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Jarden Corporation Annual Report 2013 57
Deferred tax assets (liabilities) at December31, 2013 and 2012 are comprised of the following:
(In millions) 2013 2012
Intangibles $(826.9)$(389.4)
Goodwill (135.8)(121.1)
Financial reporting amount of a subsidiary in excess of tax basis (70.4)(70.8)
Foreign earnings not permanently reinvested (48.4)(47.3)
Property and equipment (8.8)(6.2)
Other (0.4)(6.5)
Gross deferred tax liabilities (1,090.7)(641.3)
Net operating loss 47.8 40.1
Accounts receivable allowances 15.0 12.0
Inventory valuation 58.8 53.8
Pension and postretirement 20.0 35.6
Stock-based compensation 23.6 21.6
Other compensation and benets 13.0 19.0
Operating reserves 66.3 59.2
Other 13.8 49.1
Gross deferred tax assets 258.3 290.4
Valuation allowance (34.2)(28.1)
Net deferred tax liability $(866.6)$(379.0)
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 2013, the Company’s valuation allowance
increased by $6.1 principally due to the inability to recognize certain foreign losses for which a valuation allowance was previously
provided. During 2012, the Company’s valuation allowance increased by $1.2 principally due to the Company’s inability to recognize the
benet of certain current year foreign losses. During 2011, the Company’s valuation allowance decreased by $8.4 principally due to the
ability to recognize certain foreign losses for which a valuation allowance was previously established.
The net operating losses (“NOLs”) reected on the deferred tax asset table consist of state and foreign net operating loss
carryforwards. At December31, 2013, the Company had net U.S. federal NOLs of approximately $717, none of which are reected in the
consolidated nancial statements. In 2013, the Company utilized approximately $91 of these previously unrecognized U.S. federal NOLs
in its consolidated nancial statements. Additionally, approximately $560 of these U.S. federal NOLs are subject to varying limitations
on their use under Section382 of the Internal Revenue Code of 1986, as amended. Included in the total NOLs reported on the nancial
statement are $140 of foreign NOLs which the Company has accumulated or acquired through acquisitions. Of the total foreign NOLs,
approximately $1 will expire in 2014. Approximately $45 of the foreign NOLs will expire in years subsequent to 2014, and approximately
$94 have an unlimited life.
Certain vested and exercised employee equity compensation awards have resulted in tax deductions in excess of previously recorded
tax benets based on the value of such equity compensation awards at the time of grant (“windfalls”). The additional tax benet
associated with the windfalls is not recognized for nancial statement purposes until the deduction reduces taxes payable as recorded
on the Company’s nancial statements with an offset to additional paid-in-capital. Windfall tax benets of $11.6 and $41.8 were
recognized in 2013 and 2012, respectively. All previously unrecognized windfall tax benets were recognized in 2012.
Generally, the Company intends to indenitely reinvest undistributed earnings of certain of its foreign subsidiaries outside the U.S. in
the future growth of its foreign businesses. As a result, the Company has not provided for U.S. income taxes on undistributed foreign
earnings of approximately $1.2 billion at December31, 2013. Determination of the amount of unrecognized deferred U.S. income liability
is not practicable, in part, because of the complexities associated with its hypothetical calculation, which include the impact of complex
foreign and domestic tax laws with respect to dividend remittances, remittance requirements imposed by certain of the Company’s
debt agreements and the impact of foreign laws restricting such remittances. In 2013, 2012 and 2011, the Company recorded a deferred
tax charge (benet) of $1.4, $2.2 and $7.5, respectively, related to prots that were deemed not to be permanently reinvested outside
of the United States.
Notes to Consolidated Financial Statements
Jarden Corporation Annual Report 2013 (Dollars in millions, except per share data and unless otherwise indicated)