þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Michigan | 38-0819050 | |
(State or other jurisdiction of incorporation or organization) | (IRS employer identification number) | |
901 44th Street SE Grand Rapids, Michigan | 49508 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered |
Class A Common Stock | New York Stock Exchange |
Page No. | ||
Part I | ||
Item 1. | ||
Item 1A. | ||
Item 1B. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Part II | ||
Item 5. | ||
Item 6. | ||
Item 7. | ||
Item 7A. | ||
Item 8. | ||
Item 9. | ||
Item 9A. | ||
Item 9B. | ||
Part III | ||
Item 10. | ||
Item 11. | ||
Item 12. | ||
Item 13. | ||
Item 14. | ||
Part IV | ||
Item 15. | ||
Item 1. | Business: |
• | Details, which researches, designs and markets worktools, personal lighting and furniture that provide healthy and productive connections between people, their technology, their workplaces and their work. |
• | Nurture by Steelcase, which is focused on healthcare environments that can help make patients more comfortable, caregivers more efficient and partners in care more receptive to healthcare delivery. Nurture brings a holistic viewpoint to healthcare environments and works with patients and healthcare professionals to develop valuable insights into environments that promote healing. |
Item 1A. | Risk Factors: |
• | translating our research regarding the world of work into innovative solutions which address market needs, |
• | continuing our expansion into adjacent markets such as smaller companies, healthcare clinical spaces and classrooms, libraries and other educational settings, |
• | growing our market share in markets such as China, India, Brazil, eastern, central and southern Europe, Africa and the Middle East, |
• | investing in acquisitions and new business ventures and |
• | developing new alliances and additional channels of distribution. |
• | differing business practices, cultural factors and regulatory requirements, |
• | fluctuations in currency exchange rates and currency controls, |
• | political, social and economic instability, natural disasters, security concerns, including terrorist activity, armed conflict and civil or military unrest, and global health issues and |
• | intellectual property protection challenges. |
• | fluctuations in the availability and quality of raw materials, |
• | the financial solvency of our suppliers and their supply chains, |
• | disruptions caused by labor activities and |
• | damage and loss of production from accidents, natural disasters and other causes. |
Item 1B. | Unresolved Staff Comments: |
Item 2. | Properties: |
Segment/Category Primarily Supported | Number of Principal Locations | Owned | Leased | ||||||
Americas | 12 | 6 | 6 | ||||||
EMEA | 5 | 4 | 1 | ||||||
Other | 4 | 2 | 2 | ||||||
Total | 21 | 12 | 9 |
Item 3. | Legal Proceedings: |
Item 4. | Mine Safety Disclosures: |
Name | Age | Position |
Sara E. Armbruster | 42 | Vice President, WorkSpace Futures and Corporate Strategy |
James P. Hackett | 57 | President and Chief Executive Officer, Director |
Nancy W. Hickey | 61 | Senior Vice President, Chief Administrative Officer |
James P. Keane | 53 | Chief Operating Officer |
Mark T. Mossing | 55 | Corporate Controller and Chief Accounting Officer |
Lizbeth S. O’Shaughnessy | 51 | Senior Vice President, Chief Legal Officer and Secretary |
David C. Sylvester | 48 | Senior Vice President, Chief Financial Officer |
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities: |
Class A Common Stock Per Share Price Range | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Fiscal 2013 | ||||||||||||||||
High | $ | 9.81 | $ | 9.82 | $ | 11.25 | $ | 13.95 | ||||||||
Low | $ | 7.96 | $ | 7.63 | $ | 9.17 | $ | 10.98 | ||||||||
Fiscal 2012 | ||||||||||||||||
High | $ | 12.12 | $ | 11.94 | $ | 8.55 | $ | 9.86 | ||||||||
Low | $ | 9.23 | $ | 6.48 | $ | 5.40 | $ | 6.45 |
Total Dividends Paid | ||||||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total | ||||||||||||||||
2013 | $ | 11.6 | $ | 11.4 | $ | 11.4 | $ | 11.4 | $ | 45.8 | ||||||||||
2012 | $ | 8.0 | $ | 8.0 | $ | 7.9 | $ | 7.8 | $ | 31.7 |
Item 6. | Selected Financial Data: |
Year Ended | ||||||||||||||||||||
Financial Highlights | February 22, 2013 | February 24, 2012 | February 25, 2011 | February 26, 2010 | February 27, 2009 | |||||||||||||||
Operating Results: | ||||||||||||||||||||
Revenue | $ | 2,868.7 | $ | 2,749.5 | $ | 2,437.1 | $ | 2,291.7 | $ | 3,183.7 | ||||||||||
Gross profit | 866.0 | 809.7 | 717.5 | 649.8 | 923.1 | |||||||||||||||
Operating income (loss) | 59.3 | 97.1 | 51.5 | (11.5 | ) | 1.0 | ||||||||||||||
Income (loss) before income tax expense (benefit) | 54.9 | 82.0 | 51.4 | (31.1 | ) | (8.8 | ) | |||||||||||||
Net income (loss) | 38.8 | 56.7 | 20.4 | (13.6 | ) | (11.7 | ) | |||||||||||||
Supplemental Operating Data: | ||||||||||||||||||||
Restructuring costs | $ | (34.7 | ) | $ | (30.5 | ) | $ | (30.6 | ) | $ | (34.9 | ) | $ | (37.9 | ) | |||||
Goodwill and intangible asset impairment charges | (59.9 | ) | — | — | — | (65.2 | ) | |||||||||||||
Variable life COLI income (loss) (1) | 3.0 | 3.2 | 10.6 | 33.1 | (41.1 | ) | ||||||||||||||
Per Share Data: | ||||||||||||||||||||
Earnings (loss) per common share | $ | 0.30 | $ | 0.43 | $ | 0.15 | $ | (0.10 | ) | $ | (0.09 | ) | ||||||||
Dividends paid per common share | $ | 0.36 | $ | 0.24 | $ | 0.16 | $ | 0.20 | $ | 0.53 | ||||||||||
Balance Sheet Data: | ||||||||||||||||||||
Cash and cash equivalents | $ | 150.4 | $ | 112.1 | $ | 142.2 | $ | 111.1 | $ | 117.6 | ||||||||||
Short-term investments | 100.5 | 79.1 | 350.8 | 68.2 | 76.0 | |||||||||||||||
Variable life COLI | 116.2 | 113.1 | 110.3 | 100.3 | 67.7 | |||||||||||||||
Working capital (2) | 293.8 | 240.2 | 275.5 | 222.9 | 246.1 | |||||||||||||||
Total assets (3) | 1,689.6 | 1,678.9 | 1,974.4 | 1,655.1 | 1,727.9 | |||||||||||||||
Total debt | 289.0 | 291.5 | 546.8 | 300.8 | 255.2 | |||||||||||||||
Total liabilities | 1,021.6 | 992.4 | 1,278.1 | 979.6 | 1,017.2 | |||||||||||||||
Total shareholders’ equity (3) | 668.0 | 686.5 | 696.3 | 675.5 | 710.7 | |||||||||||||||
Statement of Cash Flow Data: | ||||||||||||||||||||
Net cash provided by (used in): | ||||||||||||||||||||
Operating activities | $ | 187.3 | $ | 101.7 | $ | 72.7 | $ | (10.9 | ) | $ | 104.2 | |||||||||
Investing activities | (85.5 | ) | 203.2 | (254.3 | ) | (10.0 | ) | (61.1 | ) | |||||||||||
Financing activities | (64.2 | ) | (334.3 | ) | 211.1 | 13.0 | (132.2 | ) |
(1) | Variable life COLI income (loss) represents the net returns in cash surrender value, normal insurance expenses and any death benefit gains (“COLI income”) related to our investments in variable life company-owned life insurance (“COLI”) policies. In Q1 2011, we began considering our investments in variable life COLI policies to be primarily a source of corporate liquidity. As a result of this change beginning in Q1 2011, variable life COLI income has been recorded in Investment income on the Consolidated Statements of Income. See Note 9 to the consolidated financial statements for additional information. |
(2) | Working capital equals current assets minus current liabilities, as presented in the Consolidated Balance Sheets. |
(3) | During 2013, we identified errors in our accounting for deferred income taxes which relate to periods prior to 2009. We believe the errors are not material to any prior period financial statements. The correction of the errors had the effect of reducing long-term deferred income tax assets and retained earnings by $22.1 as of February 24, 2012, February 25, 2011, February 26, 2010 and February 27, 2009. The errors did not impact the Consolidated Statements of Income or the Consolidated Statements of Cash Flows for 2012, 2011, 2010 and 2009. |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations: |
Statement of Operations Data— Consolidated | Year Ended | ||||||||||||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | |||||||||||||||||||
Revenue | $ | 2,868.7 | 100.0 | % | $ | 2,749.5 | 100.0 | % | $ | 2,437.1 | 100.0 | % | |||||||||
Cost of sales | 1,987.8 | 69.3 | 1,913.6 | 69.6 | 1,693.8 | 69.5 | |||||||||||||||
Restructuring costs | 14.9 | 0.5 | 26.2 | 1.0 | 25.8 | 1.1 | |||||||||||||||
Gross profit | 866.0 | 30.2 | 809.7 | 29.4 | 717.5 | 29.4 | |||||||||||||||
Operating expenses | 727.0 | 25.3 | 708.3 | 25.8 | 661.2 | 27.1 | |||||||||||||||
Goodwill impairment charges | 59.9 | 2.1 | — | — | — | — | |||||||||||||||
Restructuring costs | 19.8 | 0.7 | 4.3 | 0.1 | 4.8 | 0.2 | |||||||||||||||
