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These excerpts taken from the HBI 10-K filed Feb 19, 2008. Income
Taxes
Prior to spin off on September 5, 2006, all income taxes
were computed and reported on a separate return basis as if we
were not part of Sara Lee. Deferred taxes were recognized for
the future tax effects of temporary differences between
financial and income tax reporting using tax rates in effect for
the years in which the differences are expected to reverse. Net
operating loss carryforwards had been determined in our
Consolidated Financial Statements as if we were separate from
Sara Lee, resulting in a different net operating loss
carryforward amount than reflected by Sara Lee. Given our
continuing losses in certain geographic locations on a separate
return basis, a valuation allowance has been established for the
deferred tax assets relating to these specific locations.
Federal income taxes are provided on that portion of our income
of foreign subsidiaries that is expected to be remitted to the
United States and be taxable, reflecting the historical
decisions made by Sara Lee with regards to earnings permanently
reinvested in foreign jurisdictions. In periods after the spin
off, we may make different decisions as to the amount of
earnings permanently reinvested in foreign jurisdictions, due to
anticipated cash flow or other business requirements, which may
impact our federal income tax provision and effective tax rate.
We periodically estimate the probable tax obligations using
historical experience in tax jurisdictions and our informed
judgment. There are inherent uncertainties related to the
interpretation of tax regulations in the jurisdictions in which
we transact business. The judgments and estimates made at a
point in time may change based on the outcome of tax audits, as
well as changes to, or further interpretations of, regulations.
Income tax expense is adjusted in the period in which these
events occur, and these adjustments are included in our
Consolidated Statements of Income. If such changes take place,
there is a risk that our effective tax rate may increase or
decrease in any period. In July 2006, the Financial Accounting
Standards Board (“FASB”) issued Interpretation 48,
Accounting for Uncertainty in Income Taxes
(“FIN 48”), which became effective during the
year ended December 29, 2007. FIN 48 addresses the
determination of how tax benefits claimed or expected to be
claimed on a tax return should be recorded in the financial
statements. Under FIN 48, a company must
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recognize the tax benefit from an uncertain tax position only if
it is more likely than not that the tax position will be
sustained on examination by the taxing authorities, based on the
technical merits of the position. The tax benefits recognized in
the financial statements from such a position are measured based
on the largest benefit that has a greater than fifty percent
likelihood of being realized upon ultimate resolution.
In conjunction with the spin off, we and Sara Lee entered into a
tax sharing agreement, which allocates responsibilities between
us and Sara Lee for taxes and certain other tax matters. Under
the tax sharing agreement, Sara Lee generally is liable for all
U.S. federal, state, local and foreign income taxes
attributable to us with respect to taxable periods ending on or
before September 5, 2006. Sara Lee also is liable for
income taxes attributable to us with respect to taxable periods
beginning before September 5, 2006 and ending after
September 5, 2006, but only to the extent those taxes are
allocable to the portion of the taxable period ending on
September 5, 2006. We are generally liable for all other
taxes attributable to us. Changes in the amounts payable or
receivable by us under the stipulations of this agreement may
impact our tax provision in any period.
Within 180 days after Sara Lee files its final consolidated
tax return for the period that includes September 5, 2006,
Sara Lee is required to deliver to us a computation of the
amount of deferred taxes attributable to our United States and
Canadian operations that would be included on our balance sheet
as of September 6, 2006. If substituting the amount of
deferred taxes as finally determined for the amount of estimated
deferred taxes that were included on that balance sheet at the
time of the spin off causes a decrease in the net book value
reflected on that balance sheet, then Sara Lee will be required
to pay us the amount of such decrease. If such substitution
causes an increase in the net book value reflected on that
balance sheet, then we will be required to pay Sara Lee the
amount of such increase. For purposes of this computation, our
deferred taxes are the amount of deferred tax benefits
(including deferred tax consequences attributable to deductible
temporary differences and carryforwards) that would be
recognized as assets on our balance sheet computed in accordance
with GAAP, but without regard to valuation allowances, less the
amount of deferred tax liabilities (including deferred tax
consequences attributable to deductible temporary differences)
that would be recognized as liabilities on our balance sheet
computed in accordance with GAAP, but without regard to
valuation allowances. Neither we nor Sara Lee will be required
to make any other payments to the other with respect to deferred
taxes.
