Energizer 2015 Annual Report Download - page 65

ENERGIZER HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
61
The deferred tax assets and deferred tax liabilities recorded on the balance sheets at September 30 for the years indicated are as
follows, both current and noncurrent:
2015 2014
Deferred tax assets:
Accrued liabilities $ 53.5 $ 35.1
Deferred and stock-related compensation 29.6 27.6
Tax loss carryforwards and tax credits 14.4 19.6
Intangible assets 46.5 46.4
Pension plans 36.2 —
Other tax assets 3.9 10.5
Gross deferred tax assets 184.1 139.2
Deferred tax liabilities:
Depreciation and property differences (16.2)(8.1)
Other tax liabilities —(1.7)
Gross deferred tax liabilities (16.2)(9.8)
Valuation allowance (13.6)(14.5)
Net deferred tax assets $ 154.3 $ 114.9
There were no material tax loss carryforwards that expired in fiscal 2015. Future expirations of tax loss carryforwards and tax
credits, if not utilized, are $10.3 between 2018 and 2020 at September 30, 2015. In addition, there are $4.1 of tax loss
carryforwards with no expiration at September 30, 2015. The valuation allowance is attributed to tax loss carryforwards and tax
credits outside the U.S.
The Company has repatriated 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 has been made for additional taxes on undistributed earnings of foreign affiliates that the
Company intended and planned to be indefinitely invested in the affiliate. At September 30, 2015, approximately $650 of
foreign subsidiary earnings related to Energizer was considered indefinitely invested in those businesses. We estimate that the
U.S. federal income tax liability that could potentially arise if indefinitely invested earnings of foreign subsidiaries were
repatriated in full to the U.S. would be significant. While it is not practicable 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 $88, if all undistributed earnings were repatriated assuming foreign cash was available to do so.
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 twelve months ended September 30, 2015 and 2014 are summarized below:
2015 2014
Unrecognized tax benefits, beginning of year $ 12.7 $ 13.5
Additions based on current year tax positions and acquisitions 6.1 1.9
Reductions for prior year tax positions (10.3)(0.1)
Settlements with taxing authorities/statute expirations —(2.6)
Unrecognized tax benefits, end of year $ 8.5 $ 12.7
Included in the unrecognized tax benefits noted above are $8.5 of uncertain tax positions that would affect Energizer’s
effective tax rate, if recognized. Energizer 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 payments are not anticipated within one year. The fiscal 2015