Rayovac 2008 Annual Report Download - page 58

Table of Contents
Index to Financial Statements
in Fiscal 2007 and Fiscal 2006, respectively, in connection with the integration of the United home and garden business. We have recorded pretax restructuring
and related charges of approximately $31 million since the inception of this initiative.
Integration activities within Global Pet Supplies were substantially complete as of September 30, 2007. Global Pet Supplies integration activities consisted
primarily of the rationalization of manufacturing facilities and the optimization of our distribution network. As a result of these integration initiatives, two pet
supplies facilities were closed in 2005, one in Brea, California and the other in Hazleton, Pennsylvania, one pet supply facility was closed in 2006, in Hauppauge,
New York and one pet supply facility was closed in 2007 in Moorpark, California. We recorded approximately $22 million and $9 million of pretax restructuring
and related charges during Fiscal 2007 and Fiscal 2006, respectively, primarily in connection with our integration activities within Global Pet Supplies. We have
recorded pretax restructuring and related charges of approximately $35 million since the inception of the integration activities within Global Pet Supplies.
In connection with the European Initiatives, which are substantially complete, we implemented a series of initiatives within the Global Batteries &
Personal Care segment in Europe to reduce operating costs and rationalize our manufacturing structure. These initiatives include the relocation of certain
operations at our Ellwangen, Germany packaging center to the Dischingen, Germany battery plant, transferring private label battery production at our
Dischingen, Germany battery plant to our manufacturing facility in China and restructuring Europe’s sales, marketing and support functions. We recorded
approximately $7 million and $21 million of pretax restructuring and related charges during Fiscal 2007 and Fiscal 2006, respectively, in connection with the
European Initiatives. We have recorded pretax restructuring and related charges of approximately $27 million since the inception of the European Initiatives.
In connection with the Latin American Initiatives, which are substantially complete, we implemented a series of initiatives within the Global Batteries &
Personal Care segment in Latin America to reduce operating costs. The initiatives include the reduction of certain manufacturing operations in Brazil and the
restructuring of management, sales, marketing and support functions. We recorded approximately $11 million of pretax restructuring and related charges during
Fiscal 2007 in connection with the Latin American Initiatives. We have recorded pretax restructuring and related charges of approximately $11 million since the
inception of the Latin American Initiatives.
In Fiscal 2007, we began managing our business in three vertically integrated, product-focused reporting segments; Global Batteries & Personal Care,
Global Pet Supplies and the Home and Garden Business. As part of this realignment, our global operations organization, which had previously been included in
corporate expense, consisting of research and development, manufacturing management, global purchasing, quality operations and inbound supply chain, is now
included in each of the operating segments. See also Note 13, Segment Results, of Notes to Consolidated Financial Statements included in this Annual Report on
Form 10-K for additional discussion on the realignment of our operating segments. In connection with the Global Realignment Initiatives, we recorded
approximately $53 million of pretax restructuring and related charges during Fiscal 2007 in connection with the Global Realignment Initiatives. Costs associated
with these initiatives, which are expected to be incurred through December 31, 2008, relate primarily to severance and are projected at approximately $85
million.
Goodwill and Intangibles Impairment. SFAS 142 requires companies to test goodwill and indefinite-lived intangible assets for impairment annually, or
more often if an event or circumstance indicates that an impairment loss may have been incurred. In Fiscal 2007 and 2006, we tested our goodwill and
indefinite-lived intangible assets. As a result of this testing, we recorded a non-cash pretax impairment charge of $362 million and $433 million in Fiscal 2007
and 2006, respectively. The $362 million impairment charge incurred in Fiscal 2007 reflects goodwill associated with our U.S. Home and Garden Business and
our North America reporting unit, which is included as part of our Global Batteries & Personal Care reportable segment, coupled with an impairment of trade
name intangible assets primarily associated with our Global Batteries & Personal Care business segment.
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Source: Spectrum Brands, Inc, 10-K, December 10, 2008