Operating income | 59.3 | 2.1 | 97.1 | 3.5 | 51.5 | 2.1 | |||||||||||||||
Interest expense, investment income and other income, net | (4.4 | ) | (0.2 | ) | (15.1 | ) | (0.5 | ) | (0.1 | ) | — | ||||||||||
Income before income tax expense | 54.9 | 1.9 | 82.0 | 3.0 | 51.4 | 2.1 | |||||||||||||||
Income tax expense | 16.1 | 0.5 | 25.3 | 0.9 | 31.0 | 1.3 | |||||||||||||||
Net income | $ | 38.8 | 1.4 | % | $ | 56.7 | 2.1 | % | $ | 20.4 | 0.8 | % | |||||||||
Earnings per share: | |||||||||||||||||||||
Basic | $ | 0.30 | $ | 0.43 | $ | 0.15 | |||||||||||||||
Diluted | $ | 0.30 | $ | 0.43 | $ | 0.15 |
Organic Revenue Growth—Consolidated | Year Ended | |||||||
February 22, 2013 | February 24, 2012 | |||||||
Prior year revenue | $ | 2,749.5 | $ | 2,437.1 | ||||
Divestitures and dealer deconsolidations | (9.6 | ) | (8.8 | ) | ||||
IDEO ownership transition | — | (103.4 | ) | |||||
Currency translation effects* | (33.9 | ) | 30.0 | |||||
Prior year revenue, adjusted | 2,706.0 | 2,354.9 | ||||||
Current year revenue | 2,868.7 | 2,749.5 | ||||||
Dealer acquisitions | (22.2 | ) | (55.7 | ) | ||||
Current year revenue, adjusted | 2,846.5 | 2,693.8 | ||||||
Organic growth $ | $ | 140.5 | $ | 338.9 | ||||
Organic growth % | 5 | % | 14 | % |
Adjusted Operating Income — Consolidated | Year Ended | ||||||||||||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | |||||||||||||||||||
Operating income | $ | 59.3 | 2.1 | % | $ | 97.1 | 3.5 | % | $ | 51.5 | 2.1 | % | |||||||||
Add: goodwill impairment charges | 59.9 | 2.1 | — | — | — | — | |||||||||||||||
Add: restructuring costs | 34.7 | 1.2 | 30.5 | 1.1 | 30.6 | 1.3 | |||||||||||||||
Adjusted operating income | $ | 153.9 | 5.4 | % | $ | 127.6 | 4.6 | % | $ | 82.1 | 3.4 | % |
• | higher variable compensation expense of $11.7 (which includes expenses associated with our EVA-based bonus programs, the Steelcase Inc. Retirement Plan and stock-based compensation), |
• | favorable foreign currency translation effects of $9.3, |
• | costs of $7.1 related to dealers acquired in 2013, |
• | increased spending of approximately $7 on product development and other initiatives, |
• | increased reserves of $3.6 for environmental remediation costs associated with a previously-owned manufacturing site, and |
• | $1.5 related to dealer divestitures. |
• | severance and business exit costs of $13.0 from the previously-announced closure of three manufacturing facilities in North America (which are now substantially complete), |
• | real estate impairment charges of $12.4 associated with the previously announced closure of our Corporate Development Center, |
• | severance and business exit costs of $3.8 associated with the EMEA headcount reductions and owned dealer consolidations in Q4 2013 and |
• | severance and business exit costs of $2.0 associated with the integration of PolyVision's global technology business into the Steelcase Education Solutions group. |
• | $36.3 related to IDEO and a small division of PolyVision, which have since been deconsolidated, |
• | favorable foreign currency translation effects of $8.6 and |
• | a gain of $13.2 from the IDEO ownership transition. |
• | higher variable compensation expense of $33.9 (which includes expenses associated with our EVA-based bonus programs, the Steelcase Inc. Retirement Plan and stock-based compensation), |
• | costs of $13.2 related to a dealer acquired in Q1 2012 and |
• | increased spending of approximately $20 on product development and other initiatives in the Americas and Asia Pacific, as well as employee and other costs in EMEA. |
• | severance and business exits costs of $17.9 from the previously-announced closure of three manufacturing facilities in North America, |
• | severance and business exit costs of $3.0 from the closure of our Morocco manufacturing facility within our EMEA segment, |
• | costs of $1.9 from the reorganization of our European manufacturing operations on the basis of specialized competencies and |
• | lease impairments of $1.7 and $1.3 in our EMEA and Americas segments, respectively. |
Interest Expense, Investment Income and Other Income, Net | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Interest expense | $ | (17.8 | ) | $ | (25.6 | ) | $ | (19.3 | ) | |||
Investment income | 3.7 | 5.2 | 14.0 | |||||||||
Other income (expense), net: | ||||||||||||
Equity in income of unconsolidated ventures | 9.4 | 8.3 | 6.3 | |||||||||
Miscellaneous, net | 0.3 | (3.0 | ) | (1.1 | ) | |||||||
Total other income, net | 9.7 | 5.3 | 5.2 | |||||||||
Total interest expense, investment income and other income, net | $ | (4.4 | ) | $ | (15.1 | ) | $ | (0.1 | ) |
Statement of Operations Data— Americas | Year Ended | ||||||||||||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | |||||||||||||||||||
Revenue | $ | 2,015.1 | 100.0 | % | $ | 1,868.4 | 100.0 | % | $ | 1,536.0 | 100.0 | % | |||||||||
Cost of sales | 1,384.4 | 68.7 | 1,302.3 | 69.7 | 1,083.2 | 70.5 | |||||||||||||||
Restructuring costs | 13.9 | 0.7 | 20.0 | 1.1 | 7.0 | 0.5 | |||||||||||||||
Gross profit | 616.8 | 30.6 | 546.1 | 29.2 | 445.8 | 29.0 | |||||||||||||||
Operating expenses | 433.8 | 21.5 | 421.8 | 22.6 | 377.2 | 24.6 | |||||||||||||||
Goodwill impairment charges | — | — | — | — | — | — | |||||||||||||||
Restructuring costs | 14.7 | 0.7 | 1.5 | — | 1.1 | — | |||||||||||||||
Operating income | $ | 168.3 | 8.4 | % | $ | 122.8 | 6.6 | % | $ | 67.5 | 4.4 | % |
Organic Revenue Growth—Americas | Year Ended | |||||||
February 22, 2013 | February 24, 2012 | |||||||
Prior year revenue | $ | 1,868.4 | $ | 1,536.0 | ||||
Divestitures and dealer deconsolidations | — | — | ||||||
Currency translation effects* | (0.6 | ) | 3.0 | |||||
Prior year revenue, adjusted | 1,867.8 | 1,539.0 | ||||||
Current year revenue | 2,015.1 | 1,868.4 | ||||||
Dealer acquisitions | (10.5 | ) | (55.7 | ) | ||||
Current year revenue, adjusted | 2,004.6 | 1,812.7 | ||||||
Organic growth $ | $ | 136.8 | $ | 273.7 | ||||
Organic growth % | 7 | % | 18 | % |
Adjusted Operating Income—Americas | Year Ended | ||||||||||||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | |||||||||||||||||||
Operating income | $ | 168.3 | 8.4 | % | $ | 122.8 | 6.6 | % | $ | 67.5 | 4.4 | % | |||||||||
Add: goodwill impairment charges | — | — | — | — | — | — | |||||||||||||||
Add: restructuring costs | 28.6 | 1.4 | 21.5 | 1.1 | 8.1 | 0.5 | |||||||||||||||
Adjusted operating income | $ | 196.9 | 9.8 | % | $ | 144.3 | 7.7 | % | $ | 75.6 | 4.9 | % |
• | Product categories—Substantially all product categories grew in 2013. Revenue growth rates were strongest in the Technology and Details categories, while Seating and Coalesse also exceeded the overall average for the year. |
• | Vertical markets—Strength in the Energy, Insurance Services, Manufacturing and Information Technology sectors more than offset continued weakness in the U.S. Federal Government sector. |
• | Geographic regions—All regions showed growth over 2012, with notable strength in the West Business Group. |
• | Contract type—The strongest growth came from our project related sales, but revenue from continuing agreements and marketing programs also grew over the prior year. |
• | Product categories—All product categories grew in 2012. Revenue growth rates were strongest in the Technology category. Details and Turnstone also showed strength relative to the other product categories. Our two largest categories, Furniture and Seating, were in line with the overall average for the year. Coalesse, Wood and Nurture were below the average for the year but still grew at double-digit rates. |
• | Vertical markets—Other than State and Local Government, all major vertical markets grew with notable strength in the Information Technology, Technical/Professional and Financial Services sectors. Healthcare and Education revenue growth was in line with the average. Insurance and Federal Government were below average but still grew nicely year over year. |
• | Geographic regions—All regions showed growth over 2011, with notable strength in the Central and New York regions of the U.S. |
• | Contract type—The strongest growth came from our marketing programs targeted toward small to medium-sized businesses, but project and continuing business also grew at strong double-digit rates. |
• | higher variable compensation expense of $27.1 (which includes expenses associated with our EVA-based bonus programs, the Steelcase Inc. Retirement Plan and stock-based compensation), |
• | incremental costs of $13.2 related to a dealer acquired in Q1 2012 and |
• | increased spending on product development and other initiatives. |
