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Jarden Corporation
Notes to Consolidated Financial Statements (cont’d)
December 31, 2005
these complaints. No class has been certified in the actions. The complaints seek compensatory damages
plus interest and attorneys’ fees.
In February of 2006, a derivative complaint was filed against certain Company officers and the Board
of Directors of the Company in the United States District Court for the Southern District of New York.
The Company is named as a nominal defendant. The complaint alleges, among other things, that the
individual defendants violated their fiduciary duties by failing to disclose material information and/or by
misleading the investing public about the Company’s business and financial condition relating to the THG
Acquisition. The complaint seeks damages and other monetary relief against the individual defendants.
These actions are in the early stages of litigation and an outcome cannot be predicted. Management
does not believe that the outcome of this litigation will have a material adverse effect on the financial
position and results of operations of the Company. The Company intends to defend itself vigorously in
these actions.
8. Income Taxes
The components of the provision for income taxes attributable to continuing operations were as
follows:
Years Ended December 31,
(millions of dollars) 2005 2004 2003
Current income tax expense:
U.S. federal .......................................... $10.0 $14.4 $ 9.8
Foreign ............................................. 22.6 1.9 0.7
State and local ........................................ 1.9 2.1 2.5
Total ........................................... 34.5 18.4 13.0
Deferred income tax expense (benefit):
U.S. federal .......................................... (1.2) 6.5 6.5
State, local and other .................................. (0.2) 0.1 0.6
Foreign ............................................. 1.9 1.0 0.4
Total ........................................... 0.5 7.6 7.5
Total income tax provision ......................... $35.0 $26.0 $20.5
The difference between the federal statutory income tax rate and the Company’s effective income tax
rate as a percentage of income from operations is reconciled as follows:
Years Ended December 31,
2005 2004 2003
Federal statutory tax rate .................................. 35.0% 35.0% 35.0%
Increase (decrease) in rates resulting from:
State and local taxes, net ............................... 4.0 3.0 3.8
Foreign ............................................. (4.6) 0.3 (0.1)
Other ............................................... 2.1 (0.3) 0.5
Effective income tax rate .................................. 36.5% 38.0% 39.2%
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