Hillenbrand, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Sep. 30, 2011

Summary of significant components of income before income taxes and the consolidated income tax provision

	Fiscal Year Ended September 30,
	2011			2010			2009
Domestic	$	140.5		$	141.2		$	159.4
Foreign	17.3			5.2			1.4
Total earnings before income taxes	$	157.8		$	146.4		$	160.8

Income tax expense:
Current provision:
Federal	$	45.4		$	62.6		$	47.5
State	6.1			8.9			7.2
Foreign	4.7			1.1			0.6
Total current provision	56.2			72.6			55.3

Deferred provision (benefit):
Federal	(1.6		)	(15.5		)	3.0
State	(2.4		)	(3.3		)	0.3
Foreign	(0.5		)	0.3			(0.1		)
Total deferred provision (benefit)	(4.5		)	(18.5		)	3.2
Income tax expense	$	51.7		$	54.1		$	58.5

Schedule reconciling expected tax expense under the U.S. Federal tax rate to the tax expense reported for financial reporting purposes

	Fiscal Year Ended September 30,
	2011		2010		2009
Federal statutory rates	35.0	%	35.0	%	35.0	%
Adjustments resulting from the tax effect of:
State and income taxes, net of federal benefit	1.8		3.1		2.6
Foreign income tax rate differential	(1.2	)	(0.3	)	(0.1	)
Domestic manufacturers deduction	(2.7	)	(2.0	)	(1.9	)
Non-deductible acquisition costs			0.5
Valuation allowance	(0.6	)	(0.8	)	0.1
Other, net	0.5		1.5		0.7
Effective income tax rate	32.8	%	37.0	%	36.4	%

Summary of deferred income tax balance sheet accounts

	September 30,
	2011			2010
Deferred tax assets:
Employee benefit accruals	$	67.7		$	64.2
Rebates and other discounts	7.5			6.8
Self-insurance reserves	5.9			5.6
Forethought Note discount				4.0
Casket pricing obligation	3.3			3.7
Allowance for doubtful accounts	2.4			2.4
Inventory	2.8			2.0
Other, net	10.5			10.9
Total deferred tax assets before valuation allowance	100.1			99.6
Less valuation allowance	(1.0		)	(2.0		)
Total deferred tax assets, net	99.1			97.6
Deferred tax liabilities:
Depreciation	(11.1		)	(9.0		)
Amortization	(69.9		)	(75.3		)
Unremitted earnings of foreign operations	(11.0		)	(8.2		)
Other, net	(6.1		)	(15.7		)
Total deferred tax liabilities	(98.1		)	(108.2		)
Deferred tax assets and liabilities, net	$	1.0		$	(10.6

Amounts recorded in the consolidated balance sheets:
Deferred taxes, current	$	27.5		$	25.1
Deferred taxes, long-term	(26.5		)	(35.7		)

Deferred tax assets and liabilities, net	$	1.0		$	(10.6	)

Activity within the reserve for unrecognized tax benefits

	September 30,
	2011			2010
Balance at October 1	$	7.8		$	8.3
Additions for tax positions related to the current year	0.2			0.8
Additions for tax positions of prior years	0.5
Reductions for tax positions of prior years	(1.2		)	(1.7		)
Settlements				(0.2		)
Balance attributable to acquisition of K-Tron				0.6
Balance at September 30	$	7.3		$	7.8

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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