星空传媒 Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

INCOME TAXES

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

听

Income Taxes

NOTE 15 - INCOME TAXES

Income (Loss) from Continuing Operations Before Income Taxes and Equity Income (Loss) from Ventures includes the following components:



听	听	(In Millions)
听	听	2012			听	2011		听	2010
United States	听	$	838.6		听	$	1,506.5	听	$	602.1
Foreign	听	(1,340.4		)	听	684.0		听	664.3
听	听	$	(501.8	)	听	$	2,190.5	听	$	1,266.4

The components of the provision (benefit) for income taxes on continuing operations consist of the following:



听	听	(In Millions)
听	听	2012			听	2011			听	2010
Current provision (benefit):	听	听			听	听			听	听
United States federal	听	$	71.1		听	$	246.8		听	$	109.6
United States state听& local	听	7.6			听	2.8			听	2.6
Foreign	听	50.2			听	224.7			听	155.1
听	听	128.9			听	474.3			听	267.3
Deferred provision (benefit):	听	听			听	听			听	听
United States federal	听	221.2			听	23.8			听	61.1
United States state听& local	听	1.4			听	4.7			听	5.2
Foreign	听	(95.6		)	听	(95.1		)	听	(51.1		)
听	听	127.0			听	(66.6		)	听	15.2
Total provision on income (loss) from continuing 听听听听operations	听	$	255.9		听	$	407.7		听	$	282.5

Reconciliation of our income tax attributable to continuing operations computed at the U.S. federal statutory rate is as follows:

听



听	听	(In Millions)
听	听	2012			听	2011			听	2010
Tax at U.S. statutory rate of 35 percent	听	$	(175.6	)	听	$	766.7		听	$	443.2
Increase (decrease) due to:	听	听			听	听			听	听
Foreign exchange remeasurement	听	62.3			听	(62.6		)	听	鈥�
Non-taxable loss (income) related to noncontrolling interests	听	61.0			听	(63.6		)	听	鈥�
Impact of tax law change	听	(357.1		)	听	鈥�			听	16.1
Percentage depletion in excess of cost depletion	听	(109.1		)	听	(153.4		)	听	(103.1		)
Impact of foreign operations	听	65.2			听	(44.0		)	听	(89.0		)
Legal entity restructuring	听	鈥�			听	鈥�			听	(87.4		)
Income not subject to tax	听	(108.0		)	听	(67.5		)	听	鈥�
Goodwill impairment	听	202.2			听	鈥�			听	鈥�
Non-taxable hedging income	听	鈥�			听	(32.4		)	听	鈥�
State taxes, net	听	7.3			听	7.5			听	3.1
Manufacturer鈥檚 deduction	听	(4.7		)	听	(11.9		)	听	鈥�
Valuation allowance	听	634.5			听	49.5			听	83.3
Tax uncertainties	听	(14.8		)	听	17.7			听	27.7
Other items 鈥� net	听	(7.3		)	听	1.7			听	(11.4		)
Income tax expense	听	$	255.9		听	$	407.7		听	$	282.5

The components of income taxes for other than continuing operations consisted of the following:



听	听	(In Millions)
听	听	2012			听	2011			听	2010
Other comprehensive (income) loss:	听	听			听	听			听	听
Pension/OPEB liability	听	$	13.8		听	$	(60.2	)	听	$	14.0
Mark-to-market adjustments	听	1.7			听	(17.7		)	听	1.7
Other	听	2.6			听	鈥�			听	鈥�
Total	听	$	18.1		听	$	(77.9	)	听	$	15.7
听	听	听			听	听			听	听
Paid in capital 鈥� stock based compensation	听	$	(12.8	)	听	$	(4.6	)	听	$	(4.0	)
Discontinued Operations	听	$	10.4		听	$	3.2		听	$	9.5

Significant components of our deferred tax assets and liabilities as of December听31, 2012 and 2011 are as follows:



听	听	(In Millions)
听	听	2012			听	2011
Deferred tax assets:	听	听			听	听
Pensions	听	$	161.2		听	$	154.8
MRRT starting base allowance	听	357.1			听	鈥�
Postretirement benefits other than pensions	听	87.7			听	109.8
Alternative minimum tax credit carryforwards	听	274.9			听	228.5
Capital loss carryforwards	听	鈥�			听	3.8
Investment in ventures	听	14.1			听	鈥�
Asset retirement obligations	听	48.2			听	42.9
Operating loss carryforwards	听	396.4			听	260.7
Product inventories	听	45.4			听	30.1
Properties	听	49.2			听	44.8
Lease liabilities	听	31.0			听	38.8
Other liabilities	听	140.9			听	149.3
Total deferred tax assets before valuation allowance	听	1,606.1			听	1,063.5
Deferred tax asset valuation allowance	听	858.4			听	223.9
Net deferred tax assets	听	747.7			听	839.6
Deferred tax liabilities:	听	听			听	听
Properties	听	1,350.5			听	1,345.0
Investment in ventures	听	207.6			听	155.9
Intangible assets	听	24.6			听	13.5
Income tax uncertainties	听	48.5			听	56.7
Financial derivatives	听	1.6			听	1.3
Product inventories	听	19.6			听	鈥�
Other assets	听	101.9			听	98.2
Total deferred tax liabilities	听	1,754.3			听	1,670.6
Net deferred tax (liabilities) assets	听	$	(1,006.6	)	听	$	(831.0	)

