Graco 2007 Annual Report Download - page 52

Newell Rubbermaid Inc. 2007 Annual Report
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Accumulated Other Comprehensive Loss
The following table displays the components of accumulated other comprehensive loss (in millions):
Foreign Unrecognized After-tax Accumulated
Currency Pension & Other Derivative Other
Translation Postretirement Hedging Comprehensive
Gain Costs, net of tax Gain Loss
Balance at December 31, 2006 $41.6 $(228.7) $2.5 $(184.6)
Current year change 28.2 26.3 6.9 61.4
Balance at December 31, 2007 $69.8 $(202.4) $9.4 $(123.2)
Recent Accounting Pronouncements
In December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business Combinations” (“SFAS 141(R)”). SFAS 141(R) significantly changes the accounting
for business combination transactions by requiring an acquiring entity to recognize all the assets acquired and liabilities assumed in a transaction at the
acquisition-date fair value. Additionally, SFAS 141(R) modifies the accounting treatment for certain specified items related to business combinations and
requires a substantial number of new disclosures. SFAS 141(R) is effective for business combinations with an acquisition date in fiscal years beginning on or
after December 15, 2008, and earlier adoption is prohibited. The Company expects to prospectively adopt SFAS 141(R) on January 1, 2009.
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements
— An Amendment of ARB No. 51”
(“SFAS 160”). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the
amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest and the valuation
of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes reporting requirements that require sufficient
disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 is effective
for fiscal years beginning on or after December 15, 2008 and earlier adoption is prohibited. SFAS 160 is effective for the Company on January 1, 2009. The
Company is still in the process of evaluating the impact SFAS 160 will have on the Company’s consolidated financial statements.
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for
measuring fair value under generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 emphasizes that
fair value is a market-based measurement, not an entity-specific measurement, and states that a fair value measurement should be determined based on
the assumptions that market participants would use in pricing the asset or liability. SFAS 157 applies under other accounting pronouncements that require or
permit fair value measurements, the FASB having previously concluded in those accounting pronouncements that fair value is the relevant measurement
attribute. Accordingly, SFAS 157 does not require any new fair value measurements. In February 2008, the FASB issued Staff Positions 157-1 and 157-2
which remove certain leasing transactions from its scope and partially defer the effective date of SFAS 157 for one year for certain nonfinancial assets
and liabilities. SFAS 157 is effective for fiscal years beginning after November 15, 2007. The Company prospectively adopted the effective provisions of
SFAS 157 on January 1, 2008. The adoption is not expected to have a material impact on the Company’s consolidated financial statements.
FOOTNOTE 2
Acquisitions
Acquisition of Endicia
On July 1, 2007, the Company acquired all of the outstanding equity interests of PSI Systems, Inc. (“Endicia”), provider of Endicia Internet Postage, for
$51.2 million plus related acquisition costs and contingent payments of up to $25.0 million based on future revenues. The acquisition of Endicia, a leading
provider of online postage, increases the Company’s ability to leverage its other technology brands by developing a full range of innovative and integrated
solutions for small and medium-sized businesses. This acquisition was accounted for using the purchase method of accounting and accordingly, based on
a preliminary purchase price allocation, the Company recorded goodwill of $46.2 million in the Consolidated Balance Sheet at December 31, 2007. Pro forma
results of operations would not be materially different as a result of this acquisition and therefore are not presented.
Endicia is party to a lawsuit filed against it alleging patent infringement. In this case, Stamps.com seeks injunctive relief in order to prevent Endicia
from continuing to engage in activities that are alleged to infringe on Stamps.com’s patents. An unfavorable outcome in this litigation, which management
does not believe is probable, could materially adversely affect the Endicia business.