Rayovac 2009 Annual Report Download - page 190

Table of Contents
Index to Financial Statements SPECTRUM BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
eleven month period ended August 30, 2009, Fiscal 2008 and Fiscal 2007, the Predecessor Company, as a result of its testing, recorded non−cash pre tax
impairment charges of $34,391, $861,234 and $$362,452, respectively. The tax impact, prior to consideration of the current year valuation allowance, of the
impairment charges was a deferred tax benefit of $12,965, $142,877 and $76,500 during the eleven month period ended August 30, 2009, Fiscal 2008 and
Fiscal 2007, respectively, as a result of a significant portion of the impaired assets not being deductible for tax purposes in 2008.
(10) Discontinued Operations
The Predecessor Company, in the third quarter of its fiscal year ended September 30, 2006, engaged advisors to assist it in exploring possible strategic
options, including divesting certain assets, in order to reduce its outstanding indebtedness. In connection with this undertaking, during the first quarter of
Fiscal 2007 the Predecessor Company approved and initiated a plan to sell the Home and Garden Business, which at the time was comprised of U.S. and
Canadian divisions and was engaged in the manufacturing and marketing of lawn and garden and insect control products as well as growing media products.
As a result, the Predecessor Company designated certain assets and liabilities related to the Home and Garden Business as held for sale and designated the
Home and Garden Business as discontinued operations.
On November 1, 2007, the Predecessor Company sold the Canadian division of the Home and Garden Business, which operated under the name
Nu−Gro, to a new company formed by RoyCap Merchant Banking Group and Clarke Inc. Cash proceeds received at closing, net of selling expenses, totaled
$14,931 and were used to reduce outstanding debt. These proceeds are included in net cash provided by investing activities of discontinued operations in the
accompanying Consolidated Statements of Cash Flows. On February 5, 2008, the Predecessor Company finalized the contractual working capital
adjustment in connection with this sale which increased proceeds received by the Predecessor Company by $500. As a result of the finalization of the
contractual working capital adjustments the Predecessor Company recorded a loss on disposal of $1,087, net of tax benefit.
During the second quarter of Fiscal 2008 the Predecessor Company determined that in view of the difficulty in predicting the timing or probability of
a sale of the Home and Garden Business, the requirements of ASC 360, necessary to classify the Home and Garden Business as discontinued operations
were no longer met. As a result, effective December 31, 2007, the Predecessor Company reclassified the Home and Garden Business, which had been
designated as a discontinued operation since October 1, 2006, as a continuing operation.
On November 11, 2008, the Predecessor Board approved the shutdown of the growing products portion of the Home and Garden Business, which
included the manufacturing and marketing of fertilizers, enriched soils, mulch and grass seed. The decision to shutdown the growing products portion of the
Home and Garden Business was made only after the Predecessor Company was unable to successfully sell this business, in whole or in part. The shutdown
of the growing products portion of the Home and Garden Business was completed during the second quarter of Fiscal 2009.
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