Rayovac 2004 Annual Report Download - page 29

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 (8) below. See Note 15 in the Notes to Consolidated
Financial Statements included in this Annual Report on Form 10-K for further discussion.
(3) 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. See further discussion of acquisitions in Item 1: Business, and in Note 16 in the Notes
to Consolidated Financial Statements included in this Annual Report on Form 10-K.
(4) 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 on Form 10-K for further
discussion.
(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 (8) below.
(6) Certain reclassifications have been made to reflect the adoption of the Emerging Issues Task Force (“EITF”)
No. 01-09 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 01-09, we reclassified certain accrued trade incentives
as a contra receivable versus our previous presentation as a component of accounts payable.
(7) Pursuant to Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible
Assets, we ceased amortizing goodwill on October 1, 2001. Upon initial application of SFAS 142, we
reassessed the useful lives of our 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 trade name amortization expense for 2001 and 2000
included in depreciation and amortization in operating income are as follows:
2001 2000
(in millions)
Goodwill amortization ............................................ $1.1 $1.2
Trade name amortization .......................................... 2.3 2.3
Total ..................................................... $3.4 $3.5
(8) SFAS 145, which addresses, among other things, the income statement presentation of gains and losses
related to debt extinguishments, requires such expenses to no longer be treated as extraordinary items,
unless the items meet the definition of extraordinary per Accounting Principles Board (“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, 2003 and 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.
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.
(9) Working capital is defined as current assets less current liabilities.
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