Sunbeam 2010 Annual Report Download - page 52

Notes to Consolidated Financial Statements
Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated)
At December 31, 2010, the Company had net operating losses (“NOLs”) of approximately $1 billion for domestic tax purposes.
Of this amount, approximately $1 billion were acquired through acquisitions, of which approximately $849 are not reflected in the
consolidated financial statements. Additionally, approximately $843 of these domestic NOLs are subject to varying limitations on
their use under Section 382 of the Internal Revenue Code of 1986, as amended.
The Company has also accumulated or acquired through acquisitions approximately $134 of foreign NOLs. Of the total foreign
NOLs, $0.3 will expire in 2011. Approximately $24 of the foreign NOLs will expire in years subsequent to 2011, and approximately
$109 have an unlimited life.
The Company and/or its subsidiaries are subject to federal, state and foreign income tax audits. The Company believes that
adequate amounts have been reserved for any adjustments that may ultimately result from these examinations.
Generally, the Company intends to indefinitely reinvest undistributed earnings of certain of its foreign subsidiaries outside the
United States. As a result the Company has not provided for U.S. income taxes on undistributed foreign earnings of approximately
$788 at December 31, 2010. The Company intends to permanently reinvest these earnings in the future growth of its foreign
businesses. Determination of the amount of unrecognized deferred U.S. income liability is not practicable because of the
complexities associated with its hypothetical calculation. In 2010, the Company recorded a deferred tax benefit of $2.4 related to
profits that were deemed not to be permanently reinvested outside of the United States. In 2009 and 2008, the Company recorded
a deferred tax charge $23.7 and $7.9, respectively, related to profits that were deemed not to be permanently reinvested outside of
the United States.
The following table sets forth the details and the activity related to unrecognized tax benefit as of and for the years ended
December 31, 2010 and 2009:
During 2010 and 2009, the change in the unrecognized tax benefits primarily relates to the expiration of certain statutes of
limitations, the redetermination of required reserves, and tax settlements made during the year. In 2010 and 2009, the decrease in
unrecognized tax benefits due to expiring statutes was $0.6 and $7.1, respectively. Also during 2010 and 2009, the Company paid
$1.9 and $2.4, respectively, to settle certain tax audits for foreign subsidiaries in their local jurisdictions. At December 31, 2010,
the amount of gross unrecognized tax benefits that, if recognized, would affect the reported tax rate is $54.3. The Company has
indemnification for $1.4 of the gross unrecognized tax benefit from the sellers of acquired companies.
The Company conducts business globally and, as a result, the Company or its subsidiaries file income tax returns in the U.S. federal
jurisdiction, various state, local, and foreign jurisdictions. In the normal course of business, the Company or its subsidiaries are
subject to examination by tax authorities throughout the world, including such major jurisdictions as Canada, France, Germany,
Hong Kong, Japan, Mexico, Venezuela, the United Kingdom and the United States. As of December 31, 2010, the Company remains
subject to examination by federal tax authorities for certain tax years and is currently under examination for the income tax filings in
various state and foreign jurisdictions. At December 31, 2010, the Company believes it has no material tax positions for which it is
reasonably possible that the total amount of unrecognized tax benefits may significantly change within twelve months.
The Company classifies all interest expense and penalties on uncertain tax positions as income tax expense, which is consistent
with the classification in prior years. As of December 31, 2010 and 2009, the liability for tax-related interest expense was $4.1 and
$2.8, respectively. Additionally, the 2010 and 2009 provision for income taxes includes tax-related interest expense of $1.1 and
1.0, respectively.
13. Stockholders’ Equity and Share-Based Awards
The Company maintains the 2009 Stock Incentive Plan and the Amended and Restated 2003 Stock Incentive Plan, as amended,
which allows for grants of stock options, restricted stock and short-term cash awards. There were approximately 3.7 million share-
based awards collectively available for grant under these stock plans at December 31, 2010.
(In millions) 2010 2009
Unrecognized tax benefits, January 1, $ 51.5 $ 73.0
Increases (decreases):
Acquisitions 1.8 —
Tax positions taken during the current period 3.3 2.0
Tax positions taken during a prior period (1.3) (19.1)
Settlements with taxing authorities (1.9) (2.4)
Other 2.3 (2.0)
Unrecognized tax benefits, December 31, $ 55.7 $ 51.5
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