Statement of Operations Data—EMEA | Year Ended | ||||||||||||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | |||||||||||||||||||
Revenue | $ | 594.8 | 100.0 | % | $ | 610.5 | 100.0 | % | $ | 555.8 | 100.0 | % | |||||||||
Cost of sales | 434.0 | 73.0 | 432.9 | 70.9 | 395.7 | 71.2 | |||||||||||||||
Restructuring costs | 1.0 | 0.2 | 5.0 | 0.8 | 18.7 | 3.4 | |||||||||||||||
Gross profit | 159.8 | 26.8 | 172.6 | 28.3 | 141.4 | 25.4 | |||||||||||||||
Operating expenses | 171.6 | 28.8 | 179.5 | 29.4 | 159.9 | 28.8 | |||||||||||||||
Goodwill impairment charges | 35.1 | 5.9 | — | — | — | — | |||||||||||||||
Restructuring costs | 4.0 | 0.7 | 3.0 | 0.5 | 0.4 | — | |||||||||||||||
Operating loss | $ | (50.9 | ) | (8.6 | )% | $ | (9.9 | ) | (1.6 | )% | $ | (18.9 | ) | (3.4 | )% |
Organic Revenue Growth—EMEA | Year Ended | |||||||
February 22, 2013 | February 24, 2012 | |||||||
Prior year revenue | $ | 610.5 | $ | 555.8 | ||||
Divestitures | (1.0 | ) | — | |||||
Currency translation effects* | (33.4 | ) | 22.0 | |||||
Prior year revenue, adjusted | 576.1 | 577.8 | ||||||
Current year revenue | 594.8 | 610.5 | ||||||
Dealer acquisitions | (11.7 | ) | — | |||||
Current year revenue, adjusted | 583.1 | 610.5 | ||||||
Organic growth $ | $ | 7.0 | $ | 32.7 | ||||
Organic growth % | 1 | % | 6 | % |
Adjusted Operating Income (Loss)—EMEA | Year Ended | ||||||||||||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | |||||||||||||||||||
Operating loss | $ | (50.9 | ) | (8.6 | )% | $ | (9.9 | ) | (1.6 | )% | $ | (18.9 | ) | (3.4 | )% | ||||||
Add: goodwill impairment charges | 35.1 | 5.9 | — | — | — | — | |||||||||||||||
Add: restructuring costs | 5.0 | 0.9 | 8.0 | 1.3 | 19.1 | 3.4 | |||||||||||||||
Adjusted operating income (loss) | $ | (10.8 | ) | (1.8 | )% | $ | (1.9 | ) | (0.3 | )% | $ | 0.2 | — | % |
Statement of Operations Data—Other | Year Ended | ||||||||||||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | |||||||||||||||||||
Revenue | $ | 258.8 | 100.0 | % | $ | 270.6 | 100.0 | % | $ | 345.3 | 100.0 | % | |||||||||
Cost of sales | 169.4 | 65.5 | 178.4 | 65.9 | 214.9 | 62.2 | |||||||||||||||
Restructuring costs | — | — | 1.2 | 0.4 | 0.1 | — | |||||||||||||||
Gross profit | 89.4 | 34.5 | 91.0 | 33.7 | 130.3 | 37.8 | |||||||||||||||
Operating expenses | 83.6 | 32.3 | 76.6 | 28.3 | 110.0 | 31.9 | |||||||||||||||
Goodwill impairment charges | 24.8 | 9.6 | — | — | — | — | |||||||||||||||
Restructuring costs | 1.1 | 0.4 | (0.2 | ) | — | 3.3 | 1.0 | ||||||||||||||
Operating income (loss) | $ | (20.1 | ) | (7.8 | )% | $ | 14.6 | 5.4 | % | $ | 17.0 | 4.9 | % |
Organic Revenue Growth—Other | Year Ended | |||||||
February 22, 2013 | February 24, 2012 | |||||||
Prior year revenue | $ | 270.6 | $ | 345.3 | ||||
Divestitures | (8.6 | ) | (8.8 | ) | ||||
IDEO ownership transition | — | (103.4 | ) | |||||
Currency translation effects* | 0.1 | 5.0 | ||||||
Prior year revenue, adjusted | 262.1 | 238.1 | ||||||
Current year revenue | 258.8 | 270.6 | ||||||
Organic growth (decline) $ | $ | (3.3 | ) | $ | 32.5 | |||
Organic growth (decline) % | (1 | )% | 14 | % |
Adjusted Operating Income—Other | Year Ended | ||||||||||||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | |||||||||||||||||||
Operating income (loss) | $ | (20.1 | ) | (7.8 | )% | $ | 14.6 | 5.4 | % | $ | 17.0 | 4.9 | % | ||||||||
Add: goodwill impairment charges | 24.8 | 9.6 | — | — | — | — | |||||||||||||||
Add: restructuring costs | 1.1 | 0.4 | 1.0 | 0.4 | 3.4 | 1.0 | |||||||||||||||
Adjusted operating income | $ | 5.8 | 2.2 | % | $ | 15.6 | 5.8 | % | $ | 20.4 | 5.9 | % |
Statement of Operations Data—Corporate | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Operating expenses | $ | 38.0 | $ | 30.4 | $ | 14.1 |
Primary Liquidity Sources | February 22, 2013 | February 24, 2012 | ||||||
Cash and cash equivalents | $ | 150.4 | $ | 112.1 | ||||
Short-term investments | 100.5 | 79.1 | ||||||
Variable life company-owned life insurance | 116.2 | 113.1 | ||||||
Availability under credit facilities | 174.2 | 174.2 | ||||||
Total liquidity | $ | 541.3 | $ | 478.5 |
Cash Flow Data | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Net cash flow provided by (used in): | ||||||||||||
Operating activities | $ | 187.3 | $ | 101.7 | $ | 72.7 | ||||||
Investing activities | (85.5 | ) | 203.2 | (254.3 | ) | |||||||
Financing activities | (64.2 | ) | (334.3 | ) | 211.1 | |||||||
Effect of exchange rate changes on cash and cash equivalents | 0.7 | (0.7 | ) | 1.6 | ||||||||
Net increase (decrease) in cash and cash equivalents | 38.3 | (30.1 | ) | 31.1 | ||||||||
Cash and cash equivalents, beginning of period | 112.1 | 142.2 | 111.1 | |||||||||
Cash and cash equivalents, end of period | $ | 150.4 | $ | 112.1 | $ | 142.2 |
Cash Flow Data—Operating Activities | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Net income | $ | 38.8 | $ | 56.7 | $ | 20.4 | ||||||
Depreciation and amortization | 58.3 | 56.4 | 64.4 | |||||||||
Changes in cash surrender value of COLI | 1.8 | (4.5 | ) | (13.5 | ) | |||||||
Goodwill impairment charges | 59.9 | — | — | |||||||||
Deferred income taxes | (3.0 | ) | 13.6 | 11.3 | ||||||||
Changes in accounts receivable, inventories and accounts payable, net of acquisitions, divestitures and deconsolidations | (7.3 | ) | (11.1 | ) | (59.5 | ) | ||||||
Changes in employee compensation liabilities | 5.8 | (32.5 | ) | 3.4 | ||||||||
Changes in other operating assets and liabilities, net of acquisitions, divestitures and deconsolidations | (9.1 | ) | (23.1 | ) | 29.6 | |||||||
Other | 42.1 | 46.2 | 16.6 | |||||||||
Net cash provided by operating activities | $ | 187.3 | $ | 101.7 | $ | 72.7 |
Cash Flow Data—Investing Activities | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Capital expenditures | $ | (74.0 | ) | $ | (64.9 | ) | $ | (46.0 | ) | |||
Proceeds from disposal of fixed assets | 15.5 | 11.7 | 44.9 | |||||||||
Purchases of investments | (78.6 | ) | (195.8 | ) | (335.4 | ) | ||||||
Liquidations of investments | 62.6 | 466.1 | 59.0 | |||||||||
Proceeds from IDEO ownership transition | — | — | 29.8 | |||||||||
Acquisitions, net of cash acquired | (6.2 | ) | (20.9 | ) | — | |||||||
Other | (4.8 | ) | 7.0 | (6.6 | ) | |||||||
Net cash provided by (used in) investing activities | $ | (85.5 | ) | $ | 203.2 | $ | (254.3 | ) |
Cash Flow Data—Financing Activities | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Borrowings (repayments) of short-term and long-term debt, net | $ | (2.3 | ) | $ | (256.0 | ) | $ | 243.1 | ||||
Dividends paid | (45.8 | ) | (31.7 | ) | (21.6 | ) | ||||||
Common stock repurchases | (19.9 | ) | (47.7 | ) | (10.8 | ) | ||||||
Other | 3.8 | 1.1 | 0.4 | |||||||||
Net cash provided by (used in) financing activities | $ | (64.2 | ) | $ | (334.3 | ) | $ | 211.1 |
Contractual Obligations | Payments Due by Period | |||||||||||||||||||
Total | Less than 1 Year | 1-3 Years | 3-5 Years | After 5 Years | ||||||||||||||||
Long-term debt and short-term borrowings | $ | 289.0 | $ | 2.6 | $ | 4.8 | $ | 31.4 | $ | 250.2 | ||||||||||
Estimated interest on debt obligations | 132.1 | 17.3 | 34.6 | 32.4 | 47.8 | |||||||||||||||
Operating leases | 141.6 | 42.7 | 58.2 | 26.3 | 14.4 | |||||||||||||||
Committed capital expenditures | 22.2 | 22.2 | — | — | — | |||||||||||||||
Purchase obligations | 52.8 | 34.8 | 14.1 | 3.9 | — | |||||||||||||||
Other liabilities | 1.9 | 1.9 | — | — | — | |||||||||||||||
Employee benefit and compensation obligations | 264.7 | 91.6 | 51.9 | 34.1 | 87.1 | |||||||||||||||
Total | $ | 904.3 | $ | 213.1 | $ | 163.6 | $ | 128.1 | $ | 399.5 |
Liquidity Facilities | February 22, 2013 | ||
Global committed bank facility | $ | 125.0 | |
Various uncommitted lines | 49.2 | ||
Total credit lines available | 174.2 | ||
Less: borrowings outstanding | — | ||
Available capacity | $ | 174.2 |
Reportable Segment | Goodwill | Other Intangible Assets, Net | ||||||
Americas | $ | 90.4 | $ | 10.1 | ||||
EMEA | — | 2.5 | ||||||
Other category | 31.0 | 6.6 | ||||||
Total | $ | 121.4 | $ | 19.2 |
Reportable Segment | Enterprise Value Available in Excess of Goodwill | ||
Americas | $ | 931.0 | |
Other category | 75.0 |
Reportable Segment | Enterprise Value Available in Excess of Goodwill | ||
Americas | $ | 787.0 | |
Other category | 58.0 |
Defined Benefit Pension Plans | Post-Retirement Plans | |||||||||||||||
February 22, 2013 | February 24, 2012 | February 22, 2013 | February 24, 2012 | |||||||||||||
Benefit plan obligations | $ | 101.7 | $ | 95.0 | $ | 77.3 | $ | 90.9 | ||||||||
Fair value of plan assets | 50.2 | 49.1 | — | — | ||||||||||||
