Rayovac 2012 Annual Report Download - page 62

Our total valuation allowance for the tax benefit of deferred tax assets that may not be realized is
approximately $385 million at September 30, 2012. Of this amount, approximately $350 million relates to U.S.
net deferred tax assets and approximately $35 million relates to foreign net deferred tax assets. Our total
valuation allowance was approximately $374 million at September 30, 2011. Of this amount, approximately $339
million related to U.S. net deferred tax assets and approximately $35 million related to foreign net deferred tax
assets. As a result of the purchase of FURminator, we were able to release $15 million of U.S. valuation
allowance during Fiscal 2012. The release was attributable to $15 million of net deferred tax liabilities recorded
on the FURminator opening balance sheet that offset other U.S. net deferred tax assets. During Fiscal 2011, we
also determined that a valuation allowance is required against deferred tax assets related to net operating losses in
Brazil and thus recorded a $26 million charge.
ASC 740, which clarifies the accounting for uncertainty in tax positions, requires that we recognize in our
financial statements the impact of a tax position if that position is more likely than not to be sustained on audit
based on the technical merits of the position. As of September 30, 2012 and September 30, 2011, the total
amount of unrecognized tax benefits that, if recognized, would affect the effective income tax rate in future
periods was $6 million and $9 million, respectively. See Note 9, “Income Taxes”, of Notes to Consolidated
Financial Statements included in this Annual Report on Form 10-K for additional information.
Fiscal Year Ended September 30, 2011 Compared to Fiscal Year Ended September 30, 2010
Highlights of Consolidated Operating Results
Year over year historical comparisons are influenced by the acquisition of Russell Hobbs, which is included
in our Fiscal 2010 Consolidated Statements of Operations from June 16, 2010, the date of the Merger, through
the end of the period. See Note 15, Acquisitions, of Notes to Consolidated Financial Statements, included in this
Annual Report on Form 10-K for supplemental pro forma information providing additional year over year
comparisons of the impact of the acquisition.
Net Sales. Net sales for Fiscal 2011 increased to $3,187 million from $2,567 million in Fiscal 2010, a 24.2%
increase. The following table details the principal components of the change in net sales from Fiscal 2010 to
Fiscal 2011 (in millions):
Net Sales
Fiscal 2010 Net Sales ................................................ $2,567
Addition of Russell Hobbs—small appliances ......................... 548
Addition of Russell Hobbs—pet supplies ............................. 7
Addition of Russell Hobbs—home and garden control products ........... 4
Increase in electric personal care products ............................ 28
Increase in electric shaving and grooming products .................... 13
Increase in home and garden control products ......................... 7
Decrease in pet supplies .......................................... (3)
Decrease in consumer batteries .................................... (12)
Foreign currency impact, net ...................................... 28
Fiscal 2011 Net Sales ................................................ $3,187
Consolidated net sales by product line for Fiscal 2011 and Fiscal 2010 are as follows (in millions):
Fiscal Year
2011 2010
Product line net sales
Consumer batteries .................................................. $ 954 $ 954
Small appliances .................................................... 778 231
Pet supplies ........................................................ 579 566
Home and garden control products ...................................... 354 343
Electric shaving and grooming products .................................. 274 257
Electric personal care products ......................................... 248 216
Total net sales to external customers .................................... $3,187 $2,567
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