EDGEWELL PERSONAL CARE CoEPC
EDGEWELL PERSONAL CARE Co Income Taxes Disclosure
Note 4 - Income Taxes
The provisions for income taxes from continuing operations consisted of the following:
| Fiscal Year | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Currently payable: | |||||||||||||||||
| United States - Federal | $ | (6.8) | $ | 6.3 | $ | 12.5 | |||||||||||
| State | (0.4) | 0.2 | 3.5 | ||||||||||||||
| Foreign | 27.1 | 25.4 | 21.5 | ||||||||||||||
| Total current | 19.9 | 31.9 | 37.5 | ||||||||||||||
| Deferred: | |||||||||||||||||
| United States - Federal | (14.7) | (4.8) | (4.5) | ||||||||||||||
| State | (1.8) | 1.5 | (0.6) | ||||||||||||||
| Foreign | (5.2) | (6.3) | 0.6 | ||||||||||||||
| Total deferred | (21.7) | (9.6) | (4.5) | ||||||||||||||
| Income tax provision | $ | (1.8) | $ | 22.3 | $ | 33.0 | |||||||||||
The source of pre-tax earnings was:
| Fiscal Year | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| United States | $ | (105.7) | $ | (13.3) | $ | 37.6 | |||||||||||
| Foreign | 129.3 | 134.2 | 110.1 | ||||||||||||||
| Pre-tax earnings | $ | 23.6 | $ | 120.9 | $ | 147.7 | |||||||||||
A reconciliation of income taxes with the amounts computed at the statutory federal income tax rate follows:
| Fiscal Year | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Computed tax at federal statutory rate | $ | 5.0 | 21.0 | % | $ | 25.4 | 21.0 | % | $ | 31.0 | 21.0 | % | |||||||||||||||||||||||
| State income taxes, net of federal tax benefit | (2.4) | (10.2) | 0.9 | 0.7 | 2.7 | 1.8 | |||||||||||||||||||||||||||||
Foreign tax less than the federal rate (1) | (4.1) | (17.1) | (9.1) | (7.6) | (1.0) | (0.7) | |||||||||||||||||||||||||||||
| Adjustments to prior years’ tax accruals | (8.6) | (36.2) | (4.3) | (3.5) | (6.1) | (4.2) | |||||||||||||||||||||||||||||
Other taxes including repatriation of foreign earnings | 5.5 | 23.8 | 7.1 | 5.9 | 4.4 | 3.1 | |||||||||||||||||||||||||||||
Compensation adjustments | 3.8 | 15.9 | 4.0 | 3.4 | 1.9 | 1.2 | |||||||||||||||||||||||||||||
| Other, net | 0.1 | 0.3 | 1.7 | 1.4 | (0.5) | (0.3) | |||||||||||||||||||||||||||||
| Uncertain tax positions | (6.7) | (28.4) | (3.4) | (2.8) | 0.6 | 0.4 | |||||||||||||||||||||||||||||
| Goodwill impairment | 8.4 | 35.3 | — | — | — | — | |||||||||||||||||||||||||||||
| Rerate of deferred tax balances | (2.8) | (11.7) | — | — | — | — | |||||||||||||||||||||||||||||
| Total | $ | (1.8) | (7.3) | % | $ | 22.3 | 18.5 | % | $ | 33.0 | 22.3 | % | |||||||||||||||||||||||
(1) Includes the impact of foreign valuation allowances.
