Washington Post 2012 Annual Report Download - page 92

9. INCOME TAXES
Income from continuing operations before income taxes consists of
the following:
(in thousands) 2012 2011 2010
U.S. ................. $103,094 $235,653 $555,646
Non-U.S. ............. 17,516 11,875 22,673
$120,610 $247,528 $578,319
2011 non-U.S. results include a loss from a $9.2 million impairment
charge with respect to an investment in a non-U.S. affiliate.
The provision for income taxes on income from continuing
operations consists of the following:
(in thousands) Current Deferred Total
2012
U.S. Federal ........... $ 99,424 $(48,685) $ 50,739
State and Local ......... 14,062 (5,135) 8,927
Non-U.S. .............. 12,631 (697) 11,934
$126,117 $(54,517) $ 71,600
2011
U.S. Federal ............ $ 40,450 $ 26,732 $ 67,182
State and Local ......... 15,937 10,475 26,412
Non-U.S. .............. 9,129 (823) 8,306
$ 65,516 $ 36,384 $101,900
2010
U.S. Federal ............ $137,943 $ 12,040 $149,983
State and Local ......... 28,366 34,011 62,377
Non-U.S. .............. 11,030 (990) 10,040
$177,339 $ 45,061 $222,400
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) 2012 2011 2010
U.S. Federal taxes at statutory
rate ................... $42,213 $ 86,635 $202,412
State and local taxes, net of U.S.
Federal tax .............. 9,247 4,143 26,689
Valuation allowances against
state tax benefits, net of U.S.
Federal tax .............. (3,443) 9,748 13,856
Tax provided on non-U.S.
subsidiary earnings and
distributions at less than the
expected U.S. Federal
statutory tax rate .......... (7,320) (6,882) (4,327)
Valuation allowances against
non-U.S. income tax
benefits ................ 15,966 8,072 2,921
Goodwill impairments ....... 12,776 ——
U.S. Federal Manufacturing
Deduction tax (benefit)
expense ................ (3,323) 1,365 (8,419)
Other, net ................ 5,484 (1,181) (10,732)
Provision for Income Taxes ... $71,600 $101,900 $222,400
Results for 2011 include $1.4 million in income tax expense related
to the U.S. Federal manufacturing deduction; this amount reflects a
2011 tax benefit, offset by a change in estimate for 2010.
During 2012, 2011 and 2010, in addition to the income tax
provision for continuing operations presented above, the Company
also recorded tax benefits on discontinued operations. Losses from
discontinued operations and gains or losses on sales and dispos-
itions 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 $66.7
million, $5.8 million and $14.9 million with respect to discontinued
operations were recorded in 2012, 2011 and 2010, respectively.
Deferred income taxes at December 31, 2012 and December 31,
2011, consist of the following:
(in thousands) 2012 2011
Accrued postretirement benefits ......... $ 25,287 $ 28,525
Other benefit obligations ............. 123,306 112,646
Accounts receivable ................. 31,073 28,047
State income tax loss carryforwards ...... 34,578 34,506
U.S. Federal income tax
loss carryforwards ................. 2,857 6,301
U.S. Federal capital loss carryforwards . . . 10,837 —
U.S. Federal foreign income tax
credit carryforwards ............... 6,781 —
Non-U.S. income tax loss carryforwards . . 27,039 14,906
Other ........................... 58,133 60,881
Deferred Tax Assets ................ 319,891 285,812
Valuation allowances ................ (78,109) (59,179)
Deferred Tax Assets, Net ............. $241,782 $226,633
Property, plant and equipment ......... 175,025 200,054
Prepaid pension cost ................ 241,846 213,663
Unrealized gain on available-for-sale
securities ....................... 73,712 53,588
Goodwill and other intangible assets ..... 276,652 291,346
Deferred Tax Liabilities .............. $767,235 $758,651
Deferred Income Tax Liabilities, Net .... $525,453 $532,018
The Company has approximately $666.7 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)
2013 ........................................ $ 5.7
2014 ........................................ 6.1
2015 ........................................ 5.1
2016 ........................................ 5.4
2017 ........................................ 1.5
2018 and after ................................. 642.9
Total ........................................ $666.7
The Company has recorded at December 31, 2012, approx-
imately $34.6 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 established a full valuation
allowance reducing the net recorded amount of deferred tax assets
with respect to state tax loss carryforwards, since the Company has
determined that it is more likely than not that the state tax losses may
not be fully utilized in the future to reduce state taxable income.
The Company has approximately $8.1 million of U.S. Federal
income tax loss carryforwards obtained as a result of prior stock
80 THE WASHINGTON POST COMPANY