Energizer 2000 Annual Report Download - page 35

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33
In 2000, Energizer recorded U.S. capital loss tax benefits of $24.4
related to the sale of Energizer’s Spanish affiliate. Energizer recog-
nized capital loss tax benefits of $16.6 and $48.4 in 1999 and 1998,
respectively, primarily related to past restructuring actions. The
capital loss benefits are not recognized in Energizer’s pro forma
financial results (see Note 23) as Energizer would not have been
able to realize these benefits on a stand-alone basis.
The effective tax rate for discontinued operations is higher than the
federal statutory rate in 1999 and 1998 due to state income taxes.
The deferred tax assets and deferred tax liabilities recorded on the
balance sheet as of September 30 are as follows:
2000 1999
Deferred Tax Liabilities:
Depreciation and property
differences $ (61.1) $ (64.7)
Pension plans (31.9) –
Gross deferred tax liabilities (93.0) (64.7)
Deferred Tax Assets:
Accrued liabilities 45.7 64.3
Tax loss carryforwards and
tax credits 25.6 46.4
Intangible assets 42.6 37.6
Postretirement benefits
other than pensions 28.8 –
Inventory differences 5.2 3.5
Other 8.8 12.1
Gross deferred tax assets 156.7 163.9
Valuation allowance (31.1) (66.8)
Net deferred tax assets $ 32.6 $ 32.4
Total deferred tax assets/liabilities shown above include current and
non-current amounts.
Tax loss carryforwards of $11.0 expired in 2000, primarily due to
the sale of Energizer’s Spanish affiliate. Future expiration of tax loss
carryforwards and tax credits, if not utilized, are as follows: 2001,
$.8; 2002, $.8; 2003, $2.2; 2004, $6.7; 2005, $3.6; thereafter or
no expiration, $11.5. The valuation allowance is primarily attributed
to deferred tax assets related to certain accrued liabilities, tax loss
carryforwards and tax credits outside the United States. The valua-
tion allowance decreased $35.7 in 2000 primarily due to the
decrease in tax loss carryforwards discussed above and other
deferred tax assets disposed of as part of the sale of Energizer’s
Spanish affiliate.
At September 30, 2000, approximately $65.9 of foreign subsidiary
net earnings were considered permanently invested in those busi-
nesses. Accordingly, U.S. income taxes have not been provided for
such earnings. It is not practicable to determine the amount of
unrecognized deferred tax liabilities associated with such earnings.