Funded status | $ | (51.5 | ) | $ | (45.9 | ) | $ | (77.3 | ) | $ | (90.9 | ) |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk: |
Item 8. | Financial Statements and Supplementary Data: |
/s/ Deloitte & Touche LLP | |
DELOITTE & TOUCHE LLP | |
Grand Rapids, Michigan | |
April 19, 2013 |
/s/ Deloitte & Touche LLP | |
DELOITTE & TOUCHE LLP | |
Grand Rapids, Michigan | |
April 19, 2013 |
Year Ended | ||||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Revenue | $ | 2,868.7 | $ | 2,749.5 | $ | 2,437.1 | ||||||
Cost of sales | 1,987.8 | 1,913.6 | 1,693.8 | |||||||||
Restructuring costs | 14.9 | 26.2 | 25.8 | |||||||||
Gross profit | 866.0 | 809.7 | 717.5 | |||||||||
Operating expenses | 727.0 | 708.3 | 661.2 | |||||||||
Goodwill impairment charges | 59.9 | — | — | |||||||||
Restructuring costs | 19.8 | 4.3 | 4.8 | |||||||||
Operating income | 59.3 | 97.1 | 51.5 | |||||||||
Interest expense | (17.8 | ) | (25.6 | ) | (19.3 | ) | ||||||
Investment income | 3.7 | 5.2 | 14.0 | |||||||||
Other income, net | 9.7 | 5.3 | 5.2 | |||||||||
Income before income tax expense | 54.9 | 82.0 | 51.4 | |||||||||
Income tax expense | 16.1 | 25.3 | 31.0 | |||||||||
Net income | $ | 38.8 | $ | 56.7 | $ | 20.4 | ||||||
Earnings per share: | ||||||||||||
Basic | $ | 0.30 | $ | 0.43 | $ | 0.15 | ||||||
Diluted | $ | 0.30 | $ | 0.43 | $ | 0.15 | ||||||
Dividends declared and paid per common share | $ | 0.36 | $ | 0.24 | $ | 0.16 |
Year Ended | ||||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Net income | $ | 38.8 | $ | 56.7 | $ | 20.4 | ||||||
Other comprehensive income (loss), gross: | ||||||||||||
Unrealized gain (loss) on investments | 2.5 | (0.7 | ) | 3.2 | ||||||||
Minimum pension liability | — | 0.5 | 15.9 | |||||||||
Derivative adjustments | — | (0.2 | ) | (0.6 | ) | |||||||
Foreign currency translation adjustments | (5.8 | ) | 0.8 | 5.6 | ||||||||
Total other comprehensive income (loss), gross | $ | (3.3 | ) | $ | 0.4 | $ | 24.1 | |||||
Other comprehensive income (loss), tax (expense) benefit: | ||||||||||||
Unrealized gain (loss) on investments | (0.9 | ) | 0.3 | (1.2 | ) | |||||||
Minimum pension liability | (0.8 | ) | (0.6 | ) | (4.6 | ) | ||||||
Derivative adjustments | — | 0.1 | 0.2 | |||||||||
Foreign currency translation adjustments | — | — | — | |||||||||
Total other comprehensive income (loss), tax (expense) benefit | $ | (1.7 | ) | $ | (0.2 | ) | $ | (5.6 | ) | |||
Other comprehensive income (loss), net: | ||||||||||||
Unrealized gain (loss) on investments | 1.6 | (0.4 | ) | 2.0 | ||||||||
Minimum pension liability | (0.8 | ) | (0.1 | ) | 11.3 | |||||||
Derivative adjustments | — | (0.1 | ) | (0.4 | ) | |||||||
Foreign currency translation adjustments | (5.8 | ) | 0.8 | 5.6 | ||||||||
Total other comprehensive income (loss), net | $ | (5.0 | ) | $ | 0.2 | $ | 18.5 | |||||
Comprehensive income | $ | 33.8 | $ | 56.9 | $ | 38.9 | ||||||
Accumulated other comprehensive income (loss): | ||||||||||||
Unrealized gain (loss) on investments | $ | 0.6 | $ | (1.0 | ) | $ | (0.6 | ) | ||||
Minimum pension liability | 18.9 | 19.7 | 19.8 | |||||||||
Derivative adjustments | (0.1 | ) | (0.1 | ) | — | |||||||
Foreign currency translation adjustments | (23.6 | ) | (17.8 | ) | (18.6 | ) | ||||||
Total accumulated other comprehensive income (loss) | $ | (4.2 | ) | $ | 0.8 | $ | 0.6 |
February 22, 2013 | February 24, 2012 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 150.4 | $ | 112.1 | ||||
Short-term investments | 100.5 | 79.1 | ||||||
Accounts receivable, net of allowances of $14.5 and $19.6 | 287.3 | 271.4 | ||||||
Inventories | 137.5 | 139.5 | ||||||
Deferred income taxes | 56.2 | 42.4 | ||||||
Prepaid expenses | 17.9 | 17.5 | ||||||
Other current assets | 28.8 | 40.1 | ||||||
Total current assets | 778.6 | 702.1 | ||||||
Property, plant and equipment, net of accumulated depreciation of $1,221.4 and $1,215.3 | 353.2 | 346.9 | ||||||
Company-owned life insurance | 225.8 | 227.6 | ||||||
Deferred income taxes | 101.7 | 110.4 | ||||||
Goodwill | 121.4 | 176.6 | ||||||
Other intangible assets, net of accumulated amortization of $46.6 and $60.2 | 19.2 | 18.8 | ||||||
Investments in unconsolidated affiliates | 53.3 | 47.7 | ||||||
Other assets | 36.4 | 48.8 | ||||||
Total assets | $ | 1,689.6 | $ | 1,678.9 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 198.6 | $ | 191.3 | ||||
Short-term borrowings and current portion of long-term debt | 2.6 | 2.6 | ||||||
Accrued expenses | ||||||||
Employee compensation | 129.4 | 123.0 | ||||||
Employee benefit plan obligations | 23.8 | 22.6 | ||||||
Customer deposits | 13.5 | 15.0 | ||||||
Product warranties | 14.1 | 14.0 | ||||||
Other | 102.8 | 93.4 | ||||||
Total current liabilities | 484.8 | 461.9 | ||||||
Long-term liabilities: | ||||||||
Long-term debt less current maturities | 286.4 | 288.9 | ||||||
Employee benefit plan obligations | 158.0 | 161.1 | ||||||
Other long-term liabilities | 92.4 | 80.5 | ||||||
Total long-term liabilities | 536.8 | 530.5 | ||||||
Total liabilities | 1,021.6 | 992.4 | ||||||
Shareholders’ equity: | ||||||||
Preferred stock-no par value; 50,000,000 shares authorized, none issued and outstanding | — | — | ||||||
Class A common stock-no par value; 475,000,000 shares authorized, 86,010,584 and 85,260,736 issued and outstanding | — | 1.1 | ||||||
Class B common stock-no par value; 475,000,000 shares authorized, 39,154,003 and 41,228,593 issued and outstanding | — | — | ||||||
Additional paid-in capital | 27.2 | 32.6 | ||||||
Accumulated other comprehensive income (loss) | (4.2 | ) | 0.8 | |||||
Retained earnings | 645.0 | 652.0 | ||||||
Total shareholders’ equity | 668.0 | 686.5 | ||||||
Total liabilities and shareholders’ equity | $ | 1,689.6 | $ | 1,678.9 |
Common Shares Outstanding | Class A Common Stock | Class B Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Shareholders’ Equity | ||||||||||||||||||||||
February 26, 2010 | 132,963,211 | $ | 57.0 | $ | — | $ | 8.2 | $ | (17.9 | ) | $ | 628.2 | $ | 675.5 | ||||||||||||||
Common stock issuance | 41,720 | 0.3 | 0.3 | |||||||||||||||||||||||||
Common stock repurchases | (1,001,590 | ) | (10.8 | ) | (10.8 | ) | ||||||||||||||||||||||
Tax effect of exercise of stock awards | 0.4 | 0.4 | ||||||||||||||||||||||||||
Stock compensation related to IDEO ownership transition | 6.5 | 6.5 | ||||||||||||||||||||||||||
Restricted stock expense | 0.1 | 0.1 | ||||||||||||||||||||||||||
Restricted stock units converted to common stock | 231,227 | 1.9 | (1.9 | ) | — | |||||||||||||||||||||||
Performance share, performance units and restricted stock units expense | 7.0 | 7.0 | ||||||||||||||||||||||||||
Other comprehensive income | 18.5 | 18.5 | ||||||||||||||||||||||||||
Dividends paid ($0.16 per share) | (21.6 | ) | (21.6 | ) | ||||||||||||||||||||||||
Net income | 20.4 | 20.4 | ||||||||||||||||||||||||||
February 25, 2011 | 132,234,568 | $ | 48.5 | $ | — | $ | 20.2 | $ | 0.6 | $ | 627.0 | $ | 696.3 | |||||||||||||||
Common stock issuance | 38,888 | 0.3 | 0.3 | |||||||||||||||||||||||||
Common stock repurchases | (5,802,293 | ) | (47.7 | ) | (47.7 | ) | ||||||||||||||||||||||
Tax effect of exercise of stock awards | 1.1 | 1.1 | ||||||||||||||||||||||||||
Restricted stock units issued as common stock | 18,166 | |||||||||||||||||||||||||||
Performance units and restricted stock units expense | 11.3 | 11.3 | ||||||||||||||||||||||||||
Other comprehensive income | 0.2 | 0.2 | ||||||||||||||||||||||||||
Dividends paid ($0.24 per share) | (31.7 | ) | (31.7 | ) | ||||||||||||||||||||||||
Net income | 56.7 | 56.7 | ||||||||||||||||||||||||||
February 24, 2012 | 126,489,329 | $ | 1.1 | $ | — | $ | 32.6 | $ | 0.8 | $ | 652.0 | $ | 686.5 | |||||||||||||||
Common stock issuance | 43,238 | 0.3 | 0.3 | |||||||||||||||||||||||||
Common stock repurchases | (2,346,590 | ) | (1.1 | ) | (18.8 | ) | (19.9 | ) | ||||||||||||||||||||
Tax effect of exercise of stock awards | 3.8 | 3.8 | ||||||||||||||||||||||||||
Performance units issued as common stock | 763,425 | |||||||||||||||||||||||||||
Restricted stock units issued as common stock | 215,185 | |||||||||||||||||||||||||||
Performance units and restricted stock units expense | 9.3 | 9.3 | ||||||||||||||||||||||||||
Other comprehensive income (loss) | (5.0 | ) | (5.0 | ) | ||||||||||||||||||||||||
Dividends paid ($0.36 per share) | (45.8 | ) | (45.8 | ) | ||||||||||||||||||||||||
Net income | 38.8 | 38.8 | ||||||||||||||||||||||||||
February 22, 2013 | 125,164,587 | $ | — | $ | — | $ | 27.2 | $ | (4.2 | ) | $ | 645.0 | $ | 668.0 |
Year Ended | ||||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
