Rayovac 2013 Annual Report Download - page 135

SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(Amounts in thousands, except per share figures)
Preliminary Valuation of Assets and Liabilities
The preliminary fair values of the net tangible and intangible assets acquired and liabilities assumed in
connection with the purchase of the HHI Business, excluding TLM Taiwan, have been recognized in the
Consolidated Statement of Financial Position based upon their preliminary values at December 17, 2012. The
preliminary fair values of the net tangible and intangible assets acquired and liabilities assumed in connection
with the TLM Taiwan purchase have been recognized in the Consolidated Statement of Financial Position based
upon their preliminary values at April 8, 2013. The excess of the purchase price over the preliminary fair values
of the net tangible and intangible assets was recorded as goodwill, and includes value associated with greater
product diversity, stronger relationships with core retail partners, cross-selling opportunities in all channels and a
new platform for potential future global growth using the Company’s existing international infrastructure, most
notably in Europe. The majority of goodwill recorded is not expected to be deductible for income tax purposes.
The preliminary fair values recorded were based upon a preliminary valuation and the estimates and assumptions
used in such valuation are subject to change, which could be significant, within the measurement period (up to
one year from the acquisition date). The primary areas of the preliminary valuation that are not yet finalized
relate to the fair values of amounts for income taxes including deferred tax accounts, amounts for uncertain tax
positions and net operating loss carryforwards inclusive of associated limitations and valuation allowances and
the final amount of residual goodwill. Additionally, finalized fair values associated with deferred tax accounts
could have a material effect on the Company’s estimated reversal of its consolidated U.S. valuation allowances
against deferred tax assets recognized during the measurement period. See Note 9, “Income Taxes,” for further
information. The Company expects to continue to obtain information to assist it in determining the fair values of
the net assets acquired at the acquisition date during the measurement period. The preliminary valuation of the
assets acquired and liabilities assumed for the HHI Business, including a reconciliation to the preliminary
valuation reported as of December 30, 2012, is as follows:
HHI Business
Preliminary
Valuation
December 30,
2012
TLM Taiwan
Preliminary
Valuation
June 30,
2013
Adjustments /
reclassifications
Preliminary
Valuation
September 30,
2013
Cash ........................................ $ 17,406 843 $ 5,836 $ 24,085
Accounts receivable ........................... 104,641 11 4,007 108,659
Inventory .................................... 207,160 1,135 62 208,357
Prepaid expenses and other ...................... 13,311 2,148 (6,176) 9,283
Property, plant and equipment ................... 104,502 36,750 (2,861) 138,391
Intangible assets .............................. 470,000 17,100 2,000 489,100
Other long-term assets ......................... 3,051 124 4,339 7,514
Total assets acquired ....................... $ 920,071 $58,111 $ 7,207 $ 985,389
Accounts payable ............................. 130,140 — 7,967 138,107
Deferred tax liability—current ................... 7,081 — 83 7,164
Accrued liabilities ............................. 37,530 241 4,966 42,737
Deferred tax liability—long-term ................. 104,708 1,930 9,791 116,429
Other long-term liabilities ....................... 11,231 8,089 453 19,773
Total liabilities assumed .................... $ 290,690 $10,260 $ 23,260 $ 324,210
Total identifiable net assets ...................... 629,381 47,851 (16,053) 661,179
Noncontrolling interest ......................... (2,235) — (1,704) (3,939)
Goodwill .................................... 662,116 45,649 10,088 717,853
Total net assets ........................... $1,289,262 $93,500 $ (7,669) $1,375,093
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