Rayovac 2013 Annual Report Download - page 48

Fiscal 2012, Fiscal 2010 and the period from August 31, 2009 through September 30, 2009. See the
“Critical Accounting Policies—Valuation of Assets and Asset Impairment” section of Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations as well as Note
2(j), “Significant Accounting Policies—Intangible Assets”, of Notes to Consolidated Financial Statements
included in this Annual Report on Form 10-K for further details on impairment charges.
(2) On November 5, 2008, Spectrum Brands’ board of directors committed to 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, following an evaluation of the historical lack of profitability
and the projected input costs and significant working capital demands for the growing product portion of the
Home and Garden Business during Fiscal 2009. During the second quarter of Fiscal 2009, we completed the
shutdown of the growing products portion of the Home and Garden Business and, accordingly, began
reporting the results of operations of this business as discontinued operations. Therefore, the presentation of
all historical continuing operations excludes the growing products portion of the Home and Garden
Business.
(3) Fiscal 2013 income tax expense of $27 million includes a non-cash charge of approximately $65 million
resulting from an increase in the valuation allowance against certain net deferred tax assets, net of a
$50 million benefit due to the reversal of $50 million of the valuation allowance in conjunction with the
acquisition of the HHI Business.
(4) Fiscal 2012 income tax expense of $60 million includes a non-cash charge of approximately $14 million
resulting from an increase in the valuation allowance against certain net deferred tax assets, net of a
$15 million benefit due to the reversal of $15million of the valuation allowance in conjunction with the
acquisition of FURminator.
(5) Fiscal 2011 income tax expense of $92 million includes a non-cash charge of approximately $65 million
resulting from an increase in the valuation allowance against certain net deferred tax assets.
(6) Fiscal 2010 income tax expense of $63 million includes a non-cash charge of approximately $92 million
resulting from an increase in the valuation allowance against certain net deferred tax assets.
(7) Included in the period from August 31, 2009 through September 30, 2009 for the Successor Company is a
non-cash tax charge of $58 million related to the residual U.S. and foreign taxes on approximately
$166 million of actual and deemed distributions of foreign earnings. Income tax expense for the Predecessor
Company for the period from October 1, 2008 through August 30, 2009 includes a non-cash adjustment of
approximately $52 million resulting from a reduction in the valuation allowance against certain deferred tax
assets. Included in income tax expense for the period from October 1, 2008 through August 30, 2009 for the
Predecessor Company is a non-cash charge of $104 million related to the tax effects of the fresh start
adjustments. In addition, income tax expense for the Predecessor Company for this period includes the tax
effect of the gain on the cancellation of debt from the extinguishment of the then existing senior
subordinated notes as well as the modification of the then existing senior term credit facility. The tax effect
of these gains increased the Company’s U.S. net deferred tax asset exclusive of indefinite lived intangibles
by approximately $124 million. However, due to the Company’s full valuation allowance on the U.S. net
deferred tax assets exclusive of indefinite lived intangibles as of August 30, 2009, the tax effect of the gain
on the cancellation of debt and the modification of the senior secured credit facility was offset by a
corresponding adjustment to increase the valuation allowance for deferred tax assets by $124 million. The
tax effect of the fresh start adjustments, the gain on the cancellation of debt and the modification of the
senior secured credit facility, net of corresponding adjustments to the valuation allowance, are netted against
reorganization items.
(8) See Note 14, “Restructuring and Related Charges”, of Notes to Consolidated Financial Statements included
in this Annual Report on Form 10-K for further discussion.
(9) Diluted average shares outstanding for each of Fiscal 2013, Fiscal 2011, Fiscal 2010, the period from
August 31, 2009 through September 30, 2009 and the period from October 1, 2008 through August 30, 2009
does not assume the exercise of common stock equivalents as the impact would be antidilutive due to the
losses reported for those periods.
(10) Amounts reflect the results of continuing operations only.
(11) Working capital is defined as current assets less current liabilities.
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