Graco 2012 Annual Report Download - page 35

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The Company recognized income tax expense of $17.9 million and $5.6 million for 2011 and 2010, respectively. The change in
the income tax expense was primarily attributable to the $382.6 million of impairment charges in 2011, which were only partially
deductible, and $218.6 million of losses related to extinguishments of debt in 2010, which were fully deductible. The change in
the income tax expense was also attributable to the recognition of income tax benefits of $49.0 million in 2011 due to the reversal
of accruals for certain tax contingencies, including interest and penalties, upon the expiration of various worldwide statutes of
limitation, and the recognition of $63.6 million of previously unrecognized tax benefits in 2010 as a result of the Company entering
into a binding closing agreement related to its 2005 and 2006 U.S. Federal income tax examination, including all issues that were
at the IRS Appeals Office.
The net loss from discontinued operations was $9.4 million for 2011 compared to net income from discontinued operations of
$4.6 million for 2010. The loss on disposal of discontinued operations for 2011 was $15.2 million, after tax, related to the disposal
of the hand torch and solder business. See Footnote 2 of the Notes to Consolidated Financial Statements for further information.
Business Segment Operating Results:
2012 vs. 2011 Business Segment Operating Results
Net sales by segment were as follows for the years ended December 31, (in millions, except percentages):
2012 2011 % Change
Home Solutions $ 1,644.0 $ 1,710.2 (3.9)%
Writing 1,416.2 1,399.3 1.2
Tools 806.1 779.6 3.4
Commercial Products 759.7 741.5 2.5
Baby & Parenting 736.1 680.4 8.2
Specialty 540.6 553.6 (2.3)
Total net sales $ 5,902.7 $ 5,864.6 0.6
The following table sets forth an analysis of changes in net sales in each segment for 2012 as compared to 2011:
Home
Solutions Writing Tools Commercial Products Baby & Parenting Specialty
Core sales (3.6)% 3.2% 7.0% 3.6% 9.8% (0.4)%
Foreign currency (0.3) (2.0)(3.6)(1.1)(1.6) (1.9)
Total change in net sales (3.9)% 1.2% 3.4% 2.5% 8.2% (2.3)%
Operating income (loss) by segment was as follows for the years ended December 31, (in millions, except percentages):
2012 2011 % Change
Home Solutions(1) $ 217.5 $ 228.9 (5.0)%
Writing(1) 261.9 246.9 6.1
Tools 109.8 119.1 (7.8)
Commercial Products 92.9 108.3 (14.2)
Baby & Parenting 72.7 51.6 40.9
Specialty 68.2 60.2 13.3
Impairment charges — (382.6) NMF
Restructuring costs (56.1)(50.1) (12.0)
Corporate(2) (115.0)(125.1) 8.1
Total operating income $ 651.9 $ 257.2 NMF
NMF - Not meaningful
(1) For 2012, includes restructuring-related costs associated with Project Renewal of $4.9 million and $1.2 million attributable to the
Home Solutions and Writing segments, respectively.
(2) Includes restructuring-related costs of $24.3 million and $37.4 million for 2012 and 2011, respectively, associated with the European
Transformation Plan and $4.1 million of restructuring-related costs associated with Project Renewal for 2012. The 2011 operating
income also includes $6.3 million of incremental costs associated with the Company’s Chief Executive Officer transition in 2011.