Rayovac 2003 Annual Report Download - page 18

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(1) Certain reclassifications have been made to reflect the adoption of EITF 01-09 (which codified certain provisions of EITF 00-14, 00-22 and 00-25) for periods prior to
adoption in fiscal 2002. EITF 01-09 addresses the recognition, measurement and income statement classification of various types of sales incentives, either as a reduction
to revenue or as an expense. Concurrent with the adoption of EITF 00-25, we reclassified certain accrued trade incentives as a contra receivable versus our previous
presentation as a component of accounts payable.
(2) Pursuant to FASB Statement No. 142, Goodwill and Other Intangible Assets, we ceased amortizing goodwill on October 1, 2001. Upon initial application of Statement No. 142,
we reassessed the useful lives of its intangible assets and deemed only the trade name to have an indefinite useful life because it is expected to generate cash flows
indefinitely. Based on this, we ceased amortizing the trade name on October 1, 2001. Goodwill and tradename amortization expense for 1999, 2000 and 2001 included
in depreciation and amortization in income from operations are as follows:
(In millions) 1999 2000 2001
Goodwill amortization $0.8 $1.2 $1.1
Trade name amortization 0.4 2.3 2.3
$1.2 $3.5 $3.4
(3) The FASB issued Statement No. 145, which addresses, among other things, the income statement presentation of gains and losses related to debt extinguishments,
requiring such expenses to no longer be treated as extraordinary items, unless the items meet the definition of extraordinary per APB Opinion No. 30. We adopted
this statement on October 1, 2002. As a result, we recorded non-operating expenses within income before income taxes as follows during the fiscal years ended
September 30, 2001 and 2003:
In fiscal 2001, a non-operating expense of $8.6 million was recorded for the premium on the repurchase of $65.0 million of our senior subordinated notes and related
write-off of unamortized debt issuance costs in connection with a primary offering of our common stock in June 2001.
In fiscal 2003, a non-operating expense of $3.1 million was recorded for the write-off of unamortized debt issuance costs associated with the replacement of our previous
credit facility in October 2002.
(4) Fiscal 1999 includes restructuring and related charges—cost of goods sold of $1.3 million, and restructuring and related charges—operating expenses of $8.1 million.
(5) Fiscal 2001 includes restructuring and related charges—cost of goods sold of $22.1 million, and restructuring and related charges—operating expenses of $0.2 million.
Fiscal 2001 also includes a non-operating expense of $8.6 million discussed in (3) above. See Notes 15 and 2(x), respectively, in the Notes to Consolidated Financial
Statements included in this Annual Report for further discussion.
(6) Fiscal 2002 includes restructuring and related charges—cost of goods sold of $1.2 million. See Note 15 in the Notes to Consolidated Financial Statements included in
this Annual Report for further discussion.
(7) Fiscal 2003 includes a net sales reduction of $6.2 million related to North American retailer inventory repricing programs associated with the launch of our compre-
hensive new alkaline pricing program announced in 2003. These programs were launched in response to Duracell’s price reduction in the U.S. market on certain AA
and AAA batteries.
Fiscal 2003 includes restructuring and related charges—cost of goods sold of $21.1 million, and restructuring and related charges—operating expenses of $11.5 million.
Fiscal 2003 also includes a non-operating expense of $3.1 million discussed in (3) above. See Notes 15 and 2(x), respectively, in the Notes to Consolidated Financial
Statements included in this Annual Report for further discussion.
(8) Fiscal 2003 selected financial data is impacted by two acquisitions completed during the fiscal year. The VARTA acquisition was completed on October 1, 2002 and the
Remington acquisition was completed on September 30, 2003.
(9) Working capital is defined as current assets less current liabilities.
Selected Financial Data
Rayovac Corporation and Subsidiaries
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