Rayovac 2004 Annual Report Download - page 87

RAYOVAC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
The following reconciles the Federal statutory income tax rate with the Company’s effective tax rate:
2004 2003 2002
Statutory federal income tax rate ......................................... 35.0% 35.0% 35.0%
Foreign Sales Corporation/Extraterritorial Income Exclusion benefit ............ (0.2) (1.5) (0.6)
Non U.S. permanent items .............................................. 1.7 7.0 (0.5)
Foreign statutory rate vs. U.S. statutory rate ................................ (0.9) 6.6 0.4
State income taxes and other ............................................ (3.3) (6.0) 1.5
R&D credit, current and prior years ....................................... (0.6) (7.2) —
Nondeductible interest expense .......................................... 1.2 5.7 —
Adjustment of prior year taxes ........................................... 3.0 (7.5) (0.5)
Valuation allowance ................................................... 2.0 — —
Other ............................................................... 0.1 0.7 0.7
38.0% 32.8% 36.0%
The tax effects of temporary differences, which give rise to significant portions of the deferred tax assets
and deferred tax liabilities, are as follows:
September 30,
2004 2003
Current deferred tax assets:
Employee benefits ............................................... $ 3,331 $ 6,895
Restructuring and related asset impairments ........................... 2,010 911
Inventories and receivables ......................................... 7,300 7,917
Marketing and promotional accruals ................................. 1,208 185
Net operating loss carry forwards .................................... 8,337 4,432
Other .......................................................... 252 6,873
Valuation allowance .............................................. (178) (201)
Total current deferred tax assets ......................................... 22,260 27,012
Current deferred tax liabilities:
Property, plant and equipment held for sale ............................ (2,650) (3,896)
Inventory ....................................................... (347) (4,597)
Other .......................................................... (30) (18)
Total current deferred tax liabilities ...................................... (3,027) (8,511)
Net current deferred tax assets .......................................... $19,233 $ 18,501
Noncurrent deferred tax assets:
Employee benefits ............................................... $ 9,943 $ 9,724
Net operating loss and credit carry forwards ........................... 66,803 13,233
Property, plant and equipment ...................................... — 2,170
Marketing and promotional accruals ................................. 1,660 —
Other .......................................................... 4,550 9,752
Valuation allowance .............................................. (11,304) (3,843)
Total noncurrent deferred tax assets ...................................... 71,652 31,036
Noncurrent deferred tax liabilities:
Property, plant, and equipment ...................................... (13,763) (9,458)
Currency hedges ................................................. (9,111) —
Intangibles ...................................................... (55,423) (11,123)
Other .......................................................... (627) (2,113)
Total noncurrent deferred tax liabilities ................................... (78,924) (22,694)
Net noncurrent deferred tax (liabilities) assets .............................. $ (7,272) $ 8,342
Net current and noncurrent deferred tax assets .............................. $11,961 $ 26,843
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