The deferred tax assets and deferred tax liabilities recorded on the Consolidated Balance Sheet include current and noncurrent amounts and were as follows:
| September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax liabilities: | |||||||||||
| Depreciation and property differences | $ | (14.2) | $ | (18.3) | |||||||
| Amortizable assets | (220.0) | (229.3) | |||||||||
| Lease liabilities | (20.0) | (23.1) | |||||||||
| Other tax liabilities | (0.2) | (7.3) | |||||||||
| Gross deferred tax liabilities | (254.4) | (278.0) | |||||||||
| Deferred tax assets: | |||||||||||
| Accrued liabilities | 50.8 | 54.2 | |||||||||
| Deferred and share-based compensation | 14.5 | 14.4 | |||||||||
| Tax carryforwards and tax credits | 69.4 | 51.1 | |||||||||
| Postretirement benefits other than pensions | 0.9 | 1.3 | |||||||||
| Pension plans | 12.9 | 28.0 | |||||||||
| Inventory differences | 5.1 | 5.9 | |||||||||
| Lease right of use assets | 19.8 | 23.3 | |||||||||
| Deferred revenue | 1.0 | 4.2 | |||||||||
| Other tax assets | 7.3 | 9.4 | |||||||||
| Gross deferred tax assets | 181.7 | 191.8 | |||||||||
| Valuation allowance | (20.9) | (21.5) | |||||||||
| Net deferred tax liabilities | $ | (93.6) | $ | (107.7) | |||||||
There were no material tax loss carryforwards that expired in fiscal 2025. Future expirations of tax loss carryforwards and tax credits, if not utilized, are not expected to be material from 2026 through 2042. The remaining tax loss carryforwards and credits have no expiration. The valuation allowance is primarily attributable to tax loss carryforwards, other carryforwards, and certain deferred tax assets impacted by the deconsolidation of the Company’s Venezuelan subsidiaries.
The Company generally repatriates a portion of current year earnings from select non-US subsidiaries only if the economic cost of the repatriation is not considered material. No provision is made for additional taxes on undistributed earnings of foreign affiliates that are intended and planned to be indefinitely invested in the affiliate. The Company intends to, and has plans to, reinvest these earnings indefinitely in its foreign subsidiaries to, amongst other things, fund local operations, fund pension and other post-retirement obligations, fund capital projects and to support foreign growth initiatives including potential acquisitions. As of September 30, 2025, $872.9 of foreign subsidiary earnings were considered indefinitely invested in those businesses. If the Company repatriated any of the earnings it could be subject to withholding tax and the impact of foreign currency movements. Accordingly, it is not practical to calculate a specific potential tax exposure. Applicable income and withholding taxes will be provided on these earnings in the periods in which they are no longer considered reinvested.
Unrecognized tax benefits activity is summarized below:
| 2025 | 2024 | 2023 | |||||||||||||||
| Unrecognized tax benefits, beginning of year | $ | 16.6 | $ | 19.7 | $ | 19.4 | |||||||||||
| Additions based on current year tax positions and acquisitions | 2.2 | 2.1 | 1.9 | ||||||||||||||
| Settlements with taxing authorities and statute expirations | (7.6) | (5.2) | (1.6) | ||||||||||||||
| Unrecognized tax benefits, end of year | $ | 11.2 | $ | 16.6 | $ | 19.7 | |||||||||||
Included in the unrecognized tax benefits noted above was $10.4 of uncertain tax positions that would affect the Company’s effective tax rate, if recognized. The Company does not expect any material increases or decreases to its unrecognized tax benefits within 12 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.
The Company 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. The Company accrued $2.3 of interest, (net of the deferred
tax asset of $0.3) at September 30, 2025, and $3.9 of interest, (net of the deferred tax asset of $0.7) at September 30, 2024. Interest was computed on the difference between the tax position recognized in accordance with GAAP and the amount previously taken or expected to be taken in the Company’s tax returns.
The Company files income tax returns in the U.S. federal jurisdiction, various cities and states, and more than 30 foreign jurisdictions where the Company has operations. In general, U.S. federal income tax returns for tax years ended September 30, 2022 and after remain subject to examination by the Internal Revenue Service (the “IRS”). With few exceptions, the Company is no longer subject to state and local income tax examinations for years before September 30, 2015. The status of international income tax examinations varies by jurisdiction. At this time, the Company 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 in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and several new US tax law changes. The legislation has multiple effective dates with certain provisions effective for the Company beginning fiscal 2026. The impact of these tax law changes are not material to our current year consolidated financial statements and we are currently assessing the impact on future years.Free Sentinel
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 18, 2025 | Showing above |
| 2019 | Nov 26, 2019 | |
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.