Income Taxes (Tables)

12 Months Ended

Sep. 30, 2020

Income tax expense was calculated based upon the following components of income (loss) from operations before income taxes for the years ended September 30, 2020, 2019 and 2018:


	SBH						SB/RH
(in millions)	2020		2019		2018		2020		2019		2018
United States	$	93.7	$	(267.3)	$	(140.4)	$	25.0	$	(202.7)	$	25.4
Outside the United States	61.7		73.5		104.7		61.6		73.5		104.7
Income (loss) from operations before income taxes	$	155.4	$	(193.8)	$	(35.7)	$	86.6	$	(129.2)	$	130.1

Schedule of Components of Income Tax Expense

The components of income tax expense for the years ended September 30, 2020, 2019 and 2018 are as follows:


	SBH						SB/RH
(in millions)	2020		2019		2018		2020		2019		2018
Current tax expense (benefit):
U.S. Federal	$	0.4	$	(47.6)	$	58.1	$	0.4	$	(47.6)	$	58.4
Foreign	23.2		44.3		34.7		23.2		44.3		34.7
State and local	0.5		2.7		1.0		0.5		2.7		1.0
Total current tax expense (benefit)	24.1		(0.6)		93.8		24.1		(0.6)		94.1
Deferred tax expense (benefit):
U.S. Federal	37.9		9.9		(539.7)		23.7		24.3		(170.0)
Foreign	(10.6)		(4.9)		3.1		(10.6)		(4.9)		3.0
State and local	19.5		(11.5)		(19.9)		20.9		(8.1)		(3.9)
Total deferred tax expense (benefit)	46.8		(6.5)		(556.5)		34.0		11.3		(170.9)
Income tax expense (benefit)	$	70.9	$	(7.1)	$	(462.7)	$	58.1	$	10.7	$	(76.8)

Schedule of Reconciliation of Income Tax Expense

The following reconciles the total income tax expense, based on the U.S. Federal statutory income tax rate of 21% for the year ended September 30, 2020, 21% for the year ended September 30, 2019, and 24.5% for the year ended September 30, 2018, with the Company’s recognized income tax expense:


	SBH						SB/RH
(in millions)	2020		2019		2018		2020		2019		2018
U.S. Statutory federal income tax expense (benefit)	$	32.6	$	(40.7)	$	(8.8)	$	18.2	$	(27.1)	$	31.9
Permanent items	14.2		3.7		7.6		14.2		3.8		(3.5)
Goodwill impairment	2.8		12.2		—		2.8		12.2		—
Foreign statutory rate vs. U.S. statutory rate	(15.4)		(10.3)		3.0		(15.4)		(10.3)		3.0
State income taxes, net of federal effect	4.8		(14.2)		(2.9)		2.3		(11.1)		(1.9)
State effective rate change	7.2		4.6		—		7.8		4.6		—
Tax reform act - U.S. rate change	—		—		(166.7)		—		—		(181.7)
Global intangible low tax income inclusion	6.0		8.6		—		6.0		8.6		—
Foreign dividend received deduction tax law change	—		95.9		—		—		95.9		—
Tax reform act - mandatory repatriation	—		(48.0)		73.1		—		(48.0)		73.1
Residual tax on foreign earnings	6.5		1.5		5.9		6.5		1.5		5.9
Change in valuation allowance	9.9		(29.9)		(365.6)		9.8		(29.9)		(0.3)
Unrecognized tax (benefit) expense	(7.0)		6.2		(0.1)		(7.0)		6.2		(0.1)
Share based compensation adjustments	0.1		4.6		(5.5)		0.5		4.6		(0.5)
Research and development tax credits	(2.7)		(4.4)		(1.9)		(2.7)		(4.4)		(1.9)
Foreign rate differential on intercompany transfer of intangibles	4.6		—		—		4.6		—		—
Partnership outside basis adjustment	5.9		2.1		(8.3)		6.5		2.4		0.7
Return to provision adjustments and other, net	1.4		1.0		7.5		4.0		1.7		(1.5)
Income tax expense (benefit)	$	70.9	$	(7.1)	$	(462.7)	$	58.1	$	10.7	$	(76.8)

Schedule of Deferred Tax Assets and Deferred Tax Liabilities

The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities as of September 30, 2020 and 2019 are as follows:


	SBH				SB/RH
(in millions)	2020		2019		2020		2019
Deferred tax assets
Employee benefits	$	38.0	$	37.6	$	36.3	$	36.0
Restructuring	0.4		0.9		0.4		0.9
Inventories and receivables	19.7		16.8		19.7		16.8
Marketing and promotional accruals	14.9		10.6		14.9		10.6
Property, plant and equipment	27.3		5.9		27.3		5.9
Unrealized losses	19.8		12.8		19.8		12.8
Intangibles	13.6		19.0		13.6		19.0
Investment in subsidiaries	0.2		0.3		0.2		0.3
Net operating loss and other carry forwards	515.6		551.4		190.4		250.6
Other	40.3		32.7		39.2		31.9
Total deferred tax assets	689.8		688.0		361.8		384.8
Deferred tax liabilities
Property, plant and equipment	30.1		11.1		30.1		11.1
Unrealized gains	13.5		9.0		13.5		9.0
Intangibles	296.8		311.8		296.8		311.8
Investment in partnership	63.3		37.6		63.0		55.0
Taxes on unremitted foreign earnings	4.6		5.0		4.6		5.0
Other	17.2		10.9		17.2		10.8
Total deferred tax liabilities	425.5		385.4		425.2		402.7
Net deferred tax liabilities	264.3		302.6		(63.4)		(17.9)
Valuation allowance	(306.8)		(307.0)		(202.4)		(202.8)
Net deferred tax liabilities, net valuation allowance	$	(42.5)	$	(4.4)	$	(265.8)	$	(220.7)
Reported as:
Deferred charges and other	$	22.9	$	46.2	$	22.9	$	30.7
Deferred taxes (noncurrent liability)	65.4		50.6		288.7		251.4

Schedule of Unrecognized Tax Benefits

The following table summarizes the changes to the amount of unrecognized tax benefits for the years ended September 30, 2020, 2019 and 2018:


(in millions)	2020		2019		2018
Unrecognized tax benefits, beginning of year	$	20.9	$	15.0	$	15.6
Gross increase – tax positions in prior period	2.1		5.3		0.9
Gross decrease – tax positions in prior period	(4.3)		(0.4)		(3.5)
Gross increase – tax positions in current period	2.8		3.5		2.5
Settlements	(1.9)		(1.1)		(0.3)
Lapse of statutes of limitations	(4.3)		(1.4)		(0.2)
Unrecognized tax benefits, end of year	$	15.3	$	20.9	$	15.0