OPERATING ACTIVITIES | ||||||||||||
Net income | $ | 38.8 | $ | 56.7 | $ | 20.4 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 58.3 | 56.4 | 64.4 | |||||||||
Changes in cash surrender value of COLI | 1.8 | (4.5 | ) | (13.5 | ) | |||||||
Goodwill impairment charges | 59.9 | — | — | |||||||||
Loss (gain) on disposal of fixed assets | 1.6 | 4.6 | (5.7 | ) | ||||||||
Gain from IDEO ownership transition | — | — | (13.2 | ) | ||||||||
Deferred income taxes | (3.0 | ) | 13.6 | 11.3 | ||||||||
Pension and post-retirement plans cost (benefit) | 1.0 | (0.9 | ) | 4.0 | ||||||||
Restructuring costs | 34.7 | 30.5 | 30.6 | |||||||||
Non-cash stock compensation | 9.6 | 11.6 | 7.4 | |||||||||
Other | (4.8 | ) | 0.4 | (6.5 | ) | |||||||
Changes in operating assets and liabilities, net of acquisitions, divestitures and deconsolidations: | ||||||||||||
Accounts receivable | (12.8 | ) | 8.0 | (65.2 | ) | |||||||
Inventories | 2.1 | (17.1 | ) | (28.5 | ) | |||||||
Other assets | 2.4 | 7.3 | 10.9 | |||||||||
Accounts payable | 3.4 | (2.0 | ) | 34.2 | ||||||||
Employee compensation liabilities | 5.8 | (32.5 | ) | 3.4 | ||||||||
Employee benefit obligations | (2.9 | ) | (0.4 | ) | (23.0 | ) | ||||||
Accrued expenses and other liabilities | (8.6 | ) | (30.0 | ) | 41.7 | |||||||
Net cash provided by operating activities | 187.3 | 101.7 | 72.7 | |||||||||
INVESTING ACTIVITIES | ||||||||||||
Capital expenditures | (74.0 | ) | (64.9 | ) | (46.0 | ) | ||||||
Proceeds from disposal of fixed assets | 15.5 | 11.7 | 44.9 | |||||||||
Purchases of investments | (78.6 | ) | (195.8 | ) | (335.4 | ) | ||||||
Liquidations of investments | 62.6 | 466.1 | 59.0 | |||||||||
Proceeds from IDEO ownership transition | — | — | 29.8 | |||||||||
Acquisitions, net of cash acquired | (6.2 | ) | (20.9 | ) | — | |||||||
Other | (4.8 | ) | 7.0 | (6.6 | ) | |||||||
Net cash provided by (used in) investing activities | (85.5 | ) | 203.2 | (254.3 | ) | |||||||
FINANCING ACTIVITIES | ||||||||||||
Dividends paid | (45.8 | ) | (31.7 | ) | (21.6 | ) | ||||||
Common stock repurchases | (19.9 | ) | (47.7 | ) | (10.8 | ) | ||||||
Excess tax benefit from vesting of stock awards | 3.8 | 1.1 | 0.4 | |||||||||
Borrowings of long-term debt, net of issuance costs | 0.3 | 0.2 | 247.4 | |||||||||
Repayments of long-term debt | (2.6 | ) | (255.5 | ) | (2.8 | ) | ||||||
Borrowings of lines of credit | 1.5 | — | 0.2 | |||||||||
Repayments of lines of credit | (1.5 | ) | (0.7 | ) | (1.7 | ) | ||||||
Net cash provided by (used in) financing activities | (64.2 | ) | (334.3 | ) | 211.1 | |||||||
Effect of exchange rate changes on cash and cash equivalents | 0.7 | (0.7 | ) | 1.6 | ||||||||
Net increase (decrease) in cash and cash equivalents | 38.3 | (30.1 | ) | 31.1 | ||||||||
Cash and cash equivalents, beginning of period | 112.1 | 142.2 | 111.1 | |||||||||
Cash and cash equivalents, end of period | $ | 150.4 | $ | 112.1 | $ | 142.2 | ||||||
Supplemental Cash Flow Information: | ||||||||||||
Income taxes paid, net of refunds received | $ | 9.4 | $ | 10.7 | $ | (2.3 | ) | |||||
Interest paid, net of amounts capitalized | $ | 17.4 | $ | 26.2 | $ | 17.7 |
1. | NATURE OF OPERATIONS |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Roll-Forward of Accrued Liability for Product Warranties | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Balance as of beginning of period | $ | 29.9 | $ | 31.3 | $ | 22.1 | ||||||
Accruals related to product warranties, recalls and retrofits | 10.7 | 11.1 | 17.5 | |||||||||
Adjustments related to changes in estimates | (0.3 | ) | 1.9 | 6.0 | ||||||||
Reductions for settlements | (9.4 | ) | (14.4 | ) | (14.3 | ) | ||||||
Currency translation adjustments | 0.2 | — | — | |||||||||
Balance as of end of period | $ | 31.1 | $ | 29.9 | $ | 31.3 |
Consolidated Balance Sheets | February 22, 2013 | February 24, 2012 | ||||||
Other current assets | $ | 1.3 | $ | 0.9 | ||||
Accrued expenses | (1.9 | ) | (2.1 | ) | ||||
Total net fair value of derivative instruments (1) | $ | (0.6 | ) | $ | (1.2 | ) |
(1) | The notional amounts of the outstanding foreign exchange forward contracts were $115.0 as of February 22, 2013 and $115.2 as of February 24, 2012. |
Gain (Loss) Recognized in Consolidated Statements of Income | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Cost of sales | $ | 0.2 | $ | 0.3 | $ | (0.8 | ) | |||||
Operating expenses | 0.1 | 0.1 | 0.1 | |||||||||
Other income, net | (0.5 | ) | 4.8 | (1.8 | ) | |||||||
Total net gains (losses) | $ | (0.2 | ) | $ | 5.2 | $ | (2.5 | ) |
3. | NEW ACCOUNTING STANDARDS |
4. | CORRECTION OF PRIOR PERIOD FINANCIAL STATEMENTS |
5. | EARNINGS PER SHARE |
Computation of Earnings per Share | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Net income | $ | 38.8 | $ | 56.7 | $ | 20.4 | ||||||
Adjustment for earnings attributable to participating securities | (0.6 | ) | (1.0 | ) | (0.3 | ) | ||||||
Net income used in calculating earnings per share | $ | 38.2 | $ | 55.7 | $ | 20.1 | ||||||
Weighted-average common shares outstanding including participating securities (in millions) | 127.4 | 131.9 | 132.9 | |||||||||
Adjustment for participating securities (in millions) | (1.8 | ) | (2.3 | ) | (2.0 | ) | ||||||
Shares used in calculating basic earnings per share (in millions) | 125.6 | 129.6 | 130.9 | |||||||||
Effect of dilutive stock-based compensation (in millions) | 1.7 | — | — | |||||||||
Shares used in calculating diluted earnings per share (in millions) | 127.3 | 129.6 | 130.9 | |||||||||
Earnings per share: | ||||||||||||
Basic | $ | 0.30 | $ | 0.43 | $ | 0.15 | ||||||
Diluted | $ | 0.30 | $ | 0.43 | $ | 0.15 | ||||||
Total common shares outstanding at period end (in millions) | 125.2 | 126.5 | 132.2 | |||||||||
Anti-dilutive options and performance units excluded from computation of diluted earnings per share (in millions) | — | 3.5 | 3.3 |
6. | FAIR VALUE |
Fair Value of Financial Instruments | February 22, 2013 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Cash and cash equivalents | $ | 150.4 | $ | — | $ | — | $ | 150.4 | ||||||||
Restricted cash | 3.5 | — | — | 3.5 | ||||||||||||
Managed investment portfolio and other investments | ||||||||||||||||
Corporate debt securities | — | 30.3 | — | 30.3 | ||||||||||||
U.S. agency debt securities | — | 44.1 | — | 44.1 | ||||||||||||
U.S. government debt securities | 4.4 | — | — | 4.4 | ||||||||||||
Asset backed securities | — | 5.5 | — | 5.5 | ||||||||||||
Municipal debt securities | — | 14.1 | — | 14.1 | ||||||||||||
Other investments | — | 2.1 | — | 2.1 | ||||||||||||
Foreign exchange forward contracts | — | 1.3 | — | 1.3 | ||||||||||||
Auction rate securities | — | — | 9.8 | 9.8 | ||||||||||||
Canadian asset-backed commercial paper restructuring notes | — | — | 3.5 | 3.5 | ||||||||||||
$ | 158.3 | $ | 97.4 | $ | 13.3 | $ | 269.0 | |||||||||
Liabilities: | ||||||||||||||||
Foreign exchange forward contracts | $ | — | $ | (1.9 | ) | $ | — | $ | (1.9 | ) | ||||||
$ | — | $ | (1.9 | ) | $ | — | $ | (1.9 | ) | |||||||
Fair Value of Financial Instruments | February 24, 2012 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Cash and cash equivalents | $ | 112.1 | $ | — | $ | — | $ | 112.1 | ||||||||
Restricted cash | 3.5 | — | — | 3.5 | ||||||||||||
Managed investment portfolio and other investments | ||||||||||||||||
Corporate debt securities | — | 47.8 | — | 47.8 | ||||||||||||
U.S. agency debt securities | — | 27.7 | — | 27.7 | ||||||||||||
U.S. government debt securities | 1.5 | — | — | 1.5 | ||||||||||||
Asset backed securities | — | 0.9 | — | 0.9 | ||||||||||||
Municipal debt securities | — | 0.9 | — | 0.9 | ||||||||||||
Other investments | — | 0.3 | — | 0.3 | ||||||||||||
Foreign exchange forward contracts | — | 0.9 | — | 0.9 | ||||||||||||
Auction rate securities | — | — | 12.9 | 12.9 | ||||||||||||
Canadian asset-backed commercial paper restructuring notes | — | — | 4.1 | 4.1 | ||||||||||||
$ | 117.1 | $ | 78.5 | $ | 17.0 | $ | 212.6 | |||||||||
Liabilities: | ||||||||||||||||
Foreign exchange forward contracts | $ | — | $ | (2.1 | ) | $ | — | $ | (2.1 | ) | ||||||
$ | — | $ | (2.1 | ) | $ | — | $ | (2.1 | ) |
Roll-forward of Fair Value Using Level 3 Inputs | Auction Rate Securities | Canadian Asset-Backed Commercial Paper | ||||||
Balance as of February 25, 2011 | $ | 13.8 | $ | 4.2 | ||||
Unrealized loss on investments | (0.6 | ) | — | |||||
Other-than-temporary impairments | (0.3 | ) | — | |||||
Currency translation adjustment | — | (0.1 | ) | |||||
Balance as of February 24, 2012 | $ | 12.9 | $ | 4.1 | ||||
