Energizer 2006 Annual Report Download - page 31

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ENR 2006 ANNUAL REPORT 29
A reconciliation of income taxes with the amounts computed at the statutory federal rate follows:
2006 2005 2004
Computed tax at federal statutory rate $ 124.8 35.0% $ 136.0 35.0% $ 121.7 35.0%
State income taxes, net of federal tax benefit 1.9 0.5 3.0 0.8 3.0 0.9
Foreign tax less than the federal rate (17. 7) (5 . 0 ) (27.4) (7.0) (26.1) (7.5)
Foreign benefits recognized related to prior years’ losses (5.7) (1.6) (14.7) (3.8) (16.2) (4.7)
Adjustments to prior year tax accruals (10.9) (3.1) (10.6) (2.7) (8.5) (2.4)
Taxes on repatriation of foreign earnings under provisions
of the American Jobs Creation Act –– 9.0 2.3 – –
Other taxes on repatriation of foreign earnings 4.5 1.3 9.4 2.4 10.7 3.1
Other, net (1.2) (0.3) 3.3 0.8 2.2 0.6
Total $ 95.7 26.8% $ 108.0 27.8% $ 86.8 25.0%
4. Income Taxes
The provisions for income taxes consisted of the following for the years
ended September 30:
2006 2005 2004
Currently payable:
United States – Federal $ 63.7 $ 71.4 $ 62.6
State 3.6 5.3 5.1
Foreign 51.7 46.9 37.3
Total current 119.0 123.6 105.0
Deferred:
United States – Federal (15.8) (12.3) (5.1)
State (0.6) (1.7) (1.5)
Foreign (6.9) (1.6) (11. 6)
Total deferred (23.3) (15.6) (18.2)
Provision for income taxes $ 95.7 $ 108.0 $ 86.8
The source of pre-tax earnings was:
2006 2005 2004
United States $ 160.2 $ 150.6 $ 156.2
Foreign 196.4 238.1 191.6
Pre-tax earnings $ 356.6 $ 388.7 $ 347.8
In 2006, 2005 and 2004, $5.7, $14.7 and $16.2, respectively, of tax
benefits related to prior years’ losses were recorded. These benefits
related to foreign countries where our subsidiary subsequently began to
generate earnings and could reasonably expect future profitability
sufficient to utilize tax loss carryforwards prior to expiration. Improved
profitability in Mexico, Germany and Switzerland account for the bulk of
the amount recognized in 2006, 2005 and 2004, respectively.
Adjustments were recorded in each of the three years to revise
previously recorded tax accruals to reflect refinement of tax attribute
estimates to amounts in filed returns, settlement of tax audits and
changes in estimates related to uncertain tax positions in a number of
jurisdictions. Such adjustments decreased the income tax provision by
$10.9, $10.6 and $8.5 in 2006, 2005 and 2004, respectively.
The American Jobs Creation Act of 2004 (AJCA) introduced a special
one-time dividends received deduction on the repatriation of certain
foreign earnings to a U.S. taxpayer. The repatriation of foreign earnings
following the criteria prescribed by the AJCA generated an additional
tax provision in fiscal 2005 of $9.0.