Rayovac 2010 Annual Report Download - page 142

SPECTRUM BRANDS HOLDINGS, 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 9, 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 9, 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 $60,792, net of accumulated amortization of $6,305 at
September 30, 2010 and $62,985, net of accumulated amortization of $515 at September 30, 2009. The Company
trade names subject to amortization relate to the valuation under fresh-start reporting and the Merger with Russell
Hobbs. The carrying value of these trade names was $145,939, net of accumulated amortization of $3,750 at
September 30, 2010 and $490, net of accumulated amortization of $10 at September 30, 2009. Remaining
intangible assets subject to amortization include customer relationship intangibles. The carrying value of
customer relationships was $705,151, net of accumulated amortization of $35,865 at September 30, 2010 and
$708,234, net of accumulated amortization of $2,988 at September 30, 2009. The useful life of the Company’s
intangible assets subject to amortization are 8 years for technology assets related to the Global Pet Supplies
segment, 9 to 11 years for technology assets related to the Small Appliances segment, 17 years for technology
assets associated with the Global Batteries & Personal Care segment, 20 years for customer relationships of
Global Batteries & Personal Care, Home and Garden and Global Pet Supplies, 15 years for Small Appliances
customer relationships, 12 years for a trade name within the Small Appliances segment and 4 years for a trade
name within the Home and Garden segment.
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
Fiscal 2010, the period from October 1, 2008 through August 30, 2009 and Fiscal 2008 the Company conducted
impairment testing of goodwill and indefinite-lived intangible assets. As a result of this testing the Company
recorded non-cash pretax impairment charges of approximately $34,391 and $861,234 in the period from
October 1, 2008 through August 30, 2009 and Fiscal 2008, respectively. The $34,391 recorded during the period
from October 1, 2008 through 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. (See also Note 3(i), Significant Accounting Policies—Intangible Assets,
for further details on the impairment charges).
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 9, Discontinued Operations,
for additional information relating to this impairment charge).
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