Unrealized gain on investments | 1.9 | — | ||||||
Sale of investments | (5.0 | ) | — | |||||
Maturities of investments | — | (0.5 | ) | |||||
Other-than-temporary impairments | — | — | ||||||
Currency translation adjustment | — | (0.1 | ) | |||||
Balance as of February 22, 2013 | $ | 9.8 | $ | 3.5 |
7. | INVENTORIES |
Inventories | February 22, 2013 | February 24, 2012 | ||||||
Raw materials | $ | 58.7 | $ | 59.1 | ||||
Work in process | 13.2 | 18.2 | ||||||
Finished goods | 87.0 | 84.0 | ||||||
158.9 | 161.3 | |||||||
Less: LIFO reserve | 21.4 | 21.8 | ||||||
$ | 137.5 | $ | 139.5 |
8. | PROPERTY, PLANT AND EQUIPMENT |
Property, Plant and Equipment | Estimated Useful Lives (Years) | February 22, 2013 | February 24, 2012 | |||||||
Land | $ | 38.6 | $ | 39.0 | ||||||
Buildings and improvements | 10 – 40 | 526.3 | 493.3 | |||||||
Machinery and equipment | 3 – 15 | 715.4 | 746.2 | |||||||
Furniture and fixtures | 5 – 8 | 68.0 | 69.7 | |||||||
Leasehold improvements | 3 – 10 | 53.0 | 56.5 | |||||||
Capitalized software | 3 – 10 | 139.0 | 140.4 | |||||||
Construction in progress | 34.3 | 17.1 | ||||||||
1,574.6 | 1,562.2 | |||||||||
Accumulated depreciation | (1,221.4 | ) | (1,215.3 | ) | ||||||
$ | 353.2 | $ | 346.9 |
9. | COMPANY-OWNED LIFE INSURANCE |
Type | Ability to Choose Investments | Net Return | Target Asset Allocation as of February 22, 2013 | Net Cash Surrender Value | |||||||
February 22, 2013 | February 24, 2012 | ||||||||||
Whole life COLI policies | No ability | A rate of return set periodically by the insurance companies | Not applicable | $ | 109.6 | $ | 114.5 | ||||
Variable life COLI policies | Can allocate across a set of choices provided by the insurance companies | Fluctuates depending on performance of underlying investments | 100% fixed income | 116.2 | 113.1 | ||||||
$ | 225.8 | $ | 227.6 |
COLI Income | Whole Life Policies | Variable Life Policies | Total | |||||||||
2013 | ||||||||||||
Cost of sales | $ | 1.2 | $ | — | $ | 1.2 | ||||||
Operating expenses | 4.6 | — | 4.6 | |||||||||
Operating income | 5.8 | — | 5.8 | |||||||||
Investment income | — | 3.0 | 3.0 | |||||||||
Income before income tax expense | $ | 5.8 | $ | 3.0 | $ | 8.8 | ||||||
2012 | ||||||||||||
Cost of sales | $ | 1.0 | $ | — | $ | 1.0 | ||||||
Operating expenses | 4.1 | — | 4.1 | |||||||||
Operating income | 5.1 | — | 5.1 | |||||||||
Investment income | — | 3.2 | 3.2 | |||||||||
Income before income tax expense | $ | 5.1 | $ | 3.2 | $ | 8.3 | ||||||
2011 | ||||||||||||
Cost of sales | $ | 1.2 | $ | — | $ | 1.2 | ||||||
Operating expenses | 4.6 | — | 4.6 | |||||||||
Operating income | 5.8 | — | 5.8 | |||||||||
Investment income | — | 10.6 | 10.6 | |||||||||
Income before income tax expense | $ | 5.8 | $ | 10.6 | $ | 16.4 |
10. | GOODWILL & OTHER INTANGIBLE ASSETS |
Goodwill | Americas | EMEA | Other | Total | ||||||||||||
Goodwill | $ | 80.5 | $ | 267.0 | $ | 119.8 | $ | 467.3 | ||||||||
Accumulated impairment losses | (1.7 | ) | (229.9 | ) | (60.9 | ) | (292.5 | ) | ||||||||
Balance as of February 25, 2011 | $ | 78.8 | $ | 37.1 | $ | 58.9 | $ | 174.8 | ||||||||
Transfers (1) | 10.0 | (6.0 | ) | (4.0 | ) | — | ||||||||||
Acquisitions (2) | 2.0 | 0.3 | 1.1 | 3.4 | ||||||||||||
Dispositions (3) | — | — | (0.2 | ) | (0.2 | ) | ||||||||||
Currency translation adjustments | (0.1 | ) | (1.4 | ) | 0.1 | (1.4 | ) | |||||||||
Goodwill | 92.4 | 259.9 | 116.8 | 469.1 | ||||||||||||
Accumulated impairment losses | (1.7 | ) | (229.9 | ) | (60.9 | ) | (292.5 | ) | ||||||||
Balance as of February 24, 2012 | $ | 90.7 | $ | 30.0 | $ | 55.9 | $ | 176.6 | ||||||||
Acquisitions (4) | — | 4.4 | — | 4.4 | ||||||||||||
Impairments (5) | — | (35.1 | ) | (24.8 | ) | (59.9 | ) | |||||||||
Currency translation adjustments | (0.3 | ) | 0.7 | (0.1 | ) | 0.3 | ||||||||||
Goodwill | 92.1 | 265.0 | 116.7 | 473.8 | ||||||||||||
Accumulated impairment losses | (1.7 | ) | (265.0 | ) | (85.7 | ) | (352.4 | ) | ||||||||
Balance as of February 22, 2013 | $ | 90.4 | $ | — | $ | 31.0 | $ | 121.4 |
(1) | In 2012, the transfer of a portion of Designtex’s business to the Americas segment resulted in a goodwill reclassification between the Other category and the Americas segment. As a result of the 2012 change in reportable segments, goodwill was reclassified from EMEA to the Americas segment based on a relative fair value analysis. See Note 18 for additional information. |
(2) | In 2012, we acquired substantially all the assets of bkm Total Office resulting in an addition to goodwill in the Americas segment. See Note 19 for additional information. In addition, we made various immaterial acquisitions resulting in additions to the EMEA segment and Other category. |
(3) | In 2012, we sold a portion of PolyVision’s business. See Note 19 for additional information. |
(4) | In 2013, we made various immaterial acquisitions resulting in additions to goodwill in the EMEA segment. |
(5) | In 2013, we recorded goodwill impairment charges in both our EMEA and Designtex reporting units. See further details below. |
Other Intangible Assets | February 22, 2013 | February 24, 2012 | |||||||||||||||||||||||||
Weighted Average Useful Life (Years) | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | |||||||||||||||||||||
Intangible assets subject to amortization: | |||||||||||||||||||||||||||
Proprietary technology | 9.7 | $ | 22.8 | $ | 19.7 | $ | 3.1 | $ | 23.5 | $ | 19.3 | $ | 4.2 | ||||||||||||||
Trademarks | 8.9 | 13.3 | 13.3 | — | 29.7 | 29.3 | 0.4 | ||||||||||||||||||||
Non-compete agreements | 4.5 | 2.6 | 2.4 | 0.2 | 2.3 | 2.3 | — | ||||||||||||||||||||
Other | 5.7 | 14.5 | 11.2 | 3.3 | 10.9 | 9.3 | 1.6 | ||||||||||||||||||||
53.2 | 46.6 | 6.6 | 66.4 | 60.2 | 6.2 | ||||||||||||||||||||||
Intangible assets not subject to amortization: | |||||||||||||||||||||||||||
Trademarks | n/a | 12.6 | — | 12.6 | 12.6 | — | 12.6 | ||||||||||||||||||||
$ | 65.8 | $ | 46.6 | $ | 19.2 | $ | 79.0 | $ | 60.2 | $ | 18.8 |
Year Ending in February | Amount | ||
2014 | $ | 2.4 | |
2015 | 2.2 | ||
2016 | 1.3 | ||
2017 | 0.6 | ||
2018 | 0.1 | ||
$ | 6.6 |
11. | INVESTMENTS IN UNCONSOLIDATED AFFILIATES |
Investments in Unconsolidated Affiliates | February 22, 2013 | February 24, 2012 | ||||||||||
Investment Balance | Ownership Interest | Investment Balance | Ownership Interest | |||||||||
IDEO | $ | 16.1 | 20% | $ | 14.5 | 20% | ||||||
Dealer relationships: | ||||||||||||
Equity method investments | 18.4 | 20%-40% | 20.1 | 20%-40% | ||||||||
Cost method investments | 5.8 | Less than 10% | 5.8 | Less than 10% | ||||||||
Total dealer relationships | 24.2 | 25.9 | ||||||||||
Manufacturing joint ventures: | ||||||||||||
Equity method investments | 8.3 | 25%-49% | 7.3 | 25%-49% | ||||||||
Other | 4.7 | 8%-39% | — | 9% | ||||||||
Total investments in unconsolidated affiliates | $ | 53.3 | $ | 47.7 |
Equity in earnings of unconsolidated affiliates | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
IDEO | $ | 2.6 | $ | 2.5 | $ | 0.6 | ||||||
Dealer relationships | 3.9 | 3.1 | 2.7 | |||||||||
Manufacturing joint ventures | 3.4 | 2.7 | 3.0 | |||||||||
Other | (0.5 | ) | — | — | ||||||||
Total equity in earnings of unconsolidated affiliates | $ | 9.4 | $ | 8.3 | $ | 6.3 |
Consolidated Balance Sheets | February 22, 2013 | February 24, 2012 | ||||||
Total current assets | $ | 143.5 | $ | 125.9 | ||||
Total non-current assets | 38.2 | 35.0 | ||||||
Total assets | $ | 181.7 | $ | 160.9 | ||||
Total current liabilities | $ | 82.1 | $ | 69.3 | ||||
Total long-term liabilities | 19.9 | 27.9 | ||||||
Total liabilities | $ | 102.0 | $ | 97.2 |
Statements of Income | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Revenue | $ | 515.9 | $ | 472.9 | $ | 294.4 | ||||||
Gross profit | 151.6 | 140.6 | 69.0 | |||||||||
Income before income tax expense | 34.4 | 33.1 | 24.0 | |||||||||
Net income | 31.6 | 30.2 | 20.6 |
12. | SHORT-TERM BORROWINGS AND LONG-TERM DEBT |
Debt Obligations | Interest Rate Range as of February 22, 2013 | Fiscal Year Maturity Range | February 22, 2013 | February 24, 2012 | ||||||||
U.S. dollar obligations: | ||||||||||||
Senior notes (1) | 6.375% | 2021 | $ | 249.9 | $ | 249.9 | ||||||
Revolving credit facilities (2)(4) | 2018 | — | — | |||||||||
Notes payable (3) | LIBOR + 3.35% | 2017 | 38.4 | 40.8 | ||||||||
Capitalized lease obligations | 6.0%-6.5% | 2014-2016 | 0.4 | 0.5 | ||||||||
288.7 | 291.2 | |||||||||||
Foreign currency obligations: | ||||||||||||
Revolving credit facilities (4) | — | — | ||||||||||
Notes payable | 0.0%-6.5% | 0.3 | 0.3 | |||||||||
Total short-term borrowings and long-term debt | 289.0 | 291.5 | ||||||||||
