Black & Decker 2011 Annual Report Download - page 101

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A valuation allowance is recorded on certain deferred tax assets if it has been determined it is more likely than not that all or a portion
of these assets will not be realized. We have recorded a valuation allowance of $308.7 million and $265.8 million for deferred tax
assets existing as of December 31, 2011 and January 1, 2011, respectively. The valuation allowance is primarily attributable to foreign
and state net operating loss carry forwards and a U.S. federal capital loss carry forward.
The classification of deferred taxes as of December 31, 2011 and January 1, 2011 is as follows:
2011
2010
Deferred
Tax Asset
Deferred
Tax Liability
Deferred
Tax Asset
Deferred
Tax Liability
Current……………………………………………………….
$ (111.9) $ 58.7
$ (112.8) $ 40.1
Non
-current………………………………………………….
(90.3) 905.0
(128.7) 898.4
Total…………………………………………………………
$ (202.2) $ 963.7
$ (241.5) $ 938.5
Income tax expense (benefit) attributable to continuing operations consisted of the following:
(Millions of Dollars)
2011
2010
2009
Current:
Federal…………………………………………………………………...
$ (128.8) $ (74.7) $ (1.0)
Foreign…………………………………………………………………... 215.5
105.8
21.6
State……………………………………………………………………...
9.5
4.7
7.1
Total current……………………………………………………………..
$ 96.2
$ 35.8
$ 27.7
Deferred:
Federal…………………………………………………………………...
$ 33.6
$ 37.5
$ 34.4
Foreign…………………………………………………………………... (34.7) (31.8) (5.0)
State……………………………………………………………………...
(6.5) (3.8) (2.1)
Total deferred……………………………………………………………
(7.6) 1.9
27.3
Income taxes on continuing operations……………………………………..
$ 88.6
$ 37.7
$ 55.0
Net income taxes paid during 2011, 2010 and 2009 were $118.5 million, $97.7 million and $58.6 million, respectively. The 2011
amount includes refunds of $74.6 million relating to prior year overpayments and prepaid taxes. The 2010 amount includes
U.S. Federal refunds of $77.4 million relating to an NOL carry back, an audit settlement and a prior year overpayment. During 2011,
2010, and 2009, the Company had tax holidays in the Czech Republic and China. Tax holidays resulted in a reduction of tax expense
amounting to $3.5 million, $2.9 million, and $2.0 million. The tax holiday in the Czech Republic expired during 2011 while a portion
of the tax holiday in China expires in 2015.
The reconciliation of the U.S. federal statutory income tax to the income taxes on continuing operations is as follows:
(Millions of Dollars)
2011
2010
2009
Tax at statutory rate………………………………………………..………
$ 273.3
$ 83.0
$ 99.2
State income taxes, net of federal benefits………………………..……….
(2.1
)
1.4
4.7
Difference between foreign and federal income tax………………..……..
(94.7
)
(73.0)
(27.5)
Tax accrual reserve……………………………………………..………….
19.4
7.3
(8.3)
Audit settlements…………………………………………………..……….
(73.4
)
(36.0)
(8.8)
NOL
& Valuation Allowance related items………………………...………
(1.8
)
12.4
—
Foreign dividends and related items…………………………………..……
(11.3
)
7.8
—
Non
-deductible merger related costs……………………………………….
6.5
50.1
4.9
Change in deferred tax liabilities on undistributed foreign earnings……....
(26.2
)
(10.6)
—
Statutory income tax rate change…………………………………………...
(5.4
)
1.5
(0.1)
Other-net……………………………………………………………………
4.3
(6.2)
(9.1)
Income taxes on continuing operations…………………………………….
$ 88.6
$ 37.7
$ 55.0