Graco 2007 Annual Report Download - page 54

Newell Rubbermaid Inc. 2007 Annual Report
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FOOTNOTE 3
Discontinued Operations
The following table summarizes the results of businesses reported as discontinued operations for the years ended December 31, (in millions):
2007 2006 2005
Net sales $ 3.6 $508.5 $ 798.2
Loss from operations of discontinued operations, net of income tax expense
of $- million, $8.6 million and $5.7 million for 2007, 2006 and 2005, respectively $ (0.2) $ (86.4) $ (58.2)
(Loss) gain on disposal of discontinued operations, net of income tax benefit (expense)
of $3.0 million, ($6.5) million and $- million for 2007, 2006 and 2005, respectively (11.9) 0.7 (96.8)
Loss from discontinued operations, net of tax $(12.1) $ (85.7) $(155.0)
No amounts related to interest expense have been allocated to discontinued operations.
As of December 31, 2006, the assets and liabilities of the discontinued operations consist of the remaining portions of the Home Décor Europe
business. The following table presents summarized balance sheet information of the remaining portions of the Home Décor Europe business as of
December 31, 2006 (in millions):
Accounts receivable, net $35.8
Inventories, net 18.8
Prepaid expenses and other 1.0
Property, plant and equipment, net 12.5
Total Assets $68.1
Accounts payable $11.6
Accrued compensation 4.1
Other accrued liabilities 15.3
Other noncurrent liabilities 5.1
Total Liabilities $36.1
Home Décor Europe
The Home Décor Europe business designed, manufactured and sold drapery hardware and window treatments in Europe under Gardinia® and other local brands
and was previously classified in the Company’s former Home Fashions segment. In 2005, Home Décor Europe had net sales of approximately $377 million.
In the first quarter of 2006, as a result of a revised corporate strategy and an initiative to improve the Company’s portfolio of businesses to focus
on those that are best aligned with the Company’s strategies of differentiated products, best cost and consumer branding, the Company began exploring
various options for its Home Décor Europe business. Those options included marketing the business for potential sale. As a result of this effort, the
Company received a preliminary offer from a potential buyer which gave the Company a better indication of the business’ fair value. Based on this offer,
the Company determined that the business had a net book value in excess of its fair value. Due to the apparent decline in value, the Company conducted
an impairment test and recorded a $50.9 million impairment charge in the first quarter of 2006. This charge, as well as the operations of this business
during 2006 and 2005, are included in the loss from operations of discontinued operations in the table above.
In September 2006, the Company entered into an agreement for the intended sale of portions of the Home Décor Europe business to a global
manufacturer and marketer of window treatments and furnishings. The Central and Eastern European, Nordic and Portuguese operations of this
business were sold on December 1, 2006. The sale of the operations in Poland and the Ukraine closed on February 1, 2007.
In October 2006, the Company received a binding offer for the intended sale of the Southern European region of the Home Décor Europe business
to another party, which represented the remaining operations of the Home Décor Europe business. The sale of operations in France and Spain closed on
January 1, 2007 and in Italy on January 31, 2007.
In connection with these transactions, the Company recorded a loss of $11.3 million, net of tax, in 2006. In 2007, the Company recorded a loss of
$10.0 million, net of tax, to complete the divestiture of Home Décor Europe. The net loss for 2007 and 2006 are reported in the table above as part of the
gain (loss) on disposal of discontinued operations.