Short-term borrowings and current portion of long-term debt (5) | 2.6 | 2.6 | ||||||||||
Long-term debt | $ | 286.4 | $ | 288.9 |
(1) | During 2011, we issued $250 of unsecured unsubordinated senior notes, due in February 2021 (“2021 Notes”). The 2021 Notes were priced at 99.953% of par value. The bond discount of $0.1 and direct debt issue costs of $3.0 were deferred and are being amortized over the life of the 2021 Notes. Although the coupon rate of the 2021 Notes is 6.375%, the effective interest rate is 6.6% after taking into account the impact of the discount, debt issuance costs and the deferred loss on interest rate locks related to the debt issuance. The 2021 Notes rank equally with all of our other unsecured unsubordinated indebtedness, and they contain no financial covenants. We may redeem some or all of the 2021 Notes at any time. The redemption price would equal the greater of (1) the principal amount of the notes being redeemed; or (2) the present value of the remaining scheduled payments of principal and interest discounted to the redemption date on a semi-annual basis at the comparable U.S. Treasury rate plus 45 basis points; plus, in both cases, accrued and unpaid interest. If the notes are redeemed within 3 months of maturity, the redemption price would be equal to the principal amount of the notes being redeemed plus accrued and unpaid interest. Amortization expense related to the discount and debt issuance costs on the 2021 notes was $0.3 in both 2013 and 2012. |
(2) | We have a $125 global committed bank facility which was entered into in Q1 2013. This facility amended and restated the former facility, which was scheduled to expire in Q4 2013. Please see below for further detail. As of February 22, 2013 and February 24, 2012, there were no borrowings outstanding under the applicable facility, our availability was not limited, and we were in compliance with all covenants under the applicable facility. |
(3) | During Q2 2010, we borrowed $47.0 at a floating interest rate based on 30-day LIBOR plus 3.35%. The loan has a term of seven years and requires fixed monthly principal payments of $0.2 based on a 20-year amortization schedule with a $30 balloon payment due in Q2 2017. The loan is secured by two corporate aircraft, contains no financial covenants and is not cross-defaulted to our other debt facilities. |
(4) | We have agreements with certain financial institutions which provide for borrowings on secured uncommitted short-term credit facilities of up to $3.5 of U.S. dollar obligations, secured uncommitted short-term credit facilities of up to $31.4 of foreign currency obligations and unsecured uncommitted short-term credit facilities of up to $7.4 of foreign currency obligations as of February 22, 2013. Interest rates are variable and determined by each agreement at the time of borrowing. These agreements expire within one year, but may |
(5) | The weighted-average interest rate for short-term borrowings and the current portion of long-term debt was 3.8% as of February 22, 2013 and February 24, 2012. |
Year Ending in February | Amount | |||
2014 | $ | 2.6 | ||
2015 | 2.4 | |||
2016 | 2.4 | |||
2017 | 31.4 | |||
2018 and after | 250.2 | |||
$ | 289.0 |
• | The greatest of the prime rate, the Federal fund effective rate plus 0.5%, and the Eurocurrency rate for a one month interest period plus 1%, plus the applicable margin as set forth in the credit agreement; or |
• | The Eurocurrency rate plus the applicable margin as set forth in the credit agreement. |
• | A maximum leverage ratio covenant, which is measured by the ratio of (x) indebtedness (as determined under the credit agreement) less excess liquidity (as determined under the credit agreement) to (y) the trailing four quarter Adjusted EBITDA (as determined under the credit agreement) and is required to be no greater than 3:1. (In the context of certain permitted acquisitions, we have a one-time ability, subject to certain conditions, to increase the maximum ratio to 3.25 to 1.0 for four consecutive quarters). |
• | A minimum interest coverage ratio covenant, which is measured by the ratio of (y) trailing four quarter Adjusted EBITDA (as determined under the credit agreement) to (z) trailing four quarter interest expense and is required to be no less than 3.5:1. |
13. | EMPLOYEE BENEFIT PLAN OBLIGATIONS |
Employee Benefit Plan Obligations | February 22, 2013 | February 24, 2012 | ||||||
Defined contribution retirement plans | $ | 13.3 | $ | 9.8 | ||||
Post-retirement medical benefits | 77.3 | 90.9 | ||||||
Defined benefit pension plans | 51.5 | 45.9 | ||||||
Deferred compensation plans and agreements | 39.5 | 37.1 | ||||||
181.6 | 183.7 | |||||||
Current portion | 23.8 | 22.6 | ||||||
Long-term portion | $ | 157.8 | $ | 161.1 |
Defined Benefit Pension Plan Obligations | February 22, 2013 | February 24, 2012 | ||||||||||||||||||||||
Qualified Plans | Non-qualified Supplemental Retirement Plans | Qualified Plans | Non-qualified Supplemental Retirement Plans | |||||||||||||||||||||
Domestic | Foreign | Domestic | Foreign | |||||||||||||||||||||
Plan assets | $ | 8.7 | $ | 41.5 | $ | — | $ | 8.7 | $ | 40.4 | $ | — | ||||||||||||
Projected benefit plan obligations | 9.9 | 58.1 | 33.7 | 9.4 | 54.3 | 31.3 | ||||||||||||||||||
Funded status | $ | (1.2 | ) | $ | (16.6 | ) | $ | (33.7 | ) | $ | (0.7 | ) | $ | (13.9 | ) | $ | (31.3 | ) | ||||||
Long-term asset | $ | — | $ | 0.2 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Current liability | — | (0.1 | ) | (2.8 | ) | — | (0.1 | ) | (2.3 | ) | ||||||||||||||
Long-term liability | (1.2 | ) | (16.7 | ) | (30.9 | ) | (0.7 | ) | (13.8 | ) | (29.0 | ) | ||||||||||||
Total benefit plan obligations | $ | (1.2 | ) | $ | (16.6 | ) | $ | (33.7 | ) | $ | (0.7 | ) | $ | (13.9 | ) | $ | (31.3 | ) | ||||||
Accumulated benefit obligation | $ | 9.9 | $ | 53.5 | $ | 31.6 | $ | 9.3 | $ | 50.9 | $ | 29.1 |
Changes in Assets, Benefit Obligations and Funded Status | Defined Benefit Pension Plans | Post-Retirement Plans | ||||||||||||||
February 22, 2013 | February 24, 2012 | February 22, 2013 | February 24, 2012 | |||||||||||||
Change in plan assets: | ||||||||||||||||
Fair value of plan assets, beginning of year | $ | 49.1 | $ | 50.2 | $ | — | $ | — | ||||||||
Actual return on plan assets | 4.5 | 2.0 | — | — | ||||||||||||
Employer contributions | 3.7 | 3.3 | 5.8 | 6.1 | ||||||||||||
Plan participants’ contributions | — | — | 5.9 | 6.5 | ||||||||||||
Estimated Medicare subsidies received | — | — | 1.2 | 0.9 | ||||||||||||
Currency changes | (1.6 | ) | (1.1 | ) | — | — | ||||||||||
Benefits paid | (5.5 | ) | (5.3 | ) | (12.9 | ) | (13.5 | ) | ||||||||
Fair value of plan assets, end of year | 50.2 | 49.1 | — | — |
Change in benefit obligations: | ||||||||||||||||
Benefit plan obligations, beginning of year | 95.0 | 87.3 | 90.9 | 110.5 | ||||||||||||
Service cost | 3.0 | 2.1 | 0.9 | 1.0 | ||||||||||||
Interest cost | 3.7 | 4.2 | 3.8 | 5.6 | ||||||||||||
Amendments | — | 0.1 | — | (20.9 | ) | |||||||||||
Net actuarial (gain) loss | 6.3 | 7.5 | (12.4 | ) | 0.9 | |||||||||||
Plan participants’ contributions | — | — | 5.9 | 6.5 | ||||||||||||
Medicare subsidies received | — | — | 1.2 | 0.9 | ||||||||||||
Currency changes | (1.1 | ) | (1.5 | ) | (0.1 | ) | (0.1 | ) | ||||||||
Other adjustments | 0.4 | 0.6 | — | — | ||||||||||||
Benefits paid | (5.6 | ) | (5.3 | ) | (12.9 | ) | (13.5 | ) | ||||||||
Benefit plan obligations, end of year | 101.7 | 95.0 | 77.3 | 90.9 | ||||||||||||
Funded status | $ | (51.5 | ) | $ | (45.9 | ) | $ | (77.3 | ) | $ | (90.9 | ) |
Amounts recognized on the Consolidated Balance Sheets: | ||||||||||||||||
Prepaid pension costs | $ | 0.2 | $ | — | $ | — | $ | — | ||||||||
Current liability | (2.9 | ) | (2.4 | ) | (4.6 | ) | (7.0 | ) | ||||||||
Long-term liability | (48.8 | ) | (43.5 | ) | (72.7 | ) | (83.9 | ) | ||||||||
Net amount recognized | $ | (51.5 | ) | $ | (45.9 | ) | $ | (77.3 | ) | $ | (90.9 | ) |
Amounts recognized in accumulated other comprehensive income (loss)—pretax: | ||||||||||||||||
Actuarial (gain) loss | $ | 22.3 | $ | 20.0 | $ | (2.4 | ) | $ | 10.3 | |||||||
Prior service cost (credit) | 0.7 | 0.8 | (45.2 | ) | (54.5 | ) | ||||||||||
Total amounts recognized in accumulated other comprehensive income (loss)—pretax | $ | 23.0 | $ | 20.8 | $ | (47.6 | ) | $ | (44.2 | ) |
Estimated amounts to be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next fiscal year: | ||||||||||||||||
Actuarial loss | $ | 1.2 | $ | 1.0 | $ | 0.2 | $ | 0.6 | ||||||||