Income Taxes Prior to spin off on September 5, 2006, all income taxes were computed and reported on a separate return basis as if we were not part of Sara Lee. Deferred taxes were recognized for the future tax effects of temporary differences between financial and income tax reporting using tax rates in effect for the years in which the differences are expected to reverse. Net operating loss carryforwards had been determined in our Consolidated Financial Statements as if we were separate from Sara Lee, resulting in a different net operating loss carryforward amount than reflected by Sara Lee. Given our continuing losses in certain geographic locations on a separate return basis, a valuation allowance has been established for the deferred tax assets relating to these specific locations. Federal income taxes are provided on that portion of our income of foreign subsidiaries that is expected to be remitted to the United States and be taxable, reflecting the historical decisions made by Sara Lee with regards to earnings permanently reinvested in foreign jurisdictions. In periods after the spin off, we may make different decisions as to the amount of earnings permanently reinvested in foreign jurisdictions, due to anticipated cash flow or other business requirements, which may impact our federal income tax provision and effective tax rate. We periodically estimate the probable tax obligations using historical experience in tax jurisdictions and our informed judgment. There are inherent uncertainties related to the interpretation of tax regulations in the jurisdictions in which we transact business. The judgments and estimates made at a point in time may change based on the outcome of tax audits, as well as changes to, or further interpretations of, regulations. Income tax expense is adjusted in the period in which these events occur, and these adjustments are included in our Consolidated Statements of Income. If such changes take place, there is a risk that our effective tax rate may increase or decrease in any period. In July 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation 48, Accounting for Uncertainty in Income Taxes (“FIN 48”), which became effective during the year ended December 29, 2007. FIN 48 addresses the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN 48, a company must
Table of Contentsrecognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. In conjunction with the spin off, we and Sara Lee entered into a tax sharing agreement, which allocates responsibilities between us and Sara Lee for taxes and certain other tax matters. Under the tax sharing agreement, Sara Lee generally is liable for all U.S. federal, state, local and foreign income taxes attributable to us with respect to taxable periods ending on or before September 5, 2006. Sara Lee also is liable for income taxes attributable to us with respect to taxable periods beginning before September 5, 2006 and ending after September 5, 2006, but only to the extent those taxes are allocable to the portion of the taxable period ending on September 5, 2006. We are generally liable for all other taxes attributable to us. Changes in the amounts payable or receivable by us under the stipulations of this agreement may impact our tax provision in any period. Within 180 days after Sara Lee files its final consolidated tax return for the period that includes September 5, 2006, Sara Lee is required to deliver to us a computation of the amount of deferred taxes attributable to our United States and Canadian operations that would be included on our balance sheet as of September 6, 2006. If substituting the amount of deferred taxes as finally determined for the amount of estimated deferred taxes that were included on that balance sheet at the time of the spin off causes a decrease in the net book value reflected on that balance sheet, then Sara Lee will be required to pay us the amount of such decrease. If such substitution causes an increase in the net book value reflected on that balance sheet, then we will be required to pay Sara Lee the amount of such increase. For purposes of this computation, our deferred taxes are the amount of deferred tax benefits (including deferred tax consequences attributable to deductible temporary differences and carryforwards) that would be recognized as assets on our balance sheet computed in accordance with GAAP, but without regard to valuation allowances, less the amount of deferred tax liabilities (including deferred tax consequences attributable to deductible temporary differences) that would be recognized as liabilities on our balance sheet computed in accordance with GAAP, but without regard to valuation allowances. Neither we nor Sara Lee will be required to make any other payments to the other with respect to deferred taxes. This excerpt taken from the HBI 10-Q filed Nov 5, 2007. Income
Taxes
In July 2006, the Financial Accounting Standards Board
(“FASB”) issued Interpretation 48, Accounting for
Uncertainty in Income Taxes (“FIN 48”), which
became effective during the first quarter ended March 31,
2007. FIN 48 addresses the determination of how tax
benefits claimed or expected to be claimed on a tax return
should be recorded in the financial statements. Under
FIN 48, a company must recognize the tax benefit from an
uncertain tax position only if it is more likely than not that
the tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the position. The
tax benefits
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recognized in the financial statements from such a position are
measured based on the largest benefit that has a greater than
fifty percent likelihood of being realized upon ultimate
resolution. The impact of the reassessment of our tax positions
in accordance with FIN 48 did not have a material impact on
our results of operations, financial condition or liquidity.
