Sunbeam 2003 Annual Report Download - page 54

Jarden Corporation
Notes to Consolidated Financial Statements (continued)
Approximately $2.7 million of state net operating loss carryforwards remain at December 31, 2003
before the valuation allowance. Their use is limited to future taxable income of the Company. The
carryforwards expire in 2021. The Company maintained a valuation allowance against a portion of the
net tax benefit associated with all carryforwards and temporary differences at December 31, 2003, as it is
more likely than not that these will not be fully utilized in the available carryforward period.
As a result of the losses arising from the sale of the TPD Assets, the Company recovered in January
2002 approximately $15.7 million of federal income taxes paid in 1999 and 2000 by utilizing the
carryback of a tax net operating loss generated in 2001. On March 9, 2002, The Job Creation and
Workers Assistance Act of 2002 was enacted which provides, in part, for the carryback of 2001 net
operating losses for five years instead of the previous two year period. As a result, the Company filed for
an additional refund of $22.8 million, of which $22.2 million was received in March 2002 and the
remainder was received in April 2002.
The difference between the federal statutory income tax rate and the Company’s effective income
tax rate as a percentage of income from continuing operations is reconciled as follows:
Year ended December 31,
2003 2002 2001
Federal statutory tax rate ............................................ 35.0% 35.0% (35.0)%
Increase (decrease) in rates resulting from:
State and local taxes, net ......................................... 3.8 3.3 (3.3)
Foreign ....................................................... (0.1) — 0.9
Valuation allowance ............................................ — (8.4) 4.3
Other ........................................................ 0.5 0.9 0.9
Effective income tax rate ............................................ 39.2% 30.8% (32.2)%
Total income tax payments made by the Company during the years ended December 31, 2003, 2002
and 2001 were $11.2 million, $9.3 million, and $1.0 million, respectively.
11. Retirement and Other Employee Benefit Plans
The Company has certain defined contribution retirement plans that qualify under section 401(k)
of the Internal Revenue Code. The Company’s contributions to these retirement plans were $2.3
million, $1.6 million and $1.5 million, respectively, in the years ended December 31, 2003, 2002, and
2001.
The Company also maintains a defined benefit pension plan for certain of its hourly employees and
provides certain postretirement medical and life insurance benefits for a portion of its employees.
Additionally, in connection with the Diamond Acquisition, the Company acquired both the plan assets
and the remaining benefit obligation on two additional deferred benefit pension plans which are both
frozen.
Our funding policy for our defined benefit pension plans is based on actuarial calculations and the
applicable requirements of federal law. Benefits under the Company’s pension plans are primarily
related to years of service. The Company also provides certain postretirement medical and life insurance
benefits for a portion of its employees. We use September 30 as the measurement date for all of our
defined pension plans and postretirement plans.
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