Rayovac 2003 Annual Report Download - page 46

(5) INTANGIBLE ASSETS
Intangible assets consist of the following:
September 30, 2002 September 30, 2003
Gross Gross
Carrying Accumulated Net Carrying Accumulated Net
Amount Amortization Intangible Amount Amortization Intangible
Amortized Intangible Assets
Non-compete agreement $ 700 $ 630 $ 70 $ 700 $ 700 $ —
Proprietary technology 525 308 217 12,534 490 12,044
Customer lists —— —2,099 210 1,889
$ 1,225 $ 938 $ 287 $ 15,333 $1,400 $ 13,933
Pension Intangibles
Under-funded pension $ 3,446 $ — $ 3,446 $ 2,405 $ — $ 2,405
Unamortized Intangible Assets
Trade names balance as of beginning of year $90,000 $4,875 $85,125 $ 90,000 $4,875 $ 85,125
Trade name acquired during year —— —128,642 — 128,642
Effect of translation —— —22,962 — 22,962
Trade names balance as of end of year $90,000 $4,875 $85,125 $241,604 $4,875 $236,729
North Latin
America America Europe/ROW Total
Goodwill
Balance as of October 1, 2002, net $ 1,035 $26,884 $ 2,648 $ 30,567
Goodwill acquired during year 284,383 11,170 62,493 358,046
Effect of translation — (178) 9,945 9,767
Balance as of September 30, 2003, net $285,418 $37,876 $75,086 $398,380
During 2003, the Company completed the acquisitions of substantially all of the consumer battery business of VARTA AG and
Remington Products Company, L.L.C. The Company recognized intangible assets associated with the acquisitions, including propri-
etary manufacturing technology, customer lists, and VARTA trade name intangibles. The purchase price allocation for the VARTA
acquisition has been completed. The Company also recognized goodwill with both the VARTA and Remington acquisitions. The
purchase price allocation of the Remington acquisition is not yet finalized. Future allocation of the Remington purchase price will
impact the amount and or segment allocation of goodwill and other intangible assets acquired during the year. (See also footnote
16, Acquisitions and Divestitures, for additional discussion on the VARTA and Remington acquisitions.) No allocation to trade name
or other intangibles has been made in the Consolidated Balance Sheet as of September 30, 2003 as valuations relating to Remington
have not been completed.
The non-compete agreement was amortized on a straight-line basis over 5 years, proprietary technology assets are being amortized
on a straight-line basis over 10 to 19 years, and the customer list asset is being amortized on a straight-line basis over 10 years. The
Company has deemed that its trade name intangible assets have indefinite lives because they are expected to generate cash flows
indefinitely, the Company has no intention of selling the trade names and there are no legal, regulatory, or contractual provisions
that may limit the useful lives of the trade names. Goodwill and intangible assets deemed to have indefinite lives are tested for
impairment annually.
During 2003, the Company wrote-off a $702 pension intangible asset related to the Madison, Wisconsin packaging facility pension
plan. The write-off related to the closure of operations at the facility and curtailment of the pension plan and is reflected in Restruc-
turing charges in cost of goods sold in our Consolidated Statement of Operations. (See also Restructuring Charges, footnote 15, for
further discussion.)
Notes to Consolidated Financial Statements
Rayovac Corporation and Subsidiaries
(In thousands, except per share amounts)
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