Rayovac 2002 Annual Report Download - page 56

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42
43
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Rayovac Corporation and Subsidiaries
(In thousands, except per share amounts)
The Company believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred
tax assets.
Provision has not been made for United States income taxes on a portion of the undistributed earnings of the Company’s foreign subsidiaries (approxi-
mately $33,366 and $30,881 at September 30, 2001 and 2002, respectively), either because any taxes on dividends would be offset substantially by
foreign tax credits or because the Company intends to reinvest those earnings. Such earnings would become taxable upon the sale or liquidation of these
foreign subsidiaries or upon remittance of dividends. It is not practicable to estimate the amount of the deferred tax liability on such earnings.
(10) Leases
Future minimum rental commitments under non-cancelable operating leases, principally pertaining to land, buildings and equipment, are as follows:
2003 $ 6,271
2004 5,014
2005 4,794
2006 3,959
2007 3,633
Thereafter 14,248
$37,919
The leases on the properties require annual lease payments of $2,788 subject to annual inflationary increases. All of the leases expire during the years
2003 through 2014.
Total rental expenses were $6,924, $7,137 and $7,341 for 2000, 2001 and 2002, respectively.
During 2002, the Company entered into a long-term lease for a facility being built in Dixon, Illinois (see Subsequent Events footnote 18). The
Company anticipates that construction will be completed and the lease payments will be fixed for this facility during the second fiscal quarter of 2003.
As amounts are not fixed, minimum rental commitments for this lease are not included above.
(11) Employee Benefit Plans
Pension Benefits The Company has various defined benefit pension plans covering substantially all of its domestic hourly employees and union mem-
bers. Plans generally provide benefits of stated amounts for each year of service. The Company’s practice is to fund pension costs at amounts within
the acceptable ranges established by the Employee Retirement Income Security Act of 1974, as amended.
The Company also has various nonqualified deferred compensation agreements with certain of its employees. Under certain agreements, the Company
has agreed to pay certain amounts annually for the first 15 years subsequent to retirement or to a designated beneficiary upon death. It is management’s
intent that life insurance contracts owned by the Company will fund these agreements. Under the other agreements, the Company has agreed to
pay such deferral amounts in up to 15 annual installments beginning on a date specified by the employee, subsequent to retirement or disability, or to a
designated beneficiary upon death. The Company established a rabbi trust to fund these agreements.