Rayovac 2006 Annual Report Download - page 97

SPECTRUM BRANDS | 2006 ANNUAL REPORT 85
(11) Discontinued Operations
On January 25, 2006, the Company sold its fertilizer technol-
ogy and Canadian professional fertilizer products businesses of
Nu-Gro Pro and Tech to Agrium Inc. Proceeds from the sale were
used to reduce outstanding debt. The sale included two divisions
of Spectrum Brands’ Nu-Gro subsidiary, representing fi scal 2005
revenue of approximately $80,000 from sales of high-end spe-
cialty controlled-release nitrogen fertilizer and other products to
professional turf markets and specialty wholesale fertilizer cus-
tomers. As part of the transaction, the Company signed strategic
multi-year reciprocal supply agreements with Agrium. Proceeds
from the sale totaled approximately $83,000 after selling
expenses and contractual working capital adjustments which
were fi nalized on October 30, 2006.
Effective October 1, 2005, the Company refl ected the opera-
tions of Nu-Gro Pro and Tech as discontinued operations. Therefore,
the presentation herein of the results of continuing operations has
been changed to exclude Nu-Gro Pro and Tech for all periods pre-
sented. The Company discontinued these operations as part of the
United integration initiatives. See Note 16, Restructuring and
Related Charges, for additional discussion of United integration
initiatives. The following amounts have been segregated from con-
tinuing operations and are refl ected as discontinued operations for
the years ended September 30, 2006 and 2005, respectively:
2006(A) 2005
Net sales $16,314 $52,293
(Loss) income from discontinued
operations before income taxes $ (6,388) $ 8,407
Provision for income taxes 868 (2,938)
(Loss) income from discontinued
operations (including loss on disposal
of $3,901 in 2006), net of tax $ (5,520) $ 5,469
(A) Represents results for the discontinued operations for October 2005 through
January 2006.
The Company has refl ected Remington’s United States and
United Kingdom Service Centers as discontinued operations.
The Company discontinued operations at these Service Centers
during 2004 as part of the Remington integration initiatives. See
Note 16, Restructuring and Related Charges, for additional dis-
cussion of Remington integration initiatives. The following
amounts have been segregated from continuing operations and
are refl ected as discontinued operations for the year ended
September 30, 2004:
2004
Net sales $21,470
Loss from discontinued operations
before income taxes $ (778)
Provision for income tax benefits 398
Loss from discontinued operations, net of tax $ (380)
(12) Employee Benefit Plans
Pension Benefits
The Company has various defi ned benefi t pension plans cov-
ering some of its employees in the United States and certain
employees in other countries, primarily the United Kingdom
and Germany. Plans generally provide benefi ts of stated amounts
for each year of service. The Company funds its U.S. pension
plans at a level to maintain, within established guidelines, the
IRS-defi ned 90% current liability funded status. At January 1,
2006, the date of the most recent calculation, all U.S. funded
defi ned benefi t pension plans refl ected a current liability funded
status equal to or greater than 90%. Additionally, in compliance
with the Company’s funding policy, annual contributions to non-
U.S. defi ned benefi t plans are equal to the actuarial recommen-
dations or statutory requirements in the respective countries.
The Company also sponsors or participates in a number of
other non-U.S. pension arrangements, including various retire-
ment and termination benefi t plans, some of which are covered
by local law or coordinated with government-sponsored plans,
which are not signifi cant in the aggregate and therefore are not
included in the information presented below.
The Company also has various nonqualifi ed deferred com-
pensation agreements with certain of its employees. Under cer-
tain of these agreements, the Company has agreed to pay certain
amounts annually for the fi rst 15 years subsequent to retirement
or to a designated benefi ciary upon death. It is management’s
intent that life insurance contracts owned by the Company will
fund these agreements. Under the remaining agreements, the
Company has agreed to pay such deferred amounts in up to 15
annual installments beginning on a date specifi ed by the employee,
subsequent to retirement or disability, or to a designated benefi -
ciary upon death.
Other Benefits
The Company provides certain health care and life insurance
benefi ts to eligible retired employees. Participants earn retiree
health care benefi ts after reaching age 45 over the next ten suc-
ceeding years of service and remain eligible until reaching age
65. The plan is contributory; retiree contributions have been
established as a fl at dollar amount with contribution rates
expected to increase at the active medical trend rate. The plan is
unfunded. The Company is amortizing the transition obligation
over a 20-year period.
2006 Form 10-K Annual Report
Spectrum Brands, Inc.