Sunbeam 2009 Annual Report Download - page 64

Notes to Consolidated Financial Statements
Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated)
this amount, approximately $1 billion were acquired through acquisitions, of which approximately $849 are not reflected in the consolidated
financial statements. Additionally, approximately $1.0 billion of these domestic NOLs are subject to varying limitations on their use under Section
382 of the Internal Revenue Code of 1986, as amended.
The Company has also accumulated or acquired through acquisitions approximately $108 of foreign NOLs. Of the total foreign NOLs, $0.1
will expire in 2010. Approximately $108 of the foreign NOLs will expire in years subsequent to 2010, and approximately $86 have an unlimited life.
The Company and/or its subsidiaries are subject to federal, state and foreign income tax audits. The Company believes that adequate
amounts have been reserved for any adjustments that may ultimately result from these examinations.
Generally, the Company intends to indefinitely reinvest undistributed earnings of certain of its foreign subsidiaries outside the United
States. As a result the Company has not provided for U.S. income taxes on undistributed foreign earnings of approximately $704 at December 31,
2009. The Company intends to permanently reinvest these earnings in the future growth of its foreign businesses. Determination of the amount of
unrecognized deferred U.S. income liability is not practicable because of the complexities associated with its hypothetical calculation. In 2009 and
2008, the Company recorded a deferred tax charge of $23.7 and $7.9, respectively, related to profits that were deemed not to be permanently
reinvested outside of the United States.
The following table sets forth the details and the activity related to unrecognized tax benefit of and for the years ended December 31, 2009
and 2008:
(In millions) 2009 2008
Unrecognized tax benefits, January 1, $ 73.0 $ 96.7
Increases (decreases):
Acquisitions — (22.6)
Tax positions taken during the current period 2.0 2.7
Tax positions taken during a prior period (19.1) (0.6)
Settlements with taxing authorities (2.4) (2.8)
Other (2.0) (0.4)
Unrecognized tax benefits, December 31, $ 51.5 $ 73.0
During 2009, the change in the unrecognized tax benefits primarily relates to the expiration of certain statutes of limitations, the
redetermination of required reserves and tax settlements made during the year. The decrease in unrecognized tax benefits related to expiring
statutes totaled $7.1. Also during 2009, the Company paid $2.4 to settle certain tax audits for foreign subsidiaries in their local jurisdictions. During
2008, the change in the unrecognized tax benefits primarily relates to the adjustment of acquired unrecognized tax benefits and the settlement of
the Company’s 2003 and 2004 domestic audits. The amount of gross unrecognized tax benefits recorded at the date of acquisition of K2 and Pure
Fishing were approximately $7.1 and $4.4, respectively. At December 31, 2009, the amount of gross unrecognized tax benefits that, if recognized,
would affect the reported tax rate is $51.5. The Company has no indemnification for any of the gross unrecognized tax benefit from the sellers of
acquired companies.
The Company conducts business globally and, as a result, the Company or its subsidiaries file income tax returns in the U.S. federal
jurisdiction, various state, local, and foreign jurisdictions. In the normal course of business, the Company or its subsidiaries are subject to
examination by tax authorities throughout the world, including such major jurisdictions as Canada, France, Germany, Hong Kong, Japan, Mexico,
Venezuela, the United Kingdom, and the United States. As of December 31, 2009, the Company remains subject to examination by federal tax
authorities for certain tax years and is currently under examination for the income tax filings in various state and foreign jurisdictions.
At December 31, 2009, the Company believes it has no material tax positions for which it is reasonably possible that the total amounts of
unrecognized tax benefits may significantly change within twelve months.
The Company classifies all interest expense and penalties on uncertain tax positions as income tax expense, which is consistent with the
classification in prior years. As of December 31, 2009, and 2008, the liability for tax-related interest expense was $2.8 and $8.6, respectively.
Additionally, the 2009 and 2008 provision for income taxes includes tax-related interest income (expense) of $1.0 and ($0.5), respectively.
13. Stockholders’ Equity and Share-Based Awards
The Company maintains the 2009 Stock Incentive Plan and the Amended and Restated 2003 Stock Incentive Plan, as amended, which
allows for grants of stock options, restricted stock and short-term cash awards. There were approximately 6.2 million share-based awards
collectively available for grant under these stock plans at December 31, 2009.
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