Rayovac 2003 Annual Report Download - page 53

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A valuation allowance is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be
realized. The ultimate realization of the deferred tax assets depends on the ability to generate sufficient taxable income of the appro-
priate character in the future and in the appropriate taxing jurisdictions. For the year ended September 30, 2003, the Company has
established a valuation allowance for operating loss carryforwards in certain non-U.S. jurisdictions in the amount of $366.
As part of the Remington acquisition, the Company acquired foreign subsidiaries with foreign operating loss carryforwards of
approximately $18,408. A valuation allowance has been established for the deferred income tax benefits related to certain Remington
foreign subsidiary loss carryforwards that may not be realized in the amount of approximately $3,678.
(10) LEASES
Future minimum rental commitments under non-cancelable leases, principally pertaining to land, buildings and equipment,
are as follows:
Operating Leases Capital Leases
2004 $14,395 $ 3,587
2005 12,154 2,642
2006 9,681 2,311
2007 7,864 2,122
2008 6,760 2,060
Thereafter 34,386 24,190
Total minimum lease payments $85,240 $36,912
Less: amount representing interest 12,812
Present value of minimum lease payments $24,100
Of the annual lease payments shown above, $4,122 are subject to inflationary increases each year. All of the leases expire during the
years 2004 through 2013.
Total rental expenses were $7,137, $7,341 and $12,315 for 2001, 2002 and 2003, respectively.
(11) EMPLOYEE BENEFIT PLANS
Pension Benefits The Company has various defined benefit pension plans covering substantially all of its employees in the United
States and certain employees in other countries. 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 sponsors or participates in a number of other non-U.S. pension arrangements, including various retirement and
termination benefit plans, some of which are covered by local law or coordinated with government-sponsored plans, which are not
significant in the aggregate and therefore are not included in the information presented below.
The Company also has various nonqualified deferred compensation agreements with certain of its employees. Under certain agree-
ments, 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.
Notes to Consolidated Financial Statements
Rayovac Corporation and Subsidiaries
(In thousands, except per share amounts)