Graco Inc.

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SEC Filings

10-K
GRACO INC filed this Form 10-K on 02/16/2016
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Components of other intangible assets were (dollars in thousands):
 
Estimated
Life
(years)
 
Cost
 
Accumulated
Amortization
 
Foreign
Currency
Translation
 
Book
Value
December 25, 2015
 
 
 
 
 
 
 
 
 
Customer relationships
3 - 14
 
$
197,900

 
$
(36,852
)
 
$
(9,738
)
 
$
151,310

Patents, proprietary technology and product documentation
3 - 11
 
20,400

 
(8,952
)
 
(658
)
 
10,790

Trademarks, trade names and other
5
 
495

 
(132
)
 
(94
)
 
269

 
 
 
218,795

 
(45,936
)
 
(10,490
)
 
162,369

Not Subject to Amortization
 
 
 
 
 
 
 
 
 
Brand Names
 
 
69,514

 

 
(3,896
)
 
65,618

Total
 
 
$
288,309

 
$
(45,936
)
 
$
(14,386
)
 
$
227,987

December 26, 2014
 
 
 
 
 
 
 
 
 
Customer relationships
3 - 14
 
$
143,144

 
$
(21,948
)
 
$
(7,334
)
 
$
113,862

Patents, proprietary technology and product documentation
3 - 11
 
18,268

 
(7,126
)
 
(655
)
 
10,487

Trademarks, trade names and other
5
 
175

 
(44
)
 

 
131

 
 
 
161,587

 
(29,118
)
 
(7,989
)
 
124,480

Not Subject to Amortization
 
 
 
 
 
 
 
 
 
Brand names
 
 
55,265

 

 
(3,467
)
 
51,798

Total
 
 
$
216,852

 
$
(29,118
)
 
$
(11,456
)
 
$
176,278


Amortization of intangibles was $17.2 million in 2015, $11.6 million in 2014 and $12.5 million in 2013. Estimated future annual amortization is as follows (excluding amounts related to businesses acquired subsequent to the end of 2015): $17.1 million in 2016, $16.8 million in 2017, $16.5 million in 2018, $16.3 million in 2019, $16.3 million in 2020 and $79.4 million thereafter.

Other Assets. Components of other assets were (in thousands):
 
2015
 
2014
Cash surrender value of life insurance
$
12,856

 
$
13,187

Capitalized software
2,599

 
3,596

Equity method investment
6,129

 
5,859

Deposits and other
2,863

 
3,565

Total
$
24,447

 
$
26,207


The Company has entered into contracts insuring the lives of certain employees who are eligible to participate in certain non-qualified pension and deferred compensation plans. These insurance contracts will be used to fund the non-qualified pension and deferred compensation arrangements. The insurance contracts are held in a trust and are available to general creditors in the event of the Company’s insolvency. Changes in cash surrender value are recorded in operating expense and were not significant in 2015 and 2014. In 2013, increases in cash surrender value totaled $1.6 million and were offset by expenses related to the non-qualified pension and deferred compensation plans funded by the insurance contracts.

Capitalized software is amortized over its estimated useful life (generally 2 to 5 years) beginning at date of implementation.

Impairment of Long-Lived Assets. The Company evaluates long-lived assets (including property and equipment, goodwill and other intangible assets) for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. Goodwill and other intangible assets not subject to amortization are also reviewed for impairment annually in the fourth quarter. There were no write-downs of long-lived assets in the periods presented.


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