Sunbeam 2009 Annual Report Download - page 63

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The difference between the federal statutory income tax rate and the Company’s reported income tax rate as a percentage of
income (loss) from operations is reconciled as follows:
Years Ended December 31,
2009 2008 2007
Federal statutory tax rate 35.0% (35.0)% 35.0%
Increase (decrease) in rates resulting from:
State and local taxes, net 0.4 (24.3) (4.6)
Foreign rate differences (2.3) (26.0) (6.8)
Non-deductible compensation 3.3 12.3 6.6
Foreign earnings not permanently reinvested 10.7 43.2 18.0
Tax settlements and related adjustments (3.6) 1.0 7.0
Goodwill impairment — 102.7 —
Valuation allowance 1.4 7.7 —
Venezuela inflationary adjustment and tax exempt income (5.4) (4.1) —
Foreign dividends 7.7 — —
Other (1.0) 3.2 2.5
Reported income tax rate 46.2% 80.7% 57.7%
Foreign pre-tax income was approximately $218 million, $165 million, and $144 million for 2009, 2008, and 2007, respectively.
Deferred tax assets (liabilities) are comprised of the following:
As of December 31,
(In millions) 2009 2008
Intangibles $ (298.8) $ (296.8)
Goodwill (78.2) (68.5)
Financial reporting amount of a subsidiary in excess of tax basis (72.5) (72.5)
Foreign earnings not permanently reinvested (40.5) (16.8)
Property and equipment (5.9) (3.2)
Other (22.7) (26.6)
Gross deferred tax liabilities (518.6) (484.4)
Net operating loss 122.3 150.0
Accounts receivable allowances 13.8 14.4
Inventory valuation 40.4 44.2
Pension and postretirement 37.9 51.4
Stock-based compensation 16.9 14.7
Other compensation and benefits 13.6 14.8
Operating reserves 74.4 75.9
Other 83.7 61.5
Gross deferred tax assets 403.0 426.9
Valuation allowance (32.1) (28.0)
Net deferred tax liability $ (147.7) $ ( 85.5)
The Company continually reviews the adequacy of the valuation allowance. A valuation allowance is recorded if, based on the
weight of available evidence, it is more likely than not that a deferred tax asset will not be realized. This assessment is based on an
evaluation of the level of historical taxable income and projections for future taxable income. During 2009, the Company’s valuation
allowance was increased by $4.1 due to the inability to benefit from $3.4 of certain state and foreign losses.
At December 31, 2009, the Company had net operating losses (“NOLs”) of approximately $1.1 billion for domestic tax purposes. Of
Notes to Consolidated Financial Statements
Jarden Corporation Annual Report 2009
(Dollars in millions, except per share data and unless otherwise indicated)
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