Sunbeam 2001 Annual Report Download - page 27

2008. These commitments total $2.7 million in
2002, $2.6 million in 2003, $2.3 million in
2004, $1.6 million in 2005, $0.6 million in
2006 and $0.4 million in total for all later years.
Total lease expense was $4.8 million in 2001,
$4.1 million in 2000 and $3.5 million in 1999.
12. Contingencies
The Company is involved in various legal
disputes in the ordinary course of business. In
addition, the Environmental Protection Agency
has designated the Company as a potentially
responsible party, along with numerous other
companies, for the clean up of several hazard-
ous waste sites. Based on currently available
information, the Company does not believe
that the disposition of any of the legal or envi-
ronmental disputes the Company is currently
involved in will have a material adverse effect
upon the financial condition, results of opera-
tions, cash flows or competitive position of the
Company. It is possible, that as additional in-
formation becomes available, the impact on
the Company of an adverse determination
could have a different effect.
13. New Accounting Pronouncements
The Company adopted Statement of Finan-
cial Accounting Standard No. 133 (‘‘SFAS 133’’),
Accounting for Derivative Instruments and Hedg-
ing Activities, on January 1, 2001. The statement
requires the Company to recognize all deriva-
tives on the balance sheet at fair value. Deriva-
tives that are not hedges must be adjusted to
fair value through income. If the derivative is a
hedge, depending on the nature of the hedge,
changes in the fair value of derivatives will
either be offset against the change in fair value
of the hedged assets, liabilities, or firm commit-
ments through earnings or recognized in other
comprehensive income until the hedged item
is recognized in earnings. Hedge ineffective-
ness, the amount by which the change in the
value of a hedge does not exactly offset the
change in the value of the hedged item, will be
immediately recognized in earnings. The adop-
tion of SFAS 133 on January 1, 2001 did not
have a material impact on the Company’s re-
sults of operations or financial position.
In July 2001, the Financial Accounting
Standards Board (‘‘FASB’’) issued Statements of
Financial Accounting Standards No. 141, Busi-
ness Combinations, and No. 142, Goodwill and
Other Intangible Assets, effective for fiscal years
beginning after December 15, 2001. Under the
new rules, goodwill (and intangible assets
deemed to have indefinite lives) will no longer
be amortized but will be subject to annual
impairment tests in accordance with the State-
ments. Other intangible assets will continue to
be amortized over their useful lives. The Com-
pany will apply the new rules on accounting
for goodwill and other intangible assets begin-
ning in the first quarter of 2002. During 2002,
the Company will perform the first of the re-
quired impairment tests of goodwill and indefi-
nite lived intangible assets, but does not antici-
pate a material impact on its results of
operations or financial position.
In June 2001, the FASB issued Statement of
Financial Accounting Standard No. 143 (‘‘SFAS
143’’), Accounting for Asset Retirement Obliga-
tions, effective for fiscal years beginning after
June 15, 2002. This standard requires entities to
record the fair value of a liability for an asset
retirement obligation in the period in which it
is incurred. SFAS 143 is effective for the Com-
pany beginning with the first quarter of 2003,
and its adoption is not expected to have a
material impact on the Company’s results of
operations or financial position.
In August 2001, the FASB issued Statement
of Financial Accounting Standard No. 144
(‘‘SFAS 144’’), Accounting for the Impairment or
Disposal of Long-Lived Assets, effective for fiscal
years beginning after December 15, 2001. This
standard supercedes SFAS 121, Accounting for
the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of, and provides a
single accounting model for long-lived assets to
be disposed of. The new standard also super-
sedes the provisions of APB Opinion No. 30
with regard to reporting the effects of a disposal
of a segment of a business and requires ex-
pected future operating losses from discontin-
ued operations to be displayed in discontinued
operations in the period(s) in which the losses
are incurred. SFAS 144 is effective for the Com-
pany beginning with the first quarter of 2002,
and its adoption is not expected to have a
material impact on the Company’s results of
operations or financial position.
14. Derivative Financial Instruments
The Company’s derivative activities are ini-
tiated within the guidelines of documented
Alltrista
25