Black & Decker CYCLONE BLC12600BUC Manuel d'utilisateur télécharger pdf (Page 77)

one year after formal notification of the states. The Corporation generally remains subject to examination of its various income tax

returns in its significant jurisdictions outside the U.S. for periods ranging from three to five years after the date the return was filed.

However, in Canada and Germany, the Corporation remains subject to examination of its tax returns for 2001 and later years, and

1999 and later years, respectively.

During 2003, the Corporation received notices of proposed adjustments from the U.S. Internal Revenue Service (IRS) in connection

with audits of the tax years 1998 through 2000. The principal adjustment proposed by the IRS, and disputed by the Corporation,

consisted of the disallowance of a capital loss deduction taken in the Corporation’s tax returns and interest on the deficiency. This

matter was the subject of litigation between the Corporation and the U.S. government. If the U.S. government were to have prevailed

in its disallowance of the capital loss deduction and imposition of related interest, it would have resulted in a cash outflow by the

Corporation of approximately $180 million. If the Corporation were to have prevailed, it would have resulted in the Corporation

receiving a refund of taxes previously paid of approximately $50 million, plus interest. In December 2007, the Corporation and the

U.S. government reached a settlement agreement with respect to the previously described litigation. That settlement agreement

resolved the litigation relating to the audits of the tax years 1998 through 2000 and also resolved the treatment of this tax position in

subsequent years. As a result of the settlement agreement, the Corporation recognized a $153.4 million reduction to tax expense in

2007, representing a reduction of the previously unrecognized tax benefit associated with the IRS’s disallowance of the capital loss,

the imposition of related interest, and the effects of certain related tax positions taken in subsequent years. The effect of tax positions

taken in subsequent years included the recognition of $31.4 million of previously unrecognized net operating loss carryforwards of a

subsidiary. The IRS closing agreements were finalized in 2008. The Corporation made cash payments of approximately $50 million

during 2008 relating to this settlement.

Judgment is required in assessing the future tax consequences of events that have been recognized in the Corporation’s financial

statements or income tax returns. Additionally, the Corporation is subject to periodic examinations by taxing authorities in many

countries. The Corporation is currently undergoing periodic examinations of its tax returns in the United States (both federal and

state), Canada, Germany, and the United Kingdom. The IRS completed its examination of the Corporation’s U.S. federal income tax

returns for 2004 and 2005 in 2008. At that time, the Corporation received notices of proposed adjustments from the IRS in conjunction

with those audits. The Corporation vigorously disputed the position taken by the IRS on these matters and initiated an appeals process

with the IRS. During 2009, the Corporation reached a tentative settlement agreement with IRS appeals for those years. If that

settlement – currently pending approval by the Joint Committee on Taxation of the U.S. Congress – is finalized, the Corporation will

release tax reserves. The IRS is currently examining the Corporation’s U.S. federal income tax returns for 2006 and 2007. To date, no

proposed adjustments have been issued; however, the Corporation expects that the IRS will complete that examination in 2010. The

Corporation is also subject to legal proceedings regarding certain of its tax positions in a number of countries, including Italy. The

final outcome of the future tax consequences of these examinations and legal proceedings as well as the outcome of competent

authority proceedings, changes in regulatory tax laws, or interpretation of those tax laws, changes in income tax rates, or expiration of

statutes of limitation could impact the Corporation’s financial statements. The Corporation is subject to the effects of these matters

occurring in various jurisdictions. Accordingly, the Corporation has tax reserves recorded for which it is reasonably possible that the

amount of the unrecognized tax benefit will increase or decrease within the next twelve months. Any such increase or decrease could

have a material affect on the financial results for any particular fiscal quarter or year. However, based on the uncertainties associated

with litigation and the status of examinations, including the protocols of finalizing audits by the relevant tax authorities, which could

include formal legal proceedings, it is not possible to estimate the impact of any such change.

Source: BLACK & DECKER CORP, 10-K, February 19, 2010 Powered by Morningstar

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Black & Decker CYCLONE BLC12600BUC Manuel d'utilisateur Page 77