Energizer 2011 Annual Report Download - page 72

ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share and percentage data)
There were no material tax loss carryforwards that expired in fiscal 2011. Future expirations of tax loss carryforwards and tax
credits, if not utilized, are not material from 2012 through 2015, and thereafter or no expiration, $22.5. The valuation allowance
is attributed to tax loss carryforwards and tax credits outside the U.S.
We regularly repatriate a portion of current year earnings from select non U.S. subsidiaries. Generally, these non-U.S.
subsidiaries are in tax jurisdictions with effective tax rates that do not result in materially higher U.S. tax provisions related to
the repatriated earnings. No provision is made for additional taxes on undistributed earnings of foreign affiliates that are
intended and planned to be indefinitely invested in the affiliate. We intend to, and have plans to, reinvest these earnings
indefinitely in our foreign subsidiaries to fund local operations, fund pension and other post retirement obligations and fund
capital projects. At September 30, 2011, approximately $980 of foreign subsidiary retained earnings was considered
indefinitely invested in those businesses. 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.
Unrecognized tax benefits activity for the years ended September 30, 2011 and 2010 are summarized below:
Unrecognized tax benefits, beginning of year
Additions based on current year tax positions and acquisitions
Reductions for prior year tax positions
Settlements with taxing authorities/statute expirations
Unrecognized tax benefits, end of year
2011
$ 48.7
8.1
(0.7)
(14.9)
41.2
2010
$ 46.9
5.0
(1.4)
(1.8)
48.7
Included in the unrecognized tax benefits noted above are $35.5 of uncertain tax positions that would affect the Company’s
effective tax rate, if recognized. The Company does not expect any significant increases or decreases to their unrecognized tax
benefits within twelve months of this reporting date. In the Consolidated Balance Sheets, unrecognized tax benefits are
classified as Other liabilities (non-current) to the extent that payment is not anticipated within one year.
The Company classifies accrued interest and penalties related to unrecognized tax benefits in the income tax provision. The
Company accrued approximately $7.6 of interest and $2.8 of penalties at September 30, 2011 and $7.0 of interest and $0.7 of
penalties at September 30, 2010. Interest was computed on the difference between the tax position recognized in accordance
with GAAP and the amount previously taken or expected to be taken in the Company’s tax returns.
The Company files income tax returns in the U.S. federal jurisdiction, various cities and states, and more than 50 foreign
jurisdictions where the Company has operations. U.S. federal income tax returns for tax years ended September 30, 2005 and
after remain subject to examination by the Internal Revenue Service. With few exceptions, the Company is no longer subject to
state and local income tax examinations for years before September 30, 2003. The status of international income tax
examinations varies by jurisdiction. The Company does not anticipate any material adjustments to its financial statements
resulting from tax examinations currently in progress.
(8) Earnings Per Share
For each period presented below, basic earnings per share is based on the average number of shares outstanding during the
period. Diluted earnings per share is based on the average number of shares used for the basic earnings per share calculation,
adjusted for the dilutive effect of stock options and restricted stock equivalents.
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