Memorex 2007 Annual Report Download - page 85

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potential of up to an additional $4.0 million consideration over the next three years, contingent on performance of the
business. Upon closing, we received a cash payment of $16.0 million and a note receivable of $1.0 million due in four
years subject to certain post-closing adjustments. A gain of $4.6 million, net of taxes of $2.7 million, was recognized on
the sale. We sold virtually all of the assets of our Specialty Papers business, including the Nekoosa manufacturing plant.
Approximately 90 employees were also transferred as a part of the sale. These operations are presented in our
Consolidated Statements of Operations as discontinued operations for all years presented.
During the second quarter of 2006, we renegotiated the contingent consideration due from Nekoosa Coated Products,
LLC noted above. As a result, on June 16, 2006, we received a cash payment of $2.3 million in full satisfaction of all
future potential payments from Nekoosa Coated Products, LLC, including the outstanding note receivable. This resulted in
an after-tax gain of $1.2 million from discontinued operations.
Other Discontinued Operations Activity. In the fourth quarter of 2004, we recorded the settlement, reached in
February 2005, of the Jazz Photo litigation associated with the Photo Color Systems business we sold in 1999. Pursuant
to the Settlement Agreement, we paid $20.9 million in 2005 to Jazz Photo in exchange for a complete release of all claims
by Jazz Photo (see Note 18 for further information).
The results of discontinued operations for the years ended December 31, 2006 and 2005 were as follows:
2006 2005
Years Ended December 31,
(In millions)
Net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $20.1
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2.4
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 0.9
Income from operations of discontinued businesses, net of income tax . . . . . . . . . . . . — 1.5
Gain from disposal of discontinued businesses, net of income tax . . . . . . . . . . . . . . . . 1.2 4.6
Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.2 $ 6.1
Note 5 — Supplemental Balance Sheet Information
2007 2006
As of December 31,
(In millions)
Inventories, net
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 308.7 $ 217.6
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.7 19.6
Raw materials and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.7 20.8
Total inventories, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 366.1 $ 258.0
Other Current Assets
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 53.1 $ 26.0
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.8 32.3
Total other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 109.9 $ 58.3
Property, Plant and Equipment
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10.4 $ 1.7
Buildings and leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160.8 148.3
Machinery and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370.3 478.5
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 6.2
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 542.6 $ 634.7
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (371.1) (456.7)
Property, plant and equipment, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 171.5 $ 178.0
56
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)