NOTE 14 - INCOME TAXES
Income tax expense was calculated based upon the following components of income (loss) from operations before income taxes for the years ended September 30, 2016, 2015, and 2014:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | SBH | | SB/RH |
(in millions) | | 2016 | | 2015 | | 2014 | | 2016 | | 2015 | | 2014 |
United States | | $ | 197.8 |
| | $ | 3.4 |
| | $ | 80.7 |
| | $ | 203.5 |
| | $ | 9.8 |
| | $ | 83.3 |
|
Outside the United States | | 199.8 |
| | 189.9 |
| | 192.8 |
| | 199.8 |
| | 189.9 |
| | 192.8 |
|
Income (loss) from operations before income taxes | | $ | 397.6 |
| | $ | 193.3 |
| | $ | 273.5 |
| | $ | 403.3 |
| | $ | 199.7 |
| | $ | 276.1 |
|
The components of income tax expense for the years ended September 30, 2016, 2015 and 2014 are as follows:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | SBH | | SB/RH |
(in millions) | | 2016 | | 2015 | | 2014 | | 2016 | | 2015 | | 2014 |
Current tax expense: | | | | | | | | | | | | |
U.S. Federal | | $ | 1.6 |
| | $ | 3.6 |
| | $ | 6.2 |
| | $ | 1.6 |
| | $ | 3.6 |
| | $ | 6.2 |
|
Foreign | | 59.7 |
| | 40.4 |
| | 46.6 |
| | 59.7 |
| | 40.4 |
| | 46.6 |
|
State and local | | 4.2 |
| | 4.5 |
| | 4.3 |
| | 4.2 |
| | 4.5 |
| | 4.3 |
|
Total current tax expense | | 65.5 |
| | 48.5 |
| | 57.1 |
| | 65.5 |
| | 48.5 |
| | 57.1 |
|
Deferred tax (benefit) expense: | | | | | | | | | | | | |
U.S. Federal | | (27.2 | ) | | (12.3 | ) | | 19.7 |
| | (16.7 | ) | | (12.3 | ) | | 19.7 |
|
Foreign | | (1.1 | ) | | 11.2 |
| | (8.2 | ) | | (1.1 | ) | | 11.2 |
| | (8.2 | ) |
State and local | | 2.8 |
| | (3.5 | ) | | (9.6 | ) | | 3.3 |
| | (3.5 | ) | | (9.6 | ) |
Total deferred tax expense | | (25.5 | ) | | (4.6 | ) | | 1.9 |
| | (14.5 | ) | | (4.6 | ) | | 1.9 |
|
Income tax expense | | $ | 40.0 |
| | $ | 43.9 |
| | $ | 59.0 |
| | $ | 51.0 |
| | $ | 43.9 |
| | $ | 59.0 |
|
The following reconciles the total income tax expense, based on the U.S. Federal statutory income tax rate of 35%, with the Company’s recognized income tax expense:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | SBH | | SB/RH |
(in millions) | | 2016 | | 2015 | | 2014 | | 2016 | | 2015 | | 2014 |
U.S. Statutory federal income tax expense | | $ | 139.2 |
| | $ | 67.6 |
| | $ | 95.7 |
| | $ | 141.2 |
| | $ | 69.9 |
| | $ | 96.6 |
|
Permanent items | | 9.1 |
| | 5.2 |
| | 4.6 |
| | 9.1 |
| | 5.2 |
| | 4.6 |
|
Foreign statutory rate vs. U.S. statutory rate | | (38.9 | ) | | (33.8 | ) | | (28.7 | ) | | (38.9 | ) | | (33.8 | ) | | (28.7 | ) |
State income taxes, net of federal effect | | 4.6 |
| | 1.7 |
| | 5.4 |
| | 4.7 |
| | 1.7 |
| | 5.4 |
|
Residual tax on foreign earnings | | 19.7 |
| | 24.8 |
| | 90.9 |
| | 19.7 |
| | 24.8 |
| | 90.9 |
|
Investment in foreign subsidiary | | — |
| | (23.3 | ) | | — |
| | — |
| | (23.3 | ) | | — |
|
Purchase accounting benefit | | — |
| | (22.8 | ) | | — |
| | — |
| | (22.8 | ) | | — |
|
Benefit from adjustment to tax basis in assets | | (8.4 | ) | | — |
| | — |
| | (8.4 | ) | | — |
| | — |
|
Change in valuation allowance | | (91.3 | ) | | 2.6 |
| | (115.6 | ) | | (82.7 | ) | | 0.5 |
| | (116.5 | ) |
Unrecognized tax expense (benefit) | | 34.6 |
| | (1.2 | ) | | 0.5 |
| | 34.6 |
| | (1.2 | ) | | 0.5 |
|
Foreign tax law changes | | (3.7 | ) | | — |
| | (7.6 | ) | | (3.7 | ) | | — |
| | (7.6 | ) |
Share based compensation adjustments | | (2.8 | ) | | 2.3 |
| | 1.4 |
| | (2.8 | ) | | 2.3 |
| | 1.4 |
|
Impact of IRC Section 9100 relief | | (16.4 | ) | | — |
| | — |
| | (16.4 | ) | | — |
| | — |
|
Adjustment to prior year NOLs | | — |
| | 14.4 |
| | — |
| | — |
| | 14.4 |
| | — |
|
Return to provision adjustments and other, net | | (5.7 | ) | | 6.4 |
| | 12.4 |
| | (5.4 | ) | | 6.2 |
| | 12.4 |
|
Income tax expense | | $ | 40.0 |
| | $ | 43.9 |
| | $ | 59.0 |
| | $ | 51.0 |
| | $ | 43.9 |
| | $ | 59.0 |
|