Rayovac 2012 Annual Report Download - page 71

“Ningbo Exit Plan”). We recorded de minimis pretax restructuring and related charges during Fiscal 2011 and
$2 million of pretax restructuring and related charges during Fiscal 2010, in connection with the Ningbo Exit
Plan. We have recorded pretax restructuring and related charges of approximately $30 million since the inception
of the Ningbo Exit Plan.
During Fiscal 2009, we implemented a series of initiatives within the Global Batteries & Personal Care
segment and the Global Pet Supplies segment to reduce operating costs as well as evaluate our opportunities to
improve our capital structure (the “Global Cost Reduction Initiatives”). These initiatives included headcount
reductions within all our segments and the exit of certain facilities in the U.S. related to the Global Pet Supplies
segment. These initiatives also included expenditures for banking and legal and accounting consultation fees
related to the evaluation of our capital structure. We recorded $25 million and $18 million of pretax restructuring
and related charges during Fiscal 2011 and Fiscal 2010, respectively, related to the Global Cost Reduction
Initiatives. Costs associated with these initiatives, which are expected to be incurred through January 31, 2015,
are projected at approximately $78 million.
Acquisition and integration related charges. Acquisition and integration related charges reflected in
Operating expenses include, but are not limited to, transaction costs such as banking, legal and accounting
professional fees directly related to acquisitions, employee termination charges, integration related professional
fees and other post business combination related expenses.
We incurred $37 million of Acquisition and integration related charges during Fiscal 2011 primarily in
connection with the Merger, which consisted of: (i) $23 million of integration costs; (ii) $8 million of employee
termination charges; and (iii) $6 million of legal and professional fees. We incurred $38 million of Acquisition
and integration related charges during Fiscal 2010, which consisted of the following: (i) $25 million of legal and
professional fees; (ii) $10 million of employee termination charges; and (iii) $4 million of integration costs.
Goodwill and Intangibles Impairment. Accounting standards require companies to test goodwill and
indefinite-lived intangible assets for impairment annually, or more often if an event or circumstance indicates
that an impairment loss may have been incurred. In Fiscal 2011 and 2010, we tested our goodwill and indefinite-
lived intangible assets as required. As a result of this testing, we recorded a non-cash pretax impairment charge
of $32 million in Fiscal 2011. The $32 million non-cash pretax impairment charge incurred in Fiscal 2011
reflects trade name intangible asset impairments of the following: $23 million related to the Global Batteries and
Appliances segment; $8 million related to Global Pet Supplies; and $1 million related to the Home and Garden
Business. See Note 2(i), “Significant Accounting Policies and Practices—Intangible Assets”, of Notes to
Consolidated Financial Statements included in this Annual Report on Form 10-K for further details on this
impairment charge.
Interest Expense. Interest expense in Fiscal 2011 decreased to $208 million from $277 million in Fiscal
2010. The decrease was driven primarily by lower unusual items in Fiscal 2011 of $29 million compared to
$78 million in Fiscal 2010, and lower effective interest rates on outstanding debt. Unusual items in Fiscal 2011
included (i) $15 million related to the write off of unamortized debt issuance costs related to our former term
loan that was refinanced on February 1, 2011, a non-cash charge; (ii) a $9 million write off of unamortized
original issue discount related to the refinanced term loan facility, a non-cash charge; and (iii) a prepayment
premium of $5 million related to the refinanced term loan facility. Unusual items for Fiscal 2010 included
(i) $55 million representing the write-off of the unamortized portion of discounts and premiums related to debt
that was paid off in conjunction with our refinancing on June 16, 2010, a non-cash charge; (ii) a $9 million cash
charge related to bridge commitment fees we paid while we were refinancing our debt; (iii) $6 million
representing the write-off of the unamortized debt issuance costs related to debt that was paid off, a non-cash
charge; (iv) $4 million cash charge related to a prepayment premium; and (v) $3 million of cash charges related
to the termination of a Euro-denominated interest rate swap.
61