Rayovac 2009 Annual Report Download - page 179

Table of Contents
Index to Financial Statements SPECTRUM BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
(A) During the first quarter of Fiscal 2009, the Company reclassified $12,000 of trade names intangible assets not subject to amortization related to the
growing products portion of the Home and Garden Business to intangible assets subject to amortization as such trade names had been assigned a useful
life through the term of the shutdown period. The Company completed the shutdown of the growing products portion of the Home and Garden
Business during the second quarter of Fiscal 2009. (See Note 10, Discontinued Operations, for further details on the shutdown of the growing products
portion of the Home and Garden Business).
(B) During the second quarter of Fiscal 2009, the Company reclassified the growing products portion of the Home and Garden Business to discontinued
operations as the Company completed the shutdown of the business during that period. The Company disposed of all intangible assets related to the
growing products portion of the Home and Garden Business. (See Note 10, Discontinued Operations, for further details on the shutdown of the growing
products portion of the Home and Garden Business).
Intangible assets subject to amortization include proprietary technology, customer relationships and certain trade names. The carrying value of
technology assets was $62,985, net of accumulated amortization of $515 at September 30, 2009 (Successor Company) and $32,120, net of accumulated
amortization of $14,660 at September 30, 2008 (Predecessor Company). The Predecessor Company trade names subject to amortization relate to the United
Industries Corporation (“United”) acquisition. The Successor Company trade names subject to amortization relate to the valuation under fresh−start
reporting. The carrying value of these trade names was $490, net of accumulated amortization of $10 at September 30, 2009 (Successor Company) and
$1,820, net of accumulated amortization of $9,135 at September 30, 2008 (Predecessor Company). Remaining intangible assets subject to amortization
include customer relationship intangibles. The carrying value of customer relationships was $708,234, net of accumulated amortization of $2,988 at
September 30, 2009 (Successor Company) and $147,264, net of accumulated amortization of $58,913 at September 30, 2008 (Predecessor Company). The
useful life of the Successor Company’s intangible assets subject to amortization are as follows; 8 years for technology assets related to the Global Pet
Supplies segment, 17 years for technology assets associated with the Global Batteries and Personal Care segment, 20 years for customer relationships, and 4
years for trade names.
ASC 350 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. During the eleven month period ended August 30, 2009, Fiscal 2008 and Fiscal
2007, the Predecessor Company conducted impairment testing of goodwill and indefinite−lived intangible assets. As a result of this testing the Predecessor
Company recorded non−cash pretax impairment charges of approximately $34,391, $861,234 and $362,452 in the eleven month period ended August 30,
2009, Fiscal 2008 and Fiscal 2007, respectively. The $34,391 recorded during the eleven month period ended August 30, 2009 related to impaired trade
name intangible assets. Of the Fiscal 2008 impairment, approximately $601,934 of the charge related to impaired goodwill and $259,300 related to impaired
trade name intangible assets. Of the Fiscal 2007 impairment, approximately $338,052 of the charge related to impaired goodwill and $24,400 related to
impaired trade name intangible assets. (See also Note 3(i), Significant Accounting Policies—Intangible Assets, for further details on the impairment
charges).
As previously disclosed, the Company has designated the growing products portion of the Home and Garden Business and the Canadian division of
the Home and Garden Business as discontinued operations. In accordance with ASC 360, long−lived assets to be disposed are recorded at the lower of their
carrying value or fair value less costs to sell. During Fiscal 2008, the Company recorded a non−cash pretax charge of $5,700 in discontinued operations to
reduce the carrying value of intangible assets related to the growing products portion of the Home and Garden Business in order to reflect the estimated fair
value of this business. (See also Note 10, Discontinued Operations, for additional information regarding this impairment charge). During Fiscal 2007, the
Company recorded a non−cash pretax charge of approximately $44,507 in discontinued operations to reduce the carrying value of certain assets, principally
consisting of goodwill and intangible assets, related to the Canadian
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