Graco 2008 Annual Report Download - page 64

Newell Rubbermaid Inc. 2008 Annual Report
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Assumed health care cost trends have been used in the valuation of the benefit obligations for postretirement benefits. The trend rate used to measure
the benefit obligation was 9% for all retirees in 2008, declining by 0.5% each year to 5% in 2016 and thereafter.
The health care cost trend rate significantly affects the reported postretirement benefit costs and obligations. A one-percentage point change in the
assumed rate would have the following effects (in millions):
1% Increase 1% Decrease
Effect on total of service and interest cost components $ 0.9 $ (0.8)
Effect on postretirement benefit obligations $13.9 $(12.3)
Estimated future benefit payments under the Company’s defined benefit pension plans and other postretirement benefit plans are as follows as of
December 31, 2008 (in millions):
2009 2010 2011 2012 2013 2014-2018
Pension benefits (1) $75.4 $76.6 $78.0 $80.2 $82.7 $443.9
Other postretirement benefits $19.3 $18.9 $18.3 $17.6 $17.3 $ 82.5
(1) Certain pension benefit payments will be funded by plan assets.
The estimated other postretirement benefit payments are net of annual Medicare Part D subsidies of approximately $3.0 million per year. The Company
expects to make direct cash benefit payments of approximately $16.1 million for its other postretirement benefit plans in 2009.
FOOTNOTE 13
EARNINGS PER SHARE
The calculation of basic and diluted earnings per share for the years ended December 31 is shown below (in millions, except per share data):
2008 2007 2006
Numerator for basic (loss) earnings per share:
(Loss) income from continuing operations $ (51.8) $479.2 $470.7
Loss from discontinued operations (0.5) (12.1) (85.7)
Net (loss) income for basic earnings per share $ (52.3) $467.1 $385.0
Numerator for diluted earnings per share:
(Loss) income from continuing operations $ (51.8) $479.2 $470.7
Effect of convertible preferred securities, net of tax (1) — 14.2 —
(Loss) income from continuing operations for diluted earnings per share (51.8) 493.4 470.7
Loss from discontinued operations (0.5) (12.1) (85.7)
Net (loss) income for diluted earnings per share $ (52.3) $481.3 $385.0
Denominator:
Denominator for basic (loss) earnings per share — weighted-average shares 277.0 276.0 274.6
Dilutive securities (2) — 1.8 0.9
Convertible preferred securities (1) — 8.3 —
Denominator for diluted (loss) earnings per share 277.0 286.1 275.5
Basic (loss) earnings per share: (Loss) earnings from continuing operations $ (0.19) $ 1.74 $ 1.71
Loss from discontinued operations — (0.04) (0.31)
(Loss) earnings per share $ (0.19) $ 1.69 $ 1.40
Diluted (loss) earnings per share:
(Loss) earnings from continuing operations $ (0.19) $ 1.72 $ 1.71
Loss from discontinued operations — (0.04) (0.31)
(Loss) earnings per share $ (0.19) $ 1.68 $ 1.40
(1) The convertible preferred securities are anti-dilutive for 2008 and 2006, and therefore have been excluded from diluted earnings per share. Had the convertible preferred securities been
included in the diluted earnings per share calculation, $14.2 million of expenses would have been added back to the net income (loss) for both 2008 and 2006. Weighted average shares
outstanding would have increased by 8.3 million shares for both 2008 and 2006, respectively.
(2) Dilutive securities include “in the money options” and restricted stock awards. The weighted-average shares outstanding for 2008, 2007 and 2006 exclude the effect of approximately
17.2 million, 9.5 million and 11.1 million stock options, respectively, because such options were anti-dilutive.