Graco 2007 Annual Report Download - page 38

Newell Rubbermaid Inc. 2007 Annual Report
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In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160, “Noncontrolling Interests in Consolidated Financial Statements —
An Amendment of ARB No. 51” (“SFAS 160”). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by
parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s
ownership interest and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes
reporting requirements that require sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the
noncontrolling owners. SFAS 160 is effective for fiscal years beginning on or after December 15, 2008 and earlier adoption is prohibited. SFAS 160 is
effective for the Company on January 1, 2009. The Company is still in the process of evaluating the impact SFAS 160 will have on the Company’s
consolidated financial statements.
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157
defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and requires expanded disclosures
about fair value measurements. SFAS 157 emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and states that
a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. SFAS 157
applies under other accounting pronouncements that require or permit fair value measurements, the FASB having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute. Accordingly, SFAS 157 does not require any new fair value measurements. In February
2008, the FASB issued Staff Positions 157-1 and 157-2 which remove certain leasing transactions from the scope of SFAS 157 and partially defer the effective
date of SFAS 157 for one year for certain nonfinancial assets and liabilities. SFAS 157 is effective for fiscal years beginning after November 15, 2007. The
Company prospectively adopted the effective provisions of SFAS 157 on January 1, 2008. The adoption is not expected to have a material impact on the
Company’s consolidated financial statements.
INTERNATIONAL OPERATIONS
For the years ended December 31, 2007, 2006 and 2005, the Company’s non-U.S. businesses accounted for approximately 28%, 26% and 24% of net sales,
respectively (see Footnote 18 of the Notes to Consolidated Financial Statements). Changes in both U.S. and non-U.S. net sales are shown below for the year
ended December 31, (in millions, except percentages):
2007 vs. 2006 2006 vs. 2005
2007 2006 2005 % Change % Change
U.S. $4,624.3 $4,603.4 $4,338.5 0.5% 6.1%
Non-U.S 1,783.0 1,597.6 1,378.7 11.6 15.9
$6,407.3 $6,201.0 $5,717.2 3.3% 8.5%
Foreign operations, especially in Europe, but also in Asia, Central and South America and Canada, are important to the Company’s business. The Company
is expanding from a U.S.-centric business model to one that includes international growth as an increasing focus. In addition, as the Company increasingly
sources products in low-cost countries, particularly in the Far East, it is exposed to additional risks and uncertainties, nationalization, exchange controls,
interest rates, limitations on foreign investment in local business and other political, economic and regulatory risks and difficulties. The Company also faces
risks due to the transportation and logistical complexities inherent in increased reliance on foreign sourcing.
FORWARD-LOOKING STATEMENTS
Forward-looking statements in this Report are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements may relate to, but are not limited to, information or assumptions about the effects of Project Acceleration, sales (including pricing),
income/(loss), earnings per share, operating income or gross margin improvements, return on equity, return on invested capital, capital expenditures, working
capital, cash flow, dividends, capital structure, debt to capitalization ratios, interest rates, internal growth rates, restructuring, impairment and other charges,
potential losses on divestitures, impact of changes in accounting standards, pending legal proceedings and claims (including environmental matters), future
economic performance, costs and cost savings (including raw material inflation, productivity and streamlining), synergies, management’s plans, goals and
objectives for future operations, performance and growth or the assumptions relating to any of the forward-looking statements. These statements generally are
accompanied by words such as “intend,” “anticipate,” “believe,” “estimate,” “project,” “target,” “plan,” “expect,” “will,” “should,” “would” or similar statements.
The Company cautions that forward-looking statements are not guarantees because there are inherent difficulties in predicting future results. Actual results could
differ materially from those expressed or implied in the forward-looking statements. Factors that could cause actual results to differ include, but are not limited to,
those matters set forth in the Company’s 2007 Annual Report on Form 10-K, filed with the Securities and Exchange Commission. Some of these factors are described
as criteria for success. The Company’s failure to achieve, or limited success in achieving, these objectives could result in actual results differing materially from
those expressed or implied in the forward-looking statements. In addition, there can be no assurance that the Company has correctly identified and assessed all of
the factors affecting the Company or that the publicly available and other information the Company receives with respect to these factors is complete or correct.