For additional information regarding the adoption of
FIN 48, see Note 5, Income Taxes. For further
discussion of our critical accounting estimates related to
income taxes, see our Report on
Form 10-KT
for the six months ended December 30, 2006.
This excerpt taken from the HBI 10-Q filed Aug 3, 2007. Income
Taxes
In July 2006, the Financial Accounting Standards Board
(“FASB”) issued Interpretation 48, Accounting for
Uncertainty in Income Taxes (“FIN 48”), which
became effective during the first quarter ended March 31,
2007. FIN 48 addresses the determination of how tax
benefits claimed or expected to be claimed on a tax return
should be recorded in the financial statements. Under
FIN 48, a company must recognize the tax benefit from an
uncertain tax position only if it is more likely than not that
the tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the position. The
tax benefits recognized in the financial statements from such a
position are measured based on the largest benefit that has a
greater than fifty percent likelihood of being realized upon
ultimate resolution. The impact of the reassessment of our tax
positions in accordance with FIN 48 did not have an impact
on our results of operations, financial condition or liquidity.
For additional information regarding the adoption of
FIN 48, see Note 5, Income Taxes. For further
discussion of our critical accounting estimates related to
income taxes, see our Report on
Form 10-KT
for the six months ended December 30, 2006.
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This excerpt taken from the HBI 10-Q filed May 14, 2007. Income
Taxes
In July 2006, the FASB issued Interpretation 48, Accounting
for Uncertainty in Income Taxes (“FIN 48”),
which became effective during the first quarter ended
March 31, 2007. FIN 48 addresses the determination of
how tax benefits claimed or expected to be claimed on a tax
return should be recorded in the financial statements. Under
FIN 48, a company must recognize the tax benefit from an
uncertain tax position only if it is more likely than not that
the tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the position. The
tax benefits recognized in the financial statements from such a
position are measured based on the largest benefit that has a
greater than fifty percent likelihood of being realized upon
ultimate resolution. The impact of the reassessment of our tax
positions in accordance with FIN 48 did not have an impact
on our results of operations, financial condition or liquidity.
For additional information regarding the adoption of
FIN 48, see Note 5, Income Taxes. For further
discussion of our critical accounting estimates related to
income taxes, see our Report on
Form 10-KT
for the six months ended December 30, 2006.
This excerpt taken from the HBI 8-K filed Nov 29, 2006. Income
Taxes
Historically, all income taxes have been computed and reported
on a separate return basis as if we were not part of Sara Lee.
Deferred taxes were recognized for the future tax effects of
temporary differences between financial and income tax reporting
using tax rates in effect for the years in which the differences
are expected to reverse. Net operating loss carry forwards had
been determined in our Combined and Consolidated Financial
Statements as if we were separate from Sara Lee, resulting in a
different net operating loss carry forward amount than reflected
by Sara Lee. Given our continuing losses in certain geographic
locations on a separate return basis, a valuation reserve has
been established for the value of the deferred tax assets
relating to these specific locations. Federal income taxes are
provided on that portion of our income of foreign subsidiaries
that is expected to be remitted to the United States and be
taxable, reflecting the historical decisions made by Sara Lee
with regards to earnings permanently reinvested in foreign
jurisdictions. In periods after the spin off, we may make
different decisions as to the amount of earnings permanently
reinvested in foreign jurisdictions, due to anticipated cash
flow or other business requirements, which may result in a
different federal income tax provision.
