Rayovac 2006 Annual Report Download - page 100

88 SPECTRUM BRANDS | 2006 ANNUAL REPORT
also sponsors defi ned contribution pension plans for employees
of certain foreign subsidiaries. Company contributions charged
to operations, including discretionary amounts, for 2006, 2005
and 2004 were $5,900, $4,193 and $1,896, respectively.
For measurement purposes, annual rates of increase of 10.0%
in the per capita costs of covered health care benefi ts were
assumed for 2006, 2005 and 2004. The projected annual rates of
increase decline incrementally in future years from 11.0% to
4.0%, 10.0% to 3.5% and 10.0% to 4.0%, respectively, for
2006, 2005 and 2004. The health care cost trend rate assumption
has a moderate effect on the amounts reported. For example,
increasing the assumed health care cost trend rates by one per-
centage point in each year would increase the accumulated post-
retirement benefi t obligation as of September 30, 2006 by $563,
and the aggregate of the service and interest cost components of
net periodic postretirement benefi t cost for the year ended
September 30, 2006 by $139. Decreasing the assumed health
care cost trend rates by one percentage point in each year would
decrease the accumulated postretirement benefi t obligation as of
September 30, 2006 by $365 and the aggregate of the service and
interest cost components of net periodic postretirement benefi t
cost for the year ended September 30, 2006, by $92.
(13) Segment Information
As of October 1, 2005, the Company began managing its busi-
ness in four reportable segments, including: (i) North America,
which consists of our legacy battery, shaving and grooming, per-
sonal care and portable lighting business (the “Legacy Businesses”)
in the United States and Canada and the acquired United lawn and
garden and household insect control business (“North America”);
(ii) Latin America, which consists of the Legacy Businesses in
Mexico, Central America, South America and the Caribbean
(“Latin America”); (iii) Europe/ROW, which consists of the Legacy
Businesses in the United Kingdom, continental Europe, China,
Australia and all other countries in which the Company conducts
Legacy Businesses (“Europe/ROW”); and (iv) Global Pet, which
consists of the acquired United Pet Group, Tetra and Jungle Labs
businesses (together, “Global Pet”). The presentation of all histori-
cal segment reporting herein has been changed to conform to this
segment reporting.
Global and geographic strategic initiatives and fi nancial objec-
tives are determined at the corporate level. Each reportable seg-
ment is responsible for implementing defi ned strategic initiatives
and achieving certain fi nancial objectives. Each reportable seg-
ment has a general manager responsible for all the sales and mar-
keting initiatives for all product lines within that segment plus
the fi nancial results of that segment.
Net sales and cost of goods sold to other business segments
have been eliminated. The gross contribution from intersegment
sales is included in the segment selling the product to the exter-
nal customer. Segment net sales are based upon the segment
from which the product is shipped.
The reportable segment profi ts do not include interest expense,
interest income and income tax expense. Also not included in the
reportable segments are corporate expenses including purchasing
department, corporate general and administrative expense, cer-
tain research and development expense, restructuring and related
charges and impairment charges. All depreciation and amortiza-
tion included in operating income is related to reportable seg-
ments or corporate. Costs are identifi ed to reportable segments
or corporate, according to the function of each cost center.
All capital expenditures are related to reportable segments.
Variable allocations of assets are not made for segment reporting.
Segment information for 2006, 2005 and 2004 is as follows:
Net Sales to External Customers
2006 2005 2004
North America $1,212,447 $1,155,783 $ 653,963
Europe/ROW 559,893 657,651 617,967
Latin America 236,189 208,077 145,256
Global Pet 543,223 285,643 –
Total segments $2,551,752 $2,307,154 $1,417,186
2006 Form 10-K Annual Report
Spectrum Brands, Inc.