount of income tax determined by applying the U.S. Federal
statutory rate of 35% to income from continuing operations before
taxes as a result of the following:
(in thousands) 2011 2010 2009
U.S. Federal taxes at statutory
rate ................. $76,170 $188,341 $85,822
State and local taxes (benefit),
net of U.S. Federal tax .... 4,034 26,526 (4,508)
Valuation allowances against
state tax benefits, net of
U.S. Federal tax ........ 9,748 13,856 7,414
Tax provided on non-U.S.
subsidiary earnings and
distributions at less than the
expected U.S. Federal
statutory tax rate ........ (6,882) (4,327) (1,035)
Valuation allowances against
non-U.S. income tax
benefits .............. 8,072 2,921 254
Goodwill impairments ..... 4,173 8,066 2,972
U.S. Federal Manufacturing
Deduction tax expense
(benefit) .............. 1,365 (8,419) —
Other, net .............. (380) (8,964) (1,919)
Provision for income taxes . . $96,300 $218,000 $89,000
Results for 2011 include $1.4 million in income tax expense related
to the U.S. Federal manufacturing deduction; this amount reflects a
benefit in the current year, offset by a change in estimate for 2010.
During 2011, 2010 and 2009, in addition to the income tax
provision presented above for continuing operations, the Company
also recorded tax benefits on discontinued operations. Losses from
discontinued operations and gains or losses on sales of discontinued
operations have been reclassified from previously reported income
from operations and reported separately as loss from discontinued
operations, net of tax. Tax benefits of $0.2 million, $10.5 million
and $31.4 million with respect to discontinued operations were
recorded in 2011, 2010 and 2009, respectively.
Deferred income taxes at December 31, 2011 and January 2,
2011, consist of the following:
(in thousands) 2011 2010
Accrued postretirement benefits ......... $ 28,525 $ 27,012
Other benefit obligations ............. 112,646 118,039
Accounts receivable ................. 28,047 33,853
State income tax loss carryforwards ...... 34,506 27,674
U.S. Federal income tax loss
carryforwards .................... 6,301 8,120
Non-U.S. income tax loss carryforwards . . 14,906 10,827
Other ........................... 60,881 39,524
Deferred tax assets .................. 285,812 265,049
Valuation allowances ................ (59,179) (41,359)
Deferred tax assets, net .............. $226,633 $223,690
Property, plant and equipment ......... 200,054 187,934
Prepaid pension cost ................ 213,663 214,470
Unrealized gain on available-for-sale
securities ....................... 53,588 47,148
Goodwill and other intangible assets ..... 291,346 265,225
Deferred tax liabilities ................ $758,651 $714,777
Deferred income tax liabilities, net ....... $532,018 $491,087
The Company has approximately $669 million of state income tax
loss carryforwards available to offset future state taxable income.
State income tax loss carryforwards, if unutilized, will start to expire
approximately as follows:
(in millions)
2012 ........................................ $ 2.6
2013 ........................................ 7.0
2014 ........................................ 18.4
2015 ........................................ 8.0
2016 ........................................ 4.3
2017 and after ................................. 628.7
Total ......................................... $669.0
The Company has established at December 31, 2011 approximately
$34.5 million in deferred state income tax assets, net of U.S. Federal
income tax, with respect to these state income tax loss carryforwards.
The Company has also established approximately $31.9 million in
valuation allowances, with respect to state tax loss carryforwards, since
all state tax losses may not be fully utilized in the future to reduce state
taxable income.
76 THE WASHINGTON POST COMPANY