Sara Lee’s management periodically estimates the probable
tax obligations of Sara Lee using historical experience in tax
jurisdictions and its informed judgment. These estimates have
been included in our Combined and Consolidated Statements of
Income to the extent applicable to us on a stand-alone basis.
There are inherent uncertainties related to the interpretation
of tax regulations in the jurisdictions in which we transact
business. The judgments and estimates made at a point in time
may change based on the outcome of tax audits, as well as
changes to, or further interpretations of, regulations. Sara Lee
has historically adjusted its income tax expense in the period
in which these events occur, and these adjustments are included
in our Combined and Consolidated Statements of Income. If such
changes take place, there is a risk that our effective tax rate
may increase or decrease in any period.
In conjunction with the spin off, we and Sara Lee entered into a
Tax Sharing Agreement. This agreement allocates responsibilities
between us and Sara Lee for taxes and certain other tax matters.
Under the Tax Sharing Agreement, Sara Lee generally is liable
for all U.S. federal, state, local and foreign income taxes
attributable to us with respect to taxable periods ending on or
before September 5, 2006. Sara Lee also is liable for
income taxes attributable to us with respect to taxable periods
beginning before September 5, 2006 and ending after
September 5, 2006, but only to the extent those taxes are
allocable to the portion of the taxable period ending on
September 5, 2006. We are generally liable for all other
taxes attributable to us. Changes in the amounts payable or
receivable by us under the stipulations of this agreement may
impact our tax provision in any period.
This excerpt taken from the HBI 10-Q filed Nov 13, 2006. Income
Taxes
Prior to the spin off on September 5, 2006, all income
taxes were computed and reported on a separate return basis as
if we were not part of Sara Lee. Deferred taxes were recognized
for the future tax effects of temporary differences between
financial and income tax reporting using tax rates in effect for
the years in which the differences are expected to reverse. Net
operating loss carry forwards had been determined in our
financial statements as if we were separate from Sara Lee,
resulting in a different net operating loss carry forward amount
than reflected by Sara Lee. Given our continuing losses in
certain geographic locations on a separate return basis, a
valuation reserve had been established for the value of the
deferred tax assets relating to these specific locations.
Federal income taxes are provided on that portion of our income
of foreign subsidiaries that is expected to be remitted to the
United States and be taxable, reflecting the historical
decisions made by Sara Lee with regards to earnings permanently
reinvested in foreign jurisdictions. In periods after the spin
off, we may make different decisions as to the amount of
earnings permanently reinvested in foreign jurisdictions, due to
anticipated cash flow or other business requirements, which may
result in a different federal income tax provision.
In conjunction with the spin off, we and Sara Lee entered into a
Tax Sharing Agreement. This agreement allocates responsibilities
between us and Sara Lee for taxes and certain other tax matters.
Under the Tax Sharing Agreement, Sara Lee generally is liable
for all U.S. federal, state, local and foreign income taxes
attributable to us with respect to taxable periods ending on or
before September 5, 2006. Sara Lee also is liable for
income taxes attributable to us with respect to taxable periods
beginning before September 5, 2006 and ending after
September 5, 2006, but only to the extent those taxes are
allocable to the portion of the
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taxable period ending on September 5, 2006. We are
generally liable for all other taxes attributable to us. Changes
in the amounts payable or receivable by us under the
stipulations of this agreement may impact our tax provision in
any period.
This excerpt taken from the HBI 10-K filed Sep 28, 2006. Income
Taxes
Historically, all income taxes have been computed and reported
on a separate return basis as if we were not part of Sara Lee.
