Energizer 2002 Annual Report Download - page 34

In 2001, Energizer recorded a provision for goodwill impairment of $119.0,
for which there is no associated tax provision or benefit. See further dis-
cussion in Note 8.
Prior to spin-off, U.S. income tax payments, refunds, credits, provision
and deferred tax components have been allocated to Energizer in
accordance with Ralston’s tax allocation policy. Such policy allocates
tax components included in the consolidated income tax return of
Ralston to Energizer to the extent such components were generated
by or related to Energizer. Subsequent to the spin-off, taxes are provided
on a stand-alone basis.
Had the Energizer tax provision been calculated as if Energizer was a
separate, independent U.S. taxpayer, the income tax provision would
have been higher by approximately $23.4 in 2000. The higher provision
is due primarily to the $24.4 of capital loss benefits related to the sale
of Energizer’s Spanish affiliate that would not have been realized on a
stand-alone basis.
The deferred tax assets and deferred tax liabilities recorded on the bal-
ance sheet as of September 30 are as follows and include current and
noncurrent amounts:
2002 2001
Deferred tax liabilities:
Depreciation and property differences $ (74.2) $ (61.1)
Pension plans (43.2) (38.4)
Other tax liabilities, noncurrent (28.1) (14.5)
Gross deferred tax liabilities (145.5) (114.0)
Deferred tax assets:
Accrued liabilities 72.0 58.8
Tax loss carryforwards and tax credits 38.1 28.6
Intangible assets 48.3 46.9
Postretirement benefits other than pensions 34.6 35.3
Inventory differences 3.5 4.0
Other tax assets, noncurrent 7.1 7.5
Gross deferred tax assets 203.6 181.1
Valuation allowance (32.5) (35.1)
Net deferred tax assets $ 25.6 $ 32.0
Tax loss carryforwards of $.9 expired in 2002. Future expiration of tax
loss carryforwards and tax credits, if not utilized, are as follows: 2003,
$2.8; 2004, $3.3; 2005, $4.5; 2006, $3.0; 2007, $7.2; thereafter or no
expiration, $17.3. The valuation allowance is primarily attributed to
certain accrued liabilities, tax loss carryforwards and tax credits out-
side the United States. The valuation allowance decreased $2.6 in
2002 primarily due to tax loss carryforwards and tax credits utilized
in 2002.
At September 30, 2002, approximately $121.5 of foreign subsidiary net
earnings was considered permanently invested in those businesses.
Accordingly, U.S. income taxes have not been provided for such earn-
ings. It is not practicable to determine the amount of unrecognized
deferred tax liabilities associated with such earnings.
Energizer Holdings, Inc.
Notes to Consolidated Financial Statements Continued
(Dollars in millions, except per share data)
ENR 2002 Annual Report Page 32