Graco 2012 Annual Report Download - page 74

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68
FOOTNOTE 6
Property, Plant & Equipment, Net
Property, plant and equipment, net, consisted of the following as of December 31, (in millions):
2012 2011
Land $ 27.5 $ 28.5
Buildings and improvements 368.1 381.0
Machinery and equipment 1,748.6 1,743.4
2,144.2 2,152.9
Accumulated depreciation (1,584.0)(1,601.5)
$ 560.2 $ 551.4
Depreciation expense was $106.7 million, $110.6 million and $118.0 million in 2012, 2011 and 2010, respectively.
FOOTNOTE 7
Goodwill and Other Intangible Assets, Net
A summary of changes in the Company’s goodwill by reportable business segment is as follows for 2012 and 2011 (in millions):
Segment
December 31,
2011
Balance Acquisitions Impairment
Charges (2) Other
Adjustments (1) Foreign
Currency
December 31,
2012
Balance (2)
Home Solutions $ 226.9 $ — $ — $ — $ — $ 226.9
Writing 764.8 — — 0.9 0.8 766.5
Tools 480.3 — — — 1.9 482.2
Commercial Products 387.5 — — — 0.2 387.7
Baby & Parenting 134.0 — — (3.4)(2.6) 128.0
Specialty 372.5 — — 3.2 3.2 378.9
$ 2,366.0 $ — $ — $ 0.7 $ 3.5 $ 2,370.2
Segment
December 31,
2010
Balance Acquisitions Impairment
Charges (2) Other
Adjustments(1) Foreign
Currency
December 31,
2011
Balance
Home Solutions $ 226.9 $ — $ — $ — $ — $ 226.9
Writing 771.8 — — — (7.0) 764.8
Tools 464.6 — — 15.9 (0.2) 480.3
Commercial Products 387.5 — — — — 387.5
Baby & Parenting 435.7 — (305.5) — 3.8 134.0
Specialty 463.0 2.2 (64.7)(25.2)(2.8) 372.5
$ 2,749.5 $ 2.2 $ (370.2) $ (9.3) $ (6.2) $ 2,366.0
(1) The other adjustment for Baby & Parenting in 2012 was due to the settlement of a contingency that was initially recorded in conjunction with the acquisition
of Aprica in 2008. The other adjustment for Specialty for 2011 includes a payment of $10.0 million for contingent payments relating to the Company’s
acquisition of PSI Systems, Inc. (“Endicia”) in 2007. The contingent payments are based on Endicia’s post-acquisition revenues. The other adjustment for
2011 for Specialty also includes the goodwill of the hand torch and solder business that was written off in connection with the sale of the business in 2011.
(2) Cumulative impairment charges relating to goodwill since January 1, 2002 were $1,642.4 million as of December 31, 2012 and 2011. Of this amount,
$538.0 million was included in cumulative effect of accounting change, and $298.9 million was included in discontinued operations.
The Company performs its annual impairment tests of goodwill and indefinite-lived intangibles as of the first day of the Company’s
third quarter because it coincides with the Company’s annual strategic planning process. No impairments were recorded as a result
of the annual impairment tests of goodwill and indefinite-lived intangible assets during 2012. The Company recorded non-cash
impairment charges of $382.6 million in 2011 as a result of its annual impairment tests, principally related to goodwill impairments
in the Company’s Baby & Parenting and Hardware reporting units (included in the Specialty segment). The impairments generally
resulted from declines in sales projections relative to previous estimates due to economic and market factors based in large part
on actual declines in sales in the first six months of 2011, which adversely impacted projected operating margins and net cash