Deferred taxes were recognized for the future tax effects of
temporary differences between financial and income tax reporting
using tax rates in effect for the years in which the differences
are expected to reverse. Net operating loss carry forwards had
been determined in our Combined and Consolidated Financial
Statements as if we were separate from Sara Lee, resulting in a
different net operating loss carry forward amount than reflected
by Sara Lee. Given our continuing losses in certain geographic
locations on a separate return basis, a valuation reserve has
been established for the value of the deferred tax assets
relating to these specific locations. Federal income taxes are
provided on that portion of our income of foreign subsidiaries
that is expected to be remitted to the United States and be
taxable, reflecting the historical decisions made by Sara Lee
with regards to earnings permanently reinvested in foreign
jurisdictions. In periods after the spin off, we may make
different decisions as to the amount of earnings permanently
reinvested in foreign jurisdictions, due to anticipated cash
flow or other business requirements, which may result in a
different federal income tax provision.
Sara Lee’s management periodically estimates the probable
tax obligations of Sara Lee using historical experience in tax
jurisdictions and its informed judgment. These estimates have
been included in our Combined and Consolidated Statements of
Income to the extent applicable to us on a stand-alone basis.
There are inherent uncertainties related to the interpretation
of tax regulations in the jurisdictions in which we transact
business. The judgments and estimates made at a point in time
may change based on the outcome of tax audits, as well as
changes to, or further interpretations of, regulations. Sara Lee
has historically adjusted its income tax expense in the period
in which these events occur, and these adjustments are included
in our Combined and Consolidated Statements of Income. If such
changes take place, there is a risk that our effective tax rate
may increase or decrease in any period.
In conjunction with the spin off, we and Sara Lee entered into a
Tax Sharing Agreement. This agreement allocates responsibilities
between us and Sara Lee for taxes and certain other tax matters.
Under the Tax Sharing Agreement, Sara Lee generally is liable
for all U.S. federal, state, local and foreign income taxes
attributable to us with respect to taxable periods ending on or
before September 5, 2006. Sara Lee also is liable for
income taxes attributable to us with respect to taxable periods
beginning before September 5, 2006 and ending after
September 5, 2006, but only to the extent those taxes are
allocable to the portion of the taxable period ending on
September 5, 2006. We are generally liable for all other
taxes attributable to us. Changes in the amounts payable or
receivable by us under the stipulations of this agreement may
impact our tax provision in any period.
This excerpt taken from the HBI 8-K filed Sep 5, 2006. (o) Income Taxes Income taxes are prepared on a separate return basis as if the Company had been a group of separate legal entities. As a result, actual tax transactions that would not have occurred had the Company been a separate entity
F-13
Table of ContentsHANESBRANDS Notes to Combined and Consolidated Financial Statements—(Continued) (dollars in thousands, except per share data)
have been eliminated in the preparation of these Combined and Consolidated Financial Statements. In the periods presented, there was no formal tax sharing agreement between the Company and Sara Lee. Deferred taxes are recognized for the future tax effects of temporary differences between financial and income tax reporting using tax rates in effect for the years in which the differences are expected to reverse. Given continuing losses in certain jurisdictions in which the Company operates on a separate return basis, a valuation allowance has been established for the full value of the net deferred tax assets in these specific locations. Net operating loss carryforwards, charitable contribution carryforwards and capital loss carryforwards have been determined in these Combined and Consolidated Financial Statements as if the Company had been a group of legal entities separate from Sara Lee, which results in different carryforward amounts than those shown by Sara Lee. Sara Lee periodically estimates the probable tax obligations using historical experience in tax jurisdictions and informed judgments. There are inherent uncertainties related to the interpretation of tax regulations in the jurisdictions in which the Company transacts business. The judgments and estimates made at a point in time may change based on the outcome of tax audits, as well as changes to or further interpretations of regulations. The Company adjusts its income tax expense in the period in which these events occur. If such changes take place, there is a risk that the tax rate may increase or decrease in any period. | EXCERPTS ON THIS PAGE:
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