ENERGIZER HOLDINGS, INC.ENR
ENERGIZER HOLDINGS, INC. Income Taxes Disclosure
Income Taxes
Production tax credits under the Inflationary Reduction Act - On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. The IRA includes multiple incentives to promote clean energy and energy storage manufacturing among other provisions. The tax credits are available from calendar year 2023 to 2032 subject to phase out beginning in calendar year 2030. In December 2024, the United States Treasury issued final regulations related to the Section 45X Advanced Manufacturing Production Credit ("production credit"), which provided updated definitions and additional guidance and examples on production credits. The production credit is a refundable tax credit for battery cells and modules manufactured in the United States, as well as a credit for electrode active material and other components produced for batteries.
Following the final regulations on Section 45X that became effective in December 2024, the Company began reviewing the
potential applicability to our batteries and various components produced in the United States for application of the production
credits. The Company achieved reasonable assurance over our ability to claim the production credits during fiscal 2025 and recognized an estimated $120.9 reduction to COGS within the Consolidated Statement of Income for the tax credit on production and sales retroactive to January 1, 2023. The credit was also reflected on the Consolidated Balance Sheet as a reduction of income tax payable within Other current liabilities and any credit generated in excess of those liabilities is reflected in Other current assets or Other assets depending on the estimated timing of the refund or future utilization. The credit recognized in the twelve months ended September 30, 2025 included an estimated $41.6 for the credit related to fiscal 2025 production and an additional $79.3 credit for fiscal 2023 and 2024 production since the effective date of the IRA, January 1, 2023. Subsequent to September 30, 2025, the Company received the fiscal 2024 refund including the production credit from that year.
The provisions for income taxes consisted of the following:
| For the Years Ended September 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| United States - Federal | $ | 4.9 | $ | 10.7 | $ | 14.4 | |||||||||||
| State | 3.0 | 1.8 | 5.3 | ||||||||||||||
| Foreign | 53.8 | 46.5 | 54.0 | ||||||||||||||
| Total current | $ | 61.7 | $ | 59.0 | $ | 73.7 | |||||||||||
| Deferred: | |||||||||||||||||
| United States - Federal | (12.3) | (43.9) | (34.8) | ||||||||||||||
| State | 0.4 | (5.2) | (4.5) | ||||||||||||||
| Foreign | (4.7) | 5.8 | 0.8 | ||||||||||||||
| Total deferred | $ | (16.6) | $ | (43.3) | $ | (38.5) | |||||||||||
| Provision for income taxes | $ | 45.1 | $ | 15.7 | $ | 35.2 | |||||||||||
The source of pre-tax earnings was:
| For the Years Ended September 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| United States | $ | 91.5 | $ | (177.7) | $ | (105.3) | |||||||||||
| Foreign | 192.6 | 231.5 | 281.0 | ||||||||||||||
| Pre-tax earnings | $ | 284.1 | $ | 53.8 | $ | 175.7 | |||||||||||
A reconciliation of income tax provision with the amounts computed at the statutory federal income tax rate follows:
| For the Years Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Computed tax at federal statutory rate | $ | 59.7 | 21.0 | % | $ | 11.3 | 21.0 | % | $ | 36.9 | 21.0 | % | |||||||||||||||||||||||
| State income taxes, net of federal tax benefit | 2.7 | 1.0 | (2.2) | (4.1) | (0.6) | (0.3) | |||||||||||||||||||||||||||||
| Foreign rate differential | 8.0 | 2.8 | 2.3 | 4.3 | (4.2) | (2.4) | |||||||||||||||||||||||||||||
| Adjustments to prior years' tax accruals | (2.4) | (0.8) | (1.1) | (2.0) | 3.1 | 1.8 | |||||||||||||||||||||||||||||
| Other taxes including repatriation of foreign earnings and GILTI | 2.0 | 0.7 | 4.7 | 8.7 | 2.5 | 1.4 | |||||||||||||||||||||||||||||
| Tax credits and incentives | (25.4) | (8.9) | — | — | (2.1) | (1.2) | |||||||||||||||||||||||||||||
| Uncertain tax positions | (3.5) | (1.2) | (2.3) | (4.3) | (3.2) | (1.8) | |||||||||||||||||||||||||||||
| Other, net | 4.0 | 1.3 | 3.0 | 5.6 | 2.8 | 1.5 | |||||||||||||||||||||||||||||
| Total | $ | 45.1 | 15.9 | % | $ | 15.7 | 29.2 | % | $ | 35.2 | 20.0 | % | |||||||||||||||||||||||
In fiscal 2025, the Company claimed production tax credits under Section 45X related to batteries and battery components. The Company was granted a foreign tax incentive providing for a reduced tax rate on profits related to certain battery productions which expired in March 2023.
