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Newell Rubbermaid Inc. 2007 Annual Report
61
Foreign Currency Management
The Company’s foreign exchange risk management policy emphasizes hedging anticipated intercompany and third party commercial transaction exposures
of generally one-year duration or less. The following table summarizes the Company’s forward exchange contracts, long-term cross currency interest rate
swaps and option contracts in U.S. dollars by major currency and contractual amount. The “buy” amounts represent the U.S. equivalent of commitments to
purchase foreign currencies, and the “sell” amounts represent the U.S. equivalent of commitments to sell foreign currencies according to the local needs of
the subsidiaries. The contractual amounts of significant forward exchange contracts, long-term cross currency interest rate swaps and option contracts
and their fair values as of December 31, were as follows (in millions):
2007 2006
Buy Sell Buy Sell
British Pounds $485.6 $ 221.7 $429.8 $ 207.2
Canadian Dollars 1.2 296.7 0.9 263.6
Euro 3.6 871.2 2.5 735.0
Other 40.6 14.4 21.0 21.6
Contractual Value $531.0 $1,404.0 $454.2 $1,227.4
Fair Value $ (35.9) $ 36.7 $ (3.4) $ 0.7
The net loss recognized in 2007, 2006 and 2005 for matured cash flow forward exchange contracts, option contracts and commodity swaps was
$6.6 million, $4.2 million and $4.5 million, net of tax, respectively, which was recognized in the Consolidated Statements of Income. The Company estimates
that a loss of $1.3 million, net of tax, deferred in accumulated other comprehensive income will be recognized in earnings in 2008.
See Footnote 17 for information regarding the termination of a cross currency interest rate swap.
FOOTNOTE 12
Commitments
Lease Commitments
The Company leases manufacturing, warehouse and other facilities, real estate, transportation, and data processing and other equipment under leases that
expire at various dates through the year 2020. Rent expense, which is recognized on a straight-line basis over the life of the lease term, was $90.2 million,
$84.4 million and $103.6 million in 2007, 2006 and 2005, respectively.
Future minimum rental payments for operating leases with initial or remaining terms in excess of one year are as follows as of December 31, 2007 (in millions):
2008 2009 2010 2011 2012 Thereafter Total
$81.7 $63.8 $47.3 $35.9 $34.9 $99.5 $363.1
Purchase Obligations
The Company enters into certain obligations to purchase finished goods, raw materials, components and services pursuant to legally enforceable and
binding obligations, which include all significant terms. The Company is also obligated to purchase the minority interest of a majority owned subsidiary
in 2009, the estimated purchase price of which is included in the purchase obligations amount shown in the table below.
As of December 31, 2007, the Company’s future estimated total purchase obligations are as follows (in millions):
2008 2009 Total
$275.8 $30.5 $306.3