Nautilus 2013 Annual Report Download - page 45

Related Party Transactions
In September 2010 , we entered into an agreement to borrow $5.0 million
from certain entities under common control of Sherborne Investors
GP, LLC and its affiliates (collectively “Sherborne”).
At the time, Sherborne was our largest shareholder and was controlled by Edward J.
Bramson, our former Chairman and Chief Executive Officer, and Craig L. McKibben, a former member of our Board of Directors. We incurred
interest expense of $0.4 million and $0.1 million
with respect to such debt in 2011 and 2010, respectively. We repaid all amounts outstanding
with respect to such debt in March 2012 and, accordingly, both the outstanding principal balance and amount of accrued interest expense as of
December 31, 2013 and 2012 were zero .
New Accounting Pronouncements
ASU 2013
-02
In February 2013, the FASB issued ASU No. 2013-02, “
Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive
Income.” Under ASU 2013-
02, an entity is required to provide information about the amounts reclassified out of Accumulated Other
Comprehensive Income (“AOCI”)
by component. In addition, an entity is required to present, either on the face of the financial statements or in
the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required
to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income,
an entity is required to cross-reference to other disclosures that provide additional details about those amounts. The adoption of ASU 2013-
02 in
January 2013 did not have any impact on our financial position, results of operations or cash flows.
ASU 2013
-11
In July 2013, the FASB issued ASU No. 2013-11, “
Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a
Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-
11 amends the guidance related to the presentation of unrecognized tax
benefits and allows for the reduction of a deferred tax asset for a net operating loss (“NOL”)
carryforward whenever the NOL or tax credit
carryforward would be available to reduce the additional taxable income or tax due if the tax position is disallowed. ASU 2013-
11 is effective
for annual and interim periods for fiscal years beginning after December 15, 2013, and early adoption is permitted. Since ASU 2013-
11 relates
only to the presentation of unrecognized tax benefits, we do not expect our adoption of ASU 2013-
11 in January 2014 will have a material effect
on our financial position, results of operations or cash flows.
(2) DISCONTINUED OPERATIONS
On September 25, 2009, in light of continuing operating losses in our Commercial business and in order to focus exclusively on managing our
Direct and Retail businesses, we committed to a plan for the complete divestiture of our Commercial business, which qualified for held-for-
sale
accounting treatment. The Commercial business is presented as Discontinued Operations in our Condensed Consolidated Statements of
Operations for all periods.
The disposal of the Commercial business assets was completed in April 2011. We reached substantial completion of asset liquidation at
December 2012. However, we continue to have legal and accounting expenses as we work with authorities on final deregistration of certain
European entities and product liability expenses associated with product previously sold into the Commercial channel. There was no revenue
related to the Commercial business for the years ended December 31, 2013 or 2012.
Following is a summary of certain financial information regarding the Commercial business (in thousands):
38
Year Ended December 31,
2013 2012 2011
Revenue
$
—
$
—
$
86
Loss from discontinued operations
$
(559
)
$
(163
)
$
(2,291
)
Gain on disposal activities
—
—
280
(559
)
(163
)
(2,011
)
Reclassification of foreign currency translation gains to income
upon substantial liquidation of subsidiaries
—
6,170
—
Reduction of previously-estimated disposal loss
—
—
946
Income tax benefit (expense)
389
234
(16
)
Total income (loss) from discontinued operations
$
(170
)
$
6,241
$
(1,081
)