Graco 2008 Annual Report Download - page 60

Newell Rubbermaid Inc. 2008 Annual Report
58
Purchase Obligations
The Company enters into certain obligations to purchase finished goods, raw materials, components and services pursuant to legally enforceable and
binding obligations, which include all significant terms. The Company’s purchase obligations for 2009 include a commitment to purchase the minority
interest of a majority owned subsidiary for approximately $30.0 million, which is included in the purchase obligations amount shown in the table below.
As of December 31, 2008, the Company’s future estimated total purchase obligations are as follows (in millions):
2009 2010 2011 Total
$237.4 $9.0 $2.3 $248.7
FOOTNOTE 12
EMPLOYEE BENEFIT AND RETIREMENT PLANS
Effective January 1, 2008, the Company prospectively adopted the measurement date provisions of SFAS 158. Beginning with the year ended December 31,
2008, SFAS 158 requires the measurement date for defined benefit plan assets and obligations to coincide with the date of the employer’s fiscal year end
statement of financial position, which for the Company is December 31. The Company has historically measured defined benefit plan assets and liabilities
for the majority of its plans on September 30 for its year-end statement of financial position. The impact on the Consolidated Financial Statements of the
adoption of the change in measurement date for the Company’s defined benefit and postretirement plans with September 30 plan year-ends resulted in an
adjustment to decrease retained earnings at January 1, 2008 by $1.1 million. The following table shows the components of the Company’s adjustment to
retained earnings and other comprehensive income (loss) on January 1, 2008 upon adoption of the measurement date provisions of SFAS 158:
International Other
U.S. Pension Plans Pension Plans Postretirement Plans Total
Retained Earnings:
Service costs $ — $ 0.5 $ 0.4 $ 0.9
Interest costs 11.8 1.5 2.4 15.7
Expected return on assets (14.4) (1.6) — (16.0)
Amortization of:
Actuarial loss 1.7 — — 1.7
Prior service credit — — (0.6) (0.6)
Total pre-tax (benefit) charge (0.9) 0.4 2.2 1.7
Tax impact 0.3 (0.1) (0.8) (0.6)
Net (benefit) charge to retained earnings $ (0.6) $ 0.3 $ 1.4 $ 1.1
Other Comprehensive Loss:
Amortization of:
Actuarial loss $ (1.7) — $ — $ (1.7)
Prior service credit — — 0.6 0.6
Total pre-tax (benefit) charge (1.7) — 0.6 (1.1)
Tax impact 0.6 — (0.2) 0.4
Net (benefit) charge to other comprehensive loss $ (1.1) — $ 0.4 $ (0.7)
The Company and its subsidiaries have noncontributory pension, profit sharing and contributory 401(k) plans covering substantially all of their foreign
and domestic employees. Plan benefits are generally based on years of service and/or compensation. The Company’s funding policy is to contribute not less
than the minimum amounts required by the Employee Retirement Income Security Act of 1974, as amended, the Internal Revenue Code of 1986, as amended,
or foreign statutes to assure that plan assets will be adequate to provide retirement benefits.
Included in accumulated other comprehensive loss at December 31, 2008 is $498.4 million ($309.1 million net of tax) related to net unrecognized
actuarial losses and unrecognized prior service credit that have not yet been recognized in net periodic pension cost. The Company expects to recognize
$7.4 million ($4.8 million net of tax) of costs in 2009 associated with net actuarial losses and prior service credit.
The Company’s tax-qualified defined benefit pension plan is frozen for the entire non-union U.S. work force, and the Company has replaced the defined
benefit pension plan with an additional defined contribution benefit. The defined contribution benefit has a three year cliff-vesting schedule. The Company
recorded $19.4 million, $19.9 million and $19.6 million in expense for the defined contribution benefit arrangement for the years ended December 31, 2008,
2007 and 2006, respectively. The liability associated with the defined contribution benefit arrangement as of December 31, 2008 and 2007 is $19.4 million
and $19.9 million, respectively, and is included in other accrued liabilities on the Consolidated Balance Sheets.
As of December 31, 2008 and 2007, the Company maintained various non-qualified deferred compensation plans with varying terms. The total liability
associated with these plans was $69.3 million and $77.8 million as of December 31, 2008 and 2007, respectively. These liabilities are included in other
noncurrent liabilities in the Consolidated Balance Sheets. These plans are partially funded with asset balances of $41.4 million and $44.1 million as of
December 31, 2008 and 2007, respectively. These assets are included in other assets in the Consolidated Balance Sheets.