Graco 2008 Annual Report Download - page 36

Newell Rubbermaid Inc. 2008 Annual Report
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In June 2008, the FASB issued Staff Position EITF 03-06-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities” (“FSP EITF 03-06-1”). This Staff Position provides that unvested share-based payment awards that contain nonforfeitable rights
to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share
pursuant to the two-class method in SFAS No. 128, “Earnings per Share.” FSP EITF 03-06-1 is effective for fiscal years beginning after December 15, 2008
and interim periods within those years and requires all prior-period earnings per share data to be adjusted retrospectively. FSP EITF 03-06-1 is effective for
the Company on January 1, 2009. The adoption of FSP EITF 03-06-1 is not expected to have a material impact on the Company’s financial statements.
In November 2008, the FASB ratified Emerging Issues Task Force Issue No. 08-7, “Accounting for Defensive Intangible Assets” (“EITF 08-7”). EITF 08-7
clarifies the accounting for certain separately identifiable intangible assets which an acquirer does not intend to actively use but intends to hold to prevent
its competitors from obtaining access to them. EITF 08-7 requires an acquirer in a business combination to account for a defensive intangible asset as a
separate unit of accounting which should be amortized to expense over the period the asset diminishes in value. EITF 08-7 is effective for fiscal years
beginning after December 15, 2008. The Company prospectively adopted EITF 08-7 on January 1, 2009. The adoption of EITF 08-7 could have a material
effect on the way the Company accounts for acquired intangible assets.
In December 2008, the FASB issued Staff Position No. 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (“FSP SFAS
132(R)-1”). FSP SFAS 132(R)-1 amends SFAS No. 132 (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits—
an amendment of FASB Statements No. 87, 88, and 106” (“SFAS 132(R)”), to require additional disclosures about assets held in an employer’s defined
benefit pension or other postretirement plan using the guidance in SFAS 157. FSP SFAS 132(R)-1 also amends SFAS 157 to clarify that defined benefit
pension or other postretirement plan assets are not subject to disclosure requirements under SFAS 157. FSP SFAS 132(R)-1 is effective for fiscal years
ending after December 15, 2009, with early adoption permitted. The adoption of FSP SFAS 132(R)-1 is not expected to have a material impact on the
Company’s financial statements.
INTERNATIONAL OPERATIONS
For the years ended December 31, 2008, 2007 and 2006, the Company’s non-U.S. businesses accounted for approximately 31%, 28% and 26% 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):
2008 vs. 2007 2007 vs. 2006
2008 2007 2006 % Change % Change
U.S. $4,447.2 $4,624.3 $4,603.4 (3.8)% 0.5%
Non-U.S 2,023.4 1,783.0 1,597.6 13.5 11.6
$6,470.6 $6,407.3 $6,201.0 1.0)% 3.3%
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 sales (including pricing), income/(loss),
earnings per share, operating income or gross margin improvements or declines, Project Acceleration, capital and other expenditures, working capital, cash
flow, dividends, capital structure, debt to capitalization ratios, availability of financing, interest 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 and sourced product 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. Important factors that could cause actual
results to differ materially from those suggested by the forward-looking statements include, but are not limited to, the Company’s dependence on the
strength of retail economies in light of the global economic slowdown; currency fluctuations; competition with other manufacturers and distributors of
consumer products; major retailers’ strong bargaining power; changes in the prices of raw materials and sourced products and the Company’s ability to
obtain raw materials and sourced products in a timely manner from suppliers; the Company’s ability to develop innovative new products and to develop,
maintain and strengthen its end-user brands; the Company’s ability to expeditiously close facilities and move operations while managing foreign regulations
and other impediments; the Company’s ability to manage successfully risks associated with divesting or discontinuing businesses and product lines; the
Company’s ability to implement successfully information technology solutions throughout its organization; the Company’s ability to improve productivity and
streamline operations; the Company’s ability to refinance short term debt on terms acceptable to it particularly given the recent turmoil and uncertainty
in the global credit markets; changes to the Company’s credit ratings; increases in the funding obligations related to the Company’s pension plans due to
declining asset values or otherwise; the imposition of tax liabilities greater than the Company’s provisions for such matters; the risks inherent in the
Company’s foreign operations and those matters set forth in this Report generally and Item 1A to this Report. 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.