World Fuel Services 2013 Annual Report Download - page 79

For 2012, our effective income tax rate was 16.0%, for an income tax provision of $38.2 million, as compared to an effective income
tax rate of 16.4% and an income tax provision of $39.0 million for 2011. The lower effective income tax rate for 2012 resulted primarily
from differences in the actual results of our subsidiaries in tax jurisdictions with different income tax rates as compared to 2011, the
reduction of certain income tax reserves for uncertain tax positions due to a discrete item related to a change in estimate, statute of
limitation lapses, and the settlement of an income tax audit.
U.S. income taxes have not been provided on undistributed earnings of foreign subsidiaries. As of December 31, 2013 and 2012, we
had $1.1 billion and $934.5 million, respectively, of earnings attributable to foreign subsidiaries. Our intention is to reinvest these
earnings permanently in active non-U.S. business operations. Therefore, no income tax liability has been accrued for these earnings.
Because of the availability of U.S. foreign tax credits, it is not practicable to determine the amount of U.S. income tax payable if such
earnings are not reinvested indefinitely.
The temporary differences which comprise our net deferred tax liabilities are as follows (in thousands):
As of December 31,
2013 2012
Gross Deferred Tax Assets:
Bad debt reserve $ 6,426 $ 4,573
Net operating loss 774 675
Accrued and other shared-based compensation 21,393 14,909
Accrued expenses 10,032 2,069
Unrealized derivative losses 558 316
Customer deposits 5,149 7,545
Unrealized foreign exchange 6,082 914
Total gross deferred tax assets 50,414 31,001
Less: Valuation allowance ——
Gross deferred tax assets, net of valuation allowance 50,414 31,001
Deferred Tax Liabilities:
Depreciation (19,199) (11,999)
Goodwill and intangible assets (28,099) (23,108)
Prepaid expenses, deductible for tax purposes (3,452) (1,719)
Other (740) (1,330)
Gross deferred tax liabilities (51,490) (38,156)
Net deferred tax liabilities $ (1,076) $ (7,155)
Reported on the consolidated balance sheets as:
Other current assets for deferred tax assets, current $ 32,118 $ 15,282
Identifiable intangible and other non-current assets for deferred tax assets, non-current $ 16,342 $ 5,406
Accrued expenses and other current liabilities for deferred tax liabilities, current $ 3,229 $ 6,084
Non-current income tax liabilities, net for deferred tax liabilities, non-current $ 46,307 $ 21,759
As of December 31, 2013 and 2012, we had foreign net operating losses (‘‘NOLs’’) of approximately $2.6 million and $2.8 million,
respectively. The NOLs as of December 31, 2013 originated in various foreign countries including India, Brazil, and The Netherlands.
We have recorded a deferred tax asset of $0.8 million reflecting the benefit of the NOL carryforward as of December 31, 2013. This
deferred tax asset expires as follows (in thousands):
Deferred
Expiration Date Tax Asset
December 31, 2014 $74
December 31, 2021 76
December 31, 2022 455
Indefinite 169
Total $774
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