Graco 2010 Annual Report Download - page 68

Newell Rubbermaid Inc. 2010 Annual Report
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64 NEWELL RUBBERMAID 2010 Annual Report
FOOTNOTE 12
COMMITMENTS
Lease Commitments
The Company leases manufacturing, warehouse and other facilities, real estate, transportation, and data processing and other
equipment under leases that expire at various dates through the year 2020. Rent expense, which is recognized on a straight-line
basis over the life of the lease term, was $122.7 million, $120.2 million and $129.2 million in 2010, 2009 and 2008, respectively.
Future minimum rental payments for operating leases with initial or remaining terms in excess of one year are as follows as
of December 31, 2010 (in millions):
2011 2012 2013 2014 2015 Thereafter Total
$97.2 $80.5 $59.6 $48.0 $41.4 $87.9 $414.6
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.
As of December 31, 2010, the Company’s future estimated total purchase obligations are as follows (in millions):
2011 2012 2013 Total
$511.0 $64.6 $66.6 $642.2
FOOTNOTE 13
EMPLOYEE BENEFIT AND RETIREMENT PLANS
The Company and its subsidiaries have noncontributory pension, profit sharing and contributory 401(k) plans covering
substantially all of their international 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 AOCI at December 31, 2010 is $662.5 million ($425.4 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 $17.0 million ($10.4 million net of tax) of costs in 2011 associated with net actuarial losses and prior service credit.
Effective January 1, 2008, the Company prospectively adopted updated authoritative guidance applicable to the measurement
date provisions for defined benefit plans, which requires the measurement date for defined benefit plan assets and obligations
to coincide with the date of the employer’s fiscal year-end balance sheets, which for the Company is December 31. The Company
had historically measured defined benefit plan assets and liabilities for the majority of its plans on September 30 for its year-end
Consolidated Balance Sheets. 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 and an after-tax benefit to AOCI of $0.7 million.
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 $17.9 million, $17.3 million and $19.4 million in expense for the
defined contribution benefit arrangement for 2010, 2009 and 2008, respectively. The liability associated with the defined
contribution benefit arrangement as of December 31, 2010 and 2009 is $17.9 million and $17.3 million, respectively, and is included
in other accrued liabilities in the Consolidated Balance Sheets.
As of December 31, 2010 and 2009, the Company maintained various non-qualified deferred compensation plans with varying
terms. The total liability associated with these plans was $70.8 million and $69.8 million as of December 31, 2010 and 2009,
respectively. These liabilities are included in other noncurrent liabilities in the Consolidated Balance Sheets. These plans are
partially funded with asset balances of $51.8 million and $46.2 million as of December 31, 2010 and 2009, respectively. These
assets are included in other assets in the Consolidated Balance Sheets.
The Company has a Supplemental Executive Retirement Plan (“SERP”), which is a nonqualified defined benefit plan pursuant
to which the Company will pay supplemental pension benefits to certain key employees upon retirement based upon the
employees’ years of service and compensation. The SERP is partially funded through a trust agreement with the Northern Trust
Company, as trustee, that owns life insurance policies on approximately 350 active and former key employees with aggregate
net death benefits of $302.3 million. At December 31, 2010 and 2009, the life insurance contracts had a cash surrender value of
$99.8 million and $97.1 million, respectively. The SERP is also partially funded through cash and mutual fund investments, which
had a combined value of $15.3 million and $14.5 million at December 31, 2010 and 2009, respectively. These assets, as well as the
cash surrender value of the life insurance contracts, are included in other assets in the Consolidated Balance Sheets. The projected
benefit obligation was $110.5 million and $98.7 million at December 31, 2010 and 2009, respectively. The SERP liabilities are
included in the pension table below; however, the value of the Company’s investments in the life insurance contracts, cash and
mutual funds are excluded from the table as they do not qualify as plan assets under the relevant authoritative guidance.