Rayovac 2009 Annual Report Download - page 67

Table of Contents
Index to Financial Statements
Segment assets as of September 30, 2008 decreased to $700 million from $1,202 million at September 30, 2007. The decrease is primarily attributable
to the impact of foreign currency translation coupled with the impairment of goodwill and certain trade name intangible assets, a non−cash charge, in Fiscal
2008. See “Goodwill and Intangibles Impairment” below as well Note 3(i), Significant Accounting Policies and Practices—Intangible Assets, of Notes to
Consolidated Financial Statements included in this Annual Report on Form 10−K for additional information regarding this impairment charge and the
amount attributable to Global Pet Supplies. Goodwill and intangible assets as of September 30, 2008 total approximately $447 million and primarily relate
to the acquisitions of Tetra and the United Pet Group division of United.
Home and Garden
2008 2007
(in millions)
Net sales to external customers $334 $ 338
Segment profit $ 29 $ 41
Segment profit as a % of net sales 8.7% 12.1%
Assets as of September 30, $290 $ 548
Segment net sales to external customers of home and garden control products during Fiscal 2008 versus Fiscal 2007 decreased $4 million, or 1%,
primarily due to rising commodity costs and lower volume as a result of lower inventory levels at certain customers, partially offset by price increases.
Segment profitability in Fiscal 2008 decreased to $29 million from $41 million in Fiscal 2007. Segment profitability as a percentage of sales in Fiscal
2008 decreased to 8.7% from 12.1% in the same period last year. The decrease in segment profit for Fiscal 2008 was primarily due to increased commodity
costs associated with our lawn and garden controls products, our increased investment in the Spectricide and Cutter brands, coupled with depreciation and
amortization expense of $22 million recorded during Fiscal 2008, while no depreciation and amortization expense was recorded in Fiscal 2007. From
October 1, 2006 through December 30, 2007, the U.S. division of the Home and Garden Business was designated as discontinued operations. In accordance
with generally excepted accounting principles, while designated as discontinued operations we ceased recording depreciation and amortization expense
associated with the assets of this business. As a result of our reclassification of that business to a continuing operation we recorded a catch−up of
depreciation and amortization expense, which totaled $14 million, for the five quarters during which this business was designated as discontinued
operations. In addition, Fiscal 2008 also includes depreciation and amortization of $8 million representing the Fiscal 2008 depreciation and amortization
expense of the Home and Garden Business.
Segment assets as of September 30, 2008 decreased to $290 million from $548 million at September 30, 2007. The decrease is primarily attributable
to the depreciation expense mentioned above coupled with the impairment of goodwill and certain trade name intangible assets, a non−cash charge, in Fiscal
2008. See “Goodwill and Intangibles Impairment” below as well Note 3(i), Significant Accounting Policies and Practices—Intangible Assets, of Notes to
Consolidated Financial Statements included in this Annual Report on Form 10−K for additional information regarding this impairment charge and the
amount attributable to the Home and Garden Business. Intangible assets as of September 30, 2008 total approximately $115 million and primarily relate to
the acquisition of the United Industries division of United.
Corporate Expense. Our corporate expense in Fiscal 2008 decreased to $45 million from $47 million in Fiscal 2007. The decrease in expense for
Fiscal 2008 is primarily due to savings associated with our global realignment announced in January 2007, lower executive compensation expense and other
corporate overhead expense reductions, tempered by the write off of professional fees incurred in connection with the termination of potential sales of
certain of the Company’s businesses coupled with the non−recurrence of a curtailment gain of $2 million which was recorded in Fiscal 2007 in connection
with the termination of an employee benefit plan. Our corporate expense as a percentage of consolidated net sales in Fiscal 2008 decreased to 1.7% from
1.8% in Fiscal 2007.
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