The deferred tax amounts are classified in the Statements of Consolidated Financial Position as current or long-term consistently with the asset or liability to which they relate. Following is a summary:



听	听	(In Millions)
听	听	2012			听	2011
Deferred tax assets:	听	听			听	听
United States	听	听			听	听
Current	听	$	5.2		听	$	17.7
Long-term	听	鈥�			听	162.8
Total United States	听	5.2			听	180.5
Foreign	听	听			听	听
Current	听	3.8			听	4.2
Long-term	听	151.5			听	46.7
Total deferred tax assets	听	160.5			听	231.4
Deferred tax liabilities:	听	听			听	听
United States	听	58.4			听	鈥�
Foreign	听	听			听	听
Long-term	听	1,108.7			听	1,062.4
Total deferred tax liabilities	听	1,167.1			听	1,062.4
Net deferred tax (liabilities)	听	$	(1,006.6	)	听	$	(831.0	)

At December听31, 2012 and 2011, we had $274.9 million and $228.5 million, respectively, of gross deferred tax assets related to U.S. alternative minimum tax credits that can be carried forward indefinitely.

We had gross state and foreign net operating loss carry forwards of $185.0 million, and $2.1 billion, respectively, at December听31, 2012. We had gross state and foreign net operating loss carryforwards at December听31, 2011 of, $147.1 million and $780.5 million, respectively. State net operating losses will begin to expire in 2022, and the foreign net operating losses will begin to expire in 2015. We had foreign tax credit carryforwards of $5.8 million at December听31, 2012 and December听31, 2011. The foreign tax credit carryforwards will begin to expire in 2020.

We recorded a $634.5 million net increase in the valuation allowance of certain deferred tax assets where management believes that realization of the related deferred tax assets is not more likely than not. Of this amount, $41.3 million relates to ordinary losses of certain foreign and state operations for which future utilization is currently uncertain, $11.0 million relates to certain foreign assets where tax basis exceeds book basis, $226.4 million relates to management's conclusion that it was more likely than not that the deferred tax asset related to the Alternative Minimum Tax credit would not be utilized and $357.1 million relates to the MRRT starting base deferred tax asset that has been determined to be unrealizable, and $1.2 million of previously recorded valuation allowance was reversed related to capital loss carryforwards that will be utilized.

At December听31, 2012 and 2011, cumulative undistributed earnings of foreign subsidiaries included in consolidated retained earnings amounted to $0.8 billion and $1.0 billion, respectively. These earnings are indefinitely reinvested in international operations. Accordingly, no provision has been made for U.S. deferred taxes related to future repatriation of these earnings, nor is it practical to estimate the amount of income taxes that would have to be provided if we were to conclude that such earnings will be remitted in the foreseeable future.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

听

(In Millions)

听

2012

听

2011

听

2010

Unrecognized tax benefits balance as of January听1

听

102.1

听

79.8

听

75.2

Increases for tax positions in prior years

听

2.7

听

42.1

听

1.9

Increases for tax positions in current year

听

11.1

听

29.5

听

鈥�

Increase due to foreign exchange

听

鈥�

听

鈥�

听

0.7

Settlements

听

(60.4

)

听

(3.5

)

听

鈥�

Lapses in statutes of limitations

听

鈥�

听

(45.8

)

听

鈥�

Other

听

鈥�

听

鈥�

听

2.0

Unrecognized tax benefits balance as of December听31

听

55.5

听

102.1

听

79.8

At December听31, 2012 and 2011, we had $55.5 million and $102.1 million, respectively, of unrecognized tax benefits recorded. Of this amount, $7.0 million and $45.6 million are recorded in Other liabilities and $48.5 million and $56.5 million are recorded as deferred tax assets in the Statements of Consolidated Financial Position. An agreement was reached with the taxing authorities resulting in a reversal of a prior liability for an uncertain tax position, the financial statement impact of which was an income tax benefit of $26.9 million. Additionally, the closure of a foreign examination resulted in the reversal of an unrecognized tax benefit in the amount of $23.8 million. The related liability was paid in a previous period, and there is no current period income statement impact resulting from this item. If the $55.5 million were recognized, the full amount would impact the effective tax rate. We do not expect that the amount of unrecognized tax benefits will change significantly within the next twelve months. At December听31, 2012 and 2011, we had $0.8 million and $2.5 million, respectively, of accrued interest and penalties related to the unrecognized tax benefits recorded in Other liabilities in the Statements of Consolidated Financial Position.

Tax years that remain subject to examination are years 2009 and forward for the U.S., 2006 and forward for Canada, and 2007 and forward for Australia.

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 109

-Paragraph 136, 172

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

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Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 109

-Paragraph 43, 44, 45, 46, 47, 48, 49

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

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+ Details