Rayovac 2012 Annual Report Download - page 79

our pension liability will increase, ultimately increasing future pension expense and required funding
contributions.
See Note 10, “Employee Benefit Plans”, of Notes to Consolidated Financial Statements included in this
Annual Report on Form 10-K for a more complete discussion of our employee benefit plans.
Restructuring and Related Charges
Restructuring charges are recognized and measured according to the provisions of ASC Topic 420: “Exit or
Disposal Cost Obligations,” (“ASC 420”). Under ASC 420, restructuring charges include, but are not limited to,
termination and related costs consisting primarily of severance costs and retention bonuses, and contract
termination costs consisting primarily of lease termination costs. Related charges, as defined by us, include, but
are not limited to, other costs directly associated with exit and integration activities, including impairment of
property and other assets, departmental costs of full-time incremental integration employees, and any other items
related to the exit or integration activities. Costs for such activities are estimated by us after evaluating detailed
analyses of the cost to be incurred. We present restructuring and related charges on a combined basis.
Liabilities from restructuring and related charges are recorded for estimated costs of facility closures,
significant organizational adjustments and measures undertaken by management to exit certain activities. Costs
for such activities are estimated by management after evaluating detailed analyses of the costs to be incurred.
Such liabilities could include amounts for items such as severance costs and related benefits (including
settlements of pension plans), impairment of property and equipment and other current or long term assets, lease
termination payments and any other items directly related to the exit activities. While the actions are carried out
as expeditiously as possible, restructuring and related charges are estimates. Changes in estimates resulting in an
increase to or a reversal of a previously recorded liability may be required as management executes a
restructuring plan.
We report restructuring and related charges associated with manufacturing and related initiatives in cost of
goods sold. Restructuring and related charges reflected in cost of goods sold include, but are not limited to,
termination and related costs associated with manufacturing employees, asset impairments relating to
manufacturing initiatives and other costs directly related to the restructuring initiatives implemented.
We report restructuring and related charges associated with administrative functions in operating expenses,
such as initiatives impacting sales, marketing, distribution or other non-manufacturing related functions.
Restructuring and related charges reflected in operating expenses include, but are not limited to, termination and
related costs, any asset impairments relating to the administrative functions and other costs directly related to the
initiatives implemented.
See Note 14, “Restructuring and Related Charges”, of Notes to Consolidated Financial Statements included
in this Annual Report on Form 10-K for a more complete discussion of our restructuring initiatives and related
costs.
Acquisition and Integration Related Charges
The costs of plans to (i) exit an activity of an acquired company,(ii) involuntarily terminate employees of
an acquired company or (iii) relocate employees of an acquired company are measured and recorded in
accordance with the provisions of the ASC 805. Under ASC 805, if certain conditions are met, such costs are
recognized as a liability assumed as of the consummation date of the purchase business combination and
included in the allocation of the acquisition cost. Costs related to terminated activities or employees of the
acquired company that do not meet the conditions prescribed in ASC 805 are treated as acquisition and
integration related charges and expensed as incurred.
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