Rayovac 2002 Annual Report Download - page 58

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The Company has recorded an additional minimum pension liability of $6,431 and $10,435 at September 30, 2001 and 2002, respectively, to recog-
nize the under funded position of its benefit plans. An intangible asset of $3,081 and $3,446 at September 30, 2001 and 2002, respectively, equal to the
unrecognized prior service cost of these plans, has also been recorded. The excess of the additional minimum liability over the unrecognized prior service
cost of $3,350 and $6,989 at September 30, 2001 and 2002, respectively, has been recorded as a component of accumulated other comprehensive
income, net of tax.
The Company sponsors a defined contribution pension plan for its domestic salaried employees, which allows participants to make contributions by
salary reduction pursuant to Section 401(k) of the Internal Revenue Code. The Company contributes annually from 3% to 6% of participants’ com-
pensation based on age, and may make additional discretionary contributions. The Company also sponsors defined contribution pension plans for
employees of certain foreign subsidiaries. Company contributions charged to operations, including discretionary amounts, for 2000, 2001 and 2002
were $2,171, $2,147, and $1,804, respectively.
For measurement purposes, annual rates of increase of 8.0% in the per capita costs of covered health care benefits were assumed for 2000, 2001 and
2002, respectively, gradually decreasing to 5.5%. The health care cost trend rate assumption has a significant effect on the amounts reported. For example,
increasing the assumed health care cost trend rates by one percentage point in each year would increase the accumulated postretirement benefit obliga-
tion as of September 30, 2002 by $181 and the aggregate of the service and interest cost components of net periodic postretirement benefit cost for the
year ended September 30, 2002 by $51. Decreasing the assumed health care cost trend rates by one percentage point in each year would decrease the
accumulated postretirement benefit obligation as of September 30, 2002 by $166 and the aggregate of the service and interest cost components of net
periodic postretirement benefit cost for the year ended September 30, 2002 by $46.
(12) Segment Information
The Company manages operations in three reportable segments based upon geographic area. North America includes the United States and Canada;
Latin America includes Mexico, Central America, South America, and the Caribbean; Europe/Rest of World (“Europe/ROW”) includes the United
Kingdom, continental Europe and all other countries in which the Company does business.
The Company manufactures and markets dry cell batteries including alkaline, zinc carbon, alkaline rechargeable, hearing aid, and other specialty bat-
teries and lighting products throughout the world. These product lines are sold in all geographic areas. Latin America revenues have historically been
derived primarily from zinc carbon and alkaline batteries.
Net sales and cost of sales to other segments have been eliminated. The gross contribution of intersegment sales is included in the segment selling the
product to the external customer. Segment revenues are based upon the geographic area in which the product is sold.
The reportable segment profits do not include interest expense, interest income, and income tax expense. Also, not included in the reportable segments
are corporate expenses including corporate purchasing expense, general and administrative expense and research and development expense. All depreci-
ation and amortization included in income from operations is related to reportable segments. Costs are identified to reportable segments or corporate,
according to the function of each cost center.
The reportable segment assets do not include cash, deferred tax benefits, investments, long-term intercompany receivables, most deferred charges, and
miscellaneous assets. All capital expenditures are related to reportable segments. Variable allocations of assets are not made for segment reporting.
Wal-Mart Stores, Inc., the Company’s largest mass merchandiser customer, represented 22%, 27% and 26% of its net sales during 2000, 2001 and
2002, respectively, primarily in North America.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Rayovac Corporation and Subsidiaries
(In thousands, except per share amounts)