Graco 2005 Annual Report Download - page 69

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Home Fashions
Management decided to rationalize certain trademarks and tradenames (brands), primarily in the
United Kingdom home fashions business, in order to focus on promoting more eÅective brands. As a result
of this decision the Company determined that these brands became impaired and accordingly, these
trademarks and tradenames, as well as certain associated patents, were written-oÅ. The impairment charge
associated with this decision was $17.2 million. Additionally, primarily as a result of an increase from the
prior year in the discount rate (risk adjusted rate) used in calculating the enterprises' fair value, an
impairment charge of $8.4 million was recorded on goodwill.
The remaining impairment charge recognized in 2004 represents a write-down to fair value of certain
trademarks and tradenames associated with product lines that the Company planned on exiting.
Tools & Hardware/Other
The impairment charge recorded in the Tools & Hardware and Other segments primarily relates to
patents that the Company chose to allow to expire and Ñxed assets that were held for sale, and
accordingly, were written-down to fair value.
In 2004, the Company began exploring various options for certain businesses and product lines in the
Tools & Hardware segment, including evaluating those businesses for potential sale. As this process
progressed, the Company determined that the businesses had a net book value in excess of their fair value.
Due to the apparent decline in value, the Company conducted an impairment test and recorded an
impairment loss to write-down the net assets of these businesses and product lines to fair value.
2003
The Company recognized an impairment charge of $34.5 million, primarily related to the decision to
exit certain product lines, most of which were in the Cleaning & Organization segment.
FOOTNOTE 19
Other Nonoperating (Income) Expenses
Total other nonoperating (income) expenses consist of the following as of December 31, (in
millions):
2005 2004 2003
Equity earnings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ (0.9) $(0.9) $ Ì
Minority interest ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3.3 2.3 0.4
Currency transaction gain ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (0.3) (1.1) (2.9)
Gain on disposal of Ñxed assetsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (14.6) (1.2) (3.0)
Liquidation of foreign entity(1) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (10.3) Ì Ì
Loss on sale of businesses(2) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 29.7
Gain on debt extinguishment(3)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1.7) (4.4) Ì
Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1.5 2.1 1.4
$(23.0) $(3.2) $25.6
(1) In December 2005, the Company liquidated a foreign subsidiary and terminated a cross currency
interest rate swap that was designated as a hedge of the Company's net investment in the subsidiary.
In connection with these actions, the Company recognized a net gain of $10.3 million in other
income. The cash paid to terminate the swap was reÖected in other in the Company's cash Öow from
operations.
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