The deferred tax assets and deferred tax liabilities at the end of each year are as follows:
| September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Accrued liabilities | $ | 46.4 | $ | 46.0 | |||||||
| Deferred and stock-related compensation | 10.3 | 10.2 | |||||||||
| Tax loss carryforwards and tax credits | 22.6 | 23.7 | |||||||||
| Intangible assets | 2.1 | 1.7 | |||||||||
| Pension plans | 7.4 | 7.6 | |||||||||
| Inventory differences and other tax assets | 30.5 | 25.9 | |||||||||
| Operating leases | 23.4 | 24.0 | |||||||||
| Interest expense limited under Sec 163j | 160.9 | 138.7 | |||||||||
| Gross deferred tax assets | 303.6 | 277.8 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Depreciation and property differences | (25.6) | (24.6) | |||||||||
| Intangible assets | (75.5) | (68.4) | |||||||||
| Operating leases | (22.3) | (23.3) | |||||||||
| Other tax liabilities | (11.3) | (14.6) | |||||||||
| Gross deferred tax liabilities | (134.7) | (130.9) | |||||||||
| Valuation allowance | (8.4) | (9.4) | |||||||||
| Net deferred tax assets | $ | 160.5 | $ | 137.5 | |||||||
Future expirations of tax loss carryforwards and tax credits, if not utilized, are $4.4 between fiscal years 2026 and 2028 at September 30, 2025. In addition, there are $9.8 of tax loss carryforwards and credits with no expiration at September 30, 2025. The valuation allowance is primarily attributed to tax loss carryforwards and tax credits outside the U.S.
In general, it is our practice and intention to permanently reinvest the earnings of our foreign subsidiaries and repatriate earnings only when the tax impact is zero or very minimal. No provision has been provided for taxes that would result upon repatriation of our foreign investments to the United States. At September 30, 2025, approximately $1,453 of basis differential in our investment in foreign affiliates was considered indefinitely invested in those businesses. We estimate that the U.S. federal income tax liability that could potentially arise if indefinitely invested basis of foreign subsidiaries were repatriated in full to the U.S. would be significant. While it is not practicable to calculate a specific potential U.S. tax exposure due to changing statutory rates in foreign jurisdictions over time, as well as other factors, we estimate the potential U.S. tax may be in excess of $305, if all unrealized basis differences were repatriated assuming foreign cash was available to do so.
The unrecognized tax benefits activity is summarized below:
| For the Years Ended September 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Unrecognized tax benefits, beginning of year | $ | 5.2 | $ | 7.1 | $ | 9.2 | |||||||||||
| Additions based on current year tax positions and acquisitions | 0.1 | 0.1 | — | ||||||||||||||
| Settlements with taxing authorities/statute expirations | (2.8) | (2.0) | (2.1) | ||||||||||||||
| Unrecognized tax benefits, end of year | $ | 2.5 | $ | 5.2 | $ | 7.1 | |||||||||||
Included in the unrecognized tax benefits noted above are $2.5 of uncertain tax positions that would affect Energizer’s effective tax rate, if recognized. Energizer does not expect any significant increases or decreases to their unrecognized tax benefits within twelve months of this reporting date. In the Consolidated Balance Sheets, unrecognized tax benefits are classified as Other liabilities (non-current) to the extent that payments are not anticipated within one year.
Energizer classifies accrued interest and penalties related to unrecognized tax benefits in the income tax provision. The accrued interest and penalties are not included in the table above. Energizer has accrued $0.7 of interest (net of the deferred tax asset of less than $0.1) and no penalties at September 30, 2025, $0.9 of interest (net of the deferred tax asset of $0.1) and penalties of $0.5 at September 30, 2024, and $2.2 of interest (net of the deferred tax asset of $0.2) and penalties of $0.9 at September 30, 2023. Interest was computed on the difference between the tax position recognized in accordance with GAAP and the amount expected to be taken in the Company's tax return.
The Company files income tax returns in the U.S. federal jurisdiction, various cities and states, and more than 50 foreign jurisdictions where Energizer has operations. U.S. federal, state and local income tax returns for tax years ended September 30, 2022 and after remain subject to examination by the Internal Revenue Service. There are open examinations in the U.S. and at some of the foreign entities and the status of income tax examinations varies by jurisdiction. At this time, Energizer does not anticipate any material adjustments to its financial statements resulting from tax examinations currently in progress.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into U.S. law, which primarily modified tax provisions from the 2017 Tax Cuts and Jobs Act that include but are not limited to the deduction of U.S.-based research expenditures, the deduction of interest expense, the deduction for foreign-derived intangible income, the tax and related foreign tax credit on GILTI, and the base-erosion anti-abuse tax.
There is no impact of enacted legislation effective for fiscal 2025. The other provisions within the OBBBA have staggered effective dates to be phased in between fiscal years 2026 and 2027, and the Company continues to evaluate the future impact of these provisions.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 18, 2025 | Showing above |
| 2024 | Nov 19, 2024 | |
| 2023 | Nov 14, 2023 | |
| 2022 | Nov 15, 2022 | |
| 2021 | Nov 16, 2021 | |
| 2020 | Nov 17, 2020 | |
| 2019 | Nov 19, 2019 | |
| 2018 | Nov 16, 2018 | |
| 2017 | Nov 14, 2017 | |
| 2016 | Nov 15, 2016 | |
| 2015 | Nov 20, 2015 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.