Sunbeam 2014 Annual Report Download - page 22

Download and view the complete annual report

Please find page 22 of the 2014 Sunbeam annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 84

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84

20 Jarden Corporation Annual Report 2014
(approximately $39 million), partially offset by an increase in SG&A (approximately $19 million). Operating earnings for 2014 in the
Outdoor Solutions segment decreased $2.7 million, or 1.4%, versus the prior year, primarily due to an increase in SG&A (approximately
$4 million), partially offset by an increase in gross prot, primarily due to the gross prot impact of higher sales. The increase in the
charges recorded related to the impairment of intangible assets ($10million) were essentially offset by a decrease in restructuring
costs. Operating earnings for 2014 in the Process Solutions segment decreased $0.6 million, or 1.5%, versus the prior year, mostly due
to the increase in the charges recorded related to the impairment of intangible assets.
Impairment Charges
In the fourth quarter of 2014, the Company’s annual impairment test, in connection with certain fourth quarter triggering events,
resulted in non-cash charges to reect impairment of intangible assets related to certain of the Company’s tradenames. The impairment
charges were allocated to the Company’s reporting segments as follows:
(In millions) 2014
Impairment of intangibles
Branded Consumables $ 13.9
Consumer Solutions 0.7
Outdoor Solutions 9.9
Process Solutions 0.9
$25.4
Impairments – 2014
In the Branded Consumables segment, the impairment charge recorded relates to certain tradenames primarily associated with this
segment’s home care and safety and security businesses. The impairment was due to a decrease in the fair value of forecasted cash
ows, primarily resulting from the deterioration of revenues and margins related to these tradenames. In the Outdoor Solutions
segment, the impairment charge recorded relates primarily to certain tradenames within this segment’s team sports and winter sports
business, primarily a result of the deterioration of revenues and margins related to these tradenames.
Interest Expense
Net interest expense increased $14.9 million to $210 million for 2014 versus the prior year, primarily due to higher average debt levels.
Income Taxes
The Company’s reported tax rate for 2014 and 2013 was 35.0% and 42.1%, respectively. There is no difference from the statutory tax
rate to the reported tax rate for 2014 due to the offsetting effect of differences resulting from the U.S. tax expense related to the
taxation of foreign income, state tax and the remeasurement of the Company’s operations in Venezuela. The difference from the
statutory tax rate to the reported tax rate for 2013 results principally due to the currency devaluation in Venezuela and from the
translation of U.S. dollar denominated net assets in Venezuela and the tax effects of non-deductible compensation expense.
Net Income
Net income for 2014 increased $38.6 million to $243 million versus the prior year. For 2014 and 2013, earnings per diluted share were
$1.28 and $1.18, respectively. The increase in net income was in part due to the YCC Acquisition, the gross prot impact of higher sales
and a decrease in the purchase accounting adjustment for the elimination of manufacturer’s prot in inventory (approximately $66
million), partially offset by an increase in Venezuela foreign exchange-related charges (approximately $151 million), an increase in
net acquisition-related and other costs (approximately $24 million) and an increase in the loss on early extinguishment of debt ($31
million).
Management’s Discussion and Analysis
Jarden Corporation Annual Report 2014