Rayovac 2012 Annual Report Download - page 130

SPECTRUM BRANDS HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(In thousands, except per share amounts)
Segment profit
2012 2011 2010
Global Batteries & Appliances ..................................... $244,442 $238,864 $ 171,298
Global Pet Supplies .............................................. 85,866 75,564 57,675
Home and Garden Business ....................................... 73,609 65,180 51,192
Total segments ................................................. 403,917 379,608 280,165
Corporate expenses .............................................. 51,514 53,967 48,817
Acquisition and integration related charges ........................... 31,066 36,603 38,452
Restructuring and related charges ................................... 19,591 28,644 24,118
Intangible asset impairment ....................................... — 32,450 —
Interest expense ................................................. 191,911 208,329 277,015
Other expense, net ............................................... 878 2,491 12,300
Income (loss) from continuing operations before reorganization items and
income taxes ................................................. $108,957 $ 17,124 $(120,537)
The Global Batteries & Appliances segment does business in Venezuela through a Venezuelan subsidiary.
At January 4, 2010, the beginning of the Company’s second quarter of Fiscal 2010, the Company determined that
Venezuela met the definition of a highly inflationary economy under GAAP. As a result, beginning January 4,
2010, the U.S. dollar is the functional currency for the Company’s Venezuelan subsidiary. Accordingly,
subsequent to January 4, 2010, currency remeasurement adjustments for this subsidiary’s financial statements
and other transactional foreign exchange gains and losses are reflected in earnings. Through January 3, 2010,
prior to being designated as highly inflationary, translation adjustments related to the Venezuelan subsidiary
were reflected in Shareholders’ equity as a component of AOCI.
In addition, on January 8, 2010, the Venezuelan government announced its intention to devalue its currency,
the Bolivar fuerte, relative to the U.S. dollar. As a result, the Company remeasured the local statement of
financial position of its Venezuela entity during the second quarter of Fiscal 2010 to reflect the impact of the
devaluation to the official exchange rate of 4.3 Bolivar fuerte per U.S. dollar. Based on actual exchange activity
as of September 30, 2010, the Company determined that the most likely method of exchanging its Bolivar fuertes
for U.S. dollars would be to formally apply with the Venezuelan government to exchange through commercial
banks at the SITME rate specified by the Central Bank of Venezuela. The SITME rate as of September 30, 2010
was quoted at 5.3 Bolivar fuerte per U.S. dollar. Therefore, the Company changed the rate used to remeasure
Bolivar fuerte denominated transactions as of September 30, 2010 from the official exchange rate to the 5.3
SITME rate in accordance with ASC Topic 830: “Foreign Currency Matters” (“ASC 830) as it was the expected
rate at which exchanges of Bolivar fuerte to U.S. dollars would be settled.
The designation of the Company’s Venezuela entity as a highly inflationary economy and the devaluation of
the Bolivar fuerte resulted in a $1,486 reduction to the Company’s operating income during Fiscal 2010. The
Company also reported a foreign exchange loss in Other expense, net, of $10,102 during Fiscal 2010 related to
Bolivar fuerte denominated transactions.
As of September 30, 2011, the Company no longer exchanged its Bolivar fuertes for U.S. dollars through
the SITME mechanism as the SITME was no longer the most likely method of exchanging its Bolivar fuertes for
U.S. dollars. Therefore, the Company changed the rate used to remeasure Bolivar fuerte denominated
transactions as of September 30, 2011 from the 5.3 SITME rate to the 4.3 official exchange rate in accordance
120