|12 Months Ended|
Dec. 31, 2016
|Income Tax Disclosure [Abstract]|
The provision for income taxes consisted of the following:
Domestic and foreign income before income taxes was as follows:
The provision for income taxes reconciles with the U.S. federal statutory rate, as follows:
We record deferred income taxes using enacted tax laws and rates for the years in which the taxes are expected to be paid. Deferred income tax assets and liabilities are recorded based on the differences between the financial reporting and income tax bases of assets and liabilities. For additional information about our income tax policy, see Note 1 of the Notes to Consolidated Financial Statements.
Components of the deferred income tax assets and liabilities at December 31, 2016 and 2015, were as follows:
In connection with the Veda acquisition, the Company acquired tax basis in goodwill in excess of the amount recorded for financial reporting purposes. The tax basis is only realizable upon a sale of the business. As such, the Company recorded a deferred tax asset of $113.8 million with a corresponding valuation allowance in acquisition accounting.
Our deferred income tax assets and deferred income tax liabilities at December 31, 2016 and 2015, are included in the accompanying Consolidated Balance Sheets as follows:
We record deferred income taxes on the temporary differences of our foreign subsidiaries and branches, except for the temporary differences related to undistributed earnings of subsidiaries which we consider indefinitely invested. As of December 31, 2016, we have indefinitely invested $85.7 million attributable to pre-2004 undistributed earnings of our Canadian and Chilean subsidiaries. If the pre-2004 earnings were not considered indefinitely invested, it would not result in any additional income tax.
At December 31, 2016, we had U.S. federal and state net operating loss carryforwards of $62.7 million which will expire at various times between 2017 and 2032. We also had foreign net operating loss carryforwards totaling $714.9 million of which $8.5 million will expire between 2017 and 2036 and the remaining $706.4 million will carryforward indefinitely. Foreign capital loss carryforwards of $15.3 million may be carried forward indefinitely, and state capital loss carryforwards of $2.5 million will expire in 2018. We had foreign tax credit carryforwards of $56.9 million, of which $30.7 million will expire in the years 2022 through 2026 and $26.2 million will be available to be utilized upon repatriation of foreign earnings. Additionally, we had U.S. and foreign research and development credit carryforwards of $13.7 million. The U.S. credits expire between 2018 through 2026 and the foreign credits have an indefinite expiration period. The deferred tax asset related to the net operating loss, capital loss carryforwards, foreign tax credit carryforwards, and research and development credit is $283.8 million of which $193.5 million has been fully reserved in the deferred tax valuation allowance.
Cash paid for income taxes, net of amounts refunded, was $173.4 million, $202.9 million and $148.2 million during the twelve months ended December 31, 2016, 2015 and 2014, respectively.
We recognize interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes on our Consolidated Statements of Income.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
We recorded liabilities of $36.0 million and $24.6 million for unrecognized tax benefits as of December 31, 2016 and 2015, respectively, which included interest and penalties of $3.5 million and $3.0 million, respectively. As of December 31, 2016 and 2015, the total amount of unrecognized benefits that, if recognized, would have affected the effective tax rate was $33.3 million and $22.0 million, respectively, which included interest and penalties of $2.8 million and $2.6 million, respectively. During 2016 and 2015 interest and penalties of $1.1 million and $1.3 million respectively were accrued.
Equifax and its subsidiaries are subject to U.S. federal, state and international income taxes. We are generally no longer subject to federal, state or international income tax examinations by tax authorities for years before 2012. Due to the potential for resolution of state and foreign examinations, and the expiration of various statutes of limitations, it is reasonably possible that Equifax’s gross unrecognized tax benefit balance may change within the next twelve months by a range of zero to $7.1 million.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/presentationRef