Energizer 2012 Annual Report Download - page 75

ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share and percentage data)
The deferred tax assets and deferred tax liabilities recorded on the balance sheet at September 30 for the years indicated are as
follows and include current and noncurrent amounts:
2012 2011
Deferred tax liabilities:
Depreciation and property differences $ (101.1)$ (112.9)
Intangible assets (574.3)(566.7)
Other tax liabilities (6.4)(6.6)
Gross deferred tax liabilities (681.8)(686.2)
Deferred tax assets:
Accrued liabilities 105.7 108.1
Deferred and stock-related compensation 103.6 88.7
Tax loss carryforwards and tax credits 13.9 23.1
Intangible assets 17.3 22.1
Postretirement benefits other than pensions 11.6 15.5
Pension plans 155.3 142.1
Inventory differences 31.7 28.5
Other tax assets 6.6 6.1
Gross deferred tax assets 445.7 434.2
Valuation allowance (11.9)(12.6)
Net deferred tax liabilities $ (248.0)$ (264.6)
There were no material tax loss carryforwards that expired in fiscal 2012. Future expirations of tax loss carryforwards and tax
credits, if not utilized, are not material from 2013 through 2016. For years subsequent to 2016 or for tax loss carryforwards
and tax credits that have no expiration, the value at September 30, 2012 was $13.9. 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, amongst other things, fund local operations, fund pension and other post retirement
obligations and fund capital projects. At September 30, 2012, approximately $1,250 of foreign subsidiary retained earnings
was considered indefinitely invested in those businesses. We estimate that the U.S. federal income tax liability that could
potentially arise if indefinitely invested retained earnings of foreign subsidiaries were repatriated in full to the U.S. would be
significant. While it is not practical to calculate a specific potential U.S. tax exposure due to changing statutory rates in foreign
jurisdictions over time, as well as other factors, we estimate the range of potential U.S. tax may be in excess of $150, if all
undistributed earnings were repatriated. Applicable U.S. income and foreign withholding taxes would be provided on these
earnings in the periods in which they are no longer considered indefinitely reinvested.
Unrecognized tax benefits activity for the years ended September 30, 2012 and 2011 are summarized below:
2012 2011
Unrecognized tax benefits, beginning of year $ 41.2 $ 48.7
Additions based on current year tax positions and acquisitions 3.3 8.1
Reductions for prior year tax positions (0.8)(0.7)
Settlements with taxing authorities/statute expirations (2.7)(14.9)
Unrecognized tax benefits, end of year $ 41.0 $ 41.2
Included in the unrecognized tax benefits noted above are $35.5 of uncertain tax positions that would affect the Company’s
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