Prior service cost (credit) | 0.1 | 0.1 | (9.1 | ) | (9.4 | ) | ||||||||||
Total amounts recognized in accumulated other comprehensive income (loss)—pretax | $ | 1.3 | $ | 1.1 | $ | (8.9 | ) | $ | (8.8 | ) |
Components of Expense | Pension Plans | Post-Retirement Plans | ||||||||||||||||||||||
Year Ended | Year Ended | |||||||||||||||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | February 22, 2013 | February 24, 2012 | February 25, 2011 | |||||||||||||||||||
Components of expense: | ||||||||||||||||||||||||
Service cost | $ | 3.0 | $ | 2.1 | $ | 2.0 | $ | 0.9 | $ | 1.0 | $ | 1.2 | ||||||||||||
Interest cost | 3.7 | 4.2 | 4.3 | 3.8 | 5.6 | 7.1 | ||||||||||||||||||
Amortization of net loss | 1.1 | 0.5 | 0.9 | 0.2 | 0.1 | 0.1 | ||||||||||||||||||
Amortization of prior year service cost (credit) | 0.1 | 0.2 | 0.1 | (9.3 | ) | (8.6 | ) | (8.1 | ) | |||||||||||||||
Expected return on plan assets | (2.6 | ) | (3.2 | ) | (2.8 | ) | — | — | — | |||||||||||||||
Adjustment due to plan curtailment | — | — | (0.9 | ) | (0.1 | ) | (2.9 | ) | (0.1 | ) | ||||||||||||||
Adjustment due to plan settlement | 0.1 | — | 0.1 | 0.1 | — | — | ||||||||||||||||||
Adjustment due to special termination benefits | — | — | — | — | 0.1 | 0.1 | ||||||||||||||||||
Net expense (credit) recognized in Consolidated Statements of Income | 5.4 | 3.8 | 3.7 | (4.4 | ) | (4.7 | ) | 0.3 |
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) (pre-tax): | ||||||||||||||||||||||||
Net loss (gain) | 4.8 | 8.9 | (1.6 | ) | (12.4 | ) | 0.9 | 2.1 | ||||||||||||||||
Prior service cost (credit) | — | 0.1 | 0.8 | — | (20.9 | ) | (24.4 | ) | ||||||||||||||||
Amortization of loss | (1.1 | ) | (0.5 | ) | (1.1 | ) | (0.3 | ) | (0.6 | ) | (0.1 | ) | ||||||||||||
Amortization of prior year service credit (cost) | (0.1 | ) | (0.2 | ) | (0.1 | ) | 9.4 | 12.0 | 8.2 | |||||||||||||||
Prior service cost recognized as a part of curtailment / settlement | — | — | (0.2 | ) | — | — | — | |||||||||||||||||
Total recognized in other comprehensive income (loss) | 3.6 | 8.3 | (2.2 | ) | (3.3 | ) | (8.6 | ) | (14.2 | ) | ||||||||||||||
Total recognized in net periodic benefit cost and other comprehensive income (loss) (pre-tax) | $ | 9.0 | $ | 12.1 | $ | 1.5 | $ | (7.7 | ) | $ | (13.3 | ) | $ | (13.9 | ) |
Minimum Pension Liability | Before Tax Amount | Tax (Expense) Benefit | Net of Tax Amount | |||||||||
Balance as of February 25, 2011 | $ | 22.9 | $ | (3.1 | ) | $ | 19.8 | |||||
Prior service (cost) credit from plan amendment arising during period | 20.8 | (8.0 | ) | 12.8 | ||||||||
Amortization of prior service cost (credit) included in net periodic pension cost | (11.8 | ) | 4.5 | (7.3 | ) | |||||||
Net prior service (cost) credit during period | 9.0 | (3.5 | ) | 5.5 | ||||||||
Net actuarial gain (loss) arising during period | (9.8 | ) | 3.1 | (6.7 | ) | |||||||
Amortization of net actuarial (gain) loss included in net periodic pension cost | 1.1 | (0.4 | ) | 0.7 | ||||||||
Net actuarial gain (loss) during period | (8.7 | ) | 2.7 | (6.0 | ) | |||||||
Foreign currency translation adjustments | 0.2 | 0.2 | 0.4 | |||||||||
Current period change | 0.5 | (0.6 | ) | (0.1 | ) | |||||||
Balance as of February 24, 2012 | $ | 23.4 | $ | (3.7 | ) | $ | 19.7 | |||||
Amortization of prior service cost (credit) included in net periodic pension cost | (9.3 | ) | 3.5 | (5.8 | ) | |||||||
Net prior service (cost) credit during period | (9.3 | ) | 3.5 | (5.8 | ) | |||||||
Net actuarial gain (loss) arising during period | 7.6 | (3.9 | ) | 3.7 | ||||||||
Amortization of net actuarial (gain) loss included in net periodic pension cost | 1.4 | (0.5 | ) | 0.9 | ||||||||
Net actuarial gain (loss) during period | 9.0 | (4.4 | ) | 4.6 | ||||||||
Foreign currency translation adjustments | 0.3 | 0.1 | 0.4 | |||||||||
Current period change | — | (0.8 | ) | (0.8 | ) | |||||||
Balance as of February 22, 2013 | $ | 23.4 | $ | (4.5 | ) | $ | 18.9 |
Weighted-Average Assumptions | Pension Plans | Post-Retirement Plans | ||||||||||||||||
Year Ended | Year Ended | |||||||||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | February 22, 2013 | February 24, 2012 | February 25, 2011 | |||||||||||||
Weighted-average assumptions used to determine benefit obligations: | ||||||||||||||||||
Discount rate | 3.60 | % | 4.20 | % | 5.10 | % | 3.82 | % | 4.34 | % | 5.34 | % | ||||||
Rate of salary progression | 3.00 | % | 2.90 | % | 3.00 | % | ||||||||||||
Weighted-average assumptions used to determine net periodic benefit cost: | ||||||||||||||||||
Discount rate | 4.20 | % | 5.10 | % | 5.30 | % | 4.31 | % | 5.30 | % | 5.57 | % | ||||||
Expected return on plan assets | 5.00 | % | 3.10 | % | 4.90 | % | ||||||||||||
Rate of salary progression | 2.90 | % | 3.00 | % | 3.00 | % |
Health Cost Trend Sensitivity | One percentage point increase | One percentage point decrease | ||||||
Effect on total of service and interest cost components | $ | — | $ | — | ||||
Effect on post-retirement benefit obligation | $ | 0.5 | $ | (0.4 | ) |
Asset Category | February 22, 2013 | February 24, 2012 | ||||||||||
Actual Allocations | Target Allocations | Actual Allocations | Target Allocations | |||||||||
Equity securities | 63 | % | 53 | % | 63 | % | 52 | % | ||||
Debt securities | 25 | 33 | 24 | 33 | ||||||||
Real estate | 2 | 4 | 2 | 4 | ||||||||
Other (1) | 10 | 10 | 11 | 11 | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
(1) | Represents guaranteed insurance contracts, money market funds and cash. |
Fair Value of Pension Plan Assets | February 22, 2013 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash and cash equivalents | $ | 0.1 | $ | — | $ | — | $ | 0.1 | ||||||||
Equity securities: | ||||||||||||||||
U.S. large-cap | 0.9 | — | — | 0.9 | ||||||||||||
U.S. small-cap | 0.7 | — | — | 0.7 | ||||||||||||
U.S. index | 1.0 | — | — | 1.0 | ||||||||||||
International | — | 20.9 | — | 20.9 | ||||||||||||
Fixed income securities: | ||||||||||||||||
Bond funds | — | 8.0 | — | 8.0 | ||||||||||||
Other investments: | ||||||||||||||||
Group annuity contract (1) | — | — | 2.4 | 2.4 | ||||||||||||
Insurance products | — | 13.7 | — | 13.7 | ||||||||||||
Guaranteed insurance contracts (2) | — | — | 1.7 | 1.7 | ||||||||||||
Property funds | 0.8 | — | — | 0.8 | ||||||||||||
$ | 3.5 | $ | 42.6 | $ | 4.1 | $ | 50.2 |
Fair Value of Pension Plan Assets | February 24, 2012 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash and cash equivalents | $ | 0.4 | $ | — | $ | — | $ | 0.4 | ||||||||
Equity securities: | ||||||||||||||||
U.S. large-cap | 0.6 | — | — | 0.6 | ||||||||||||
U.S. small-cap | 1.5 | — | — | 1.5 | ||||||||||||
U.S. index | 0.5 | — | — | 0.5 | ||||||||||||
International | 0.7 | 19.1 | — | 19.8 | ||||||||||||
Fixed income securities: | ||||||||||||||||
Bond funds | — | 7.9 | — | 7.9 | ||||||||||||
Other investments: | ||||||||||||||||
Group annuity contract (1) | — | — | 2.4 | 2.4 | ||||||||||||
Insurance products | — | 13.1 | — | 13.1 | ||||||||||||
Guaranteed insurance contracts (2) | — | — | 2.0 | 2.0 | ||||||||||||
Property funds | 0.9 | — | — | 0.9 | ||||||||||||
$ | 4.6 | $ | 40.1 | $ | 4.4 | $ | 49.1 |
(1) | Group annuity contracts are valued utilizing a discounted cash flow model. The term “cash flow” refers to the future principal and interest payments we expect to receive on a given asset in the general account. The model projects future cash flows separately for each investment period and each category of investment. |
(2) | Guaranteed insurance contracts are valued at book value, which approximates fair value, and are calculated using the prior year balance plus or minus investment returns and changes in cash flows. |
Roll-forward of Fair Value Using Level 3 Inputs | Group Annuity Contract | Guaranteed Insurance Contracts | ||||||
Balance as of February 25, 2011 | $ | 2.5 | $ | 2.3 | ||||
Unrealized return on plan assets, including changes in foreign exchange rates | 0.1 | — | ||||||
Purchases, sales, and other, net | (0.2 | ) | (0.3 | ) | ||||
Balance as of February 24, 2012 | $ | 2.4 | $ | 2.0 | ||||
Unrealized return on plan assets, including changes in foreign exchange rates | 0.2 | — | ||||||
Purchases, sales, and other, net | (0.2 | ) | (0.3 | ) | ||||
Balance as of February 22, 2013 | $ | 2.4 | $ | 1.7 |
Year Ending in February | Post-retirement Plans | |||||||||||||||
Pension Plans | Before Medicare Act Subsidy | Medicare Act Subsidy | After Medicare Act Subsidy | |||||||||||||
2014 | $ | 9.3 | $ | 4.8 | $ | (0.1 | ) | $ | 4.7 | |||||||
2015 | 9.3 | 5.3 | (0.1 | ) | 5.2 | |||||||||||
2016 | 6.0 | 5.3 | (0.1 | ) | 5.2 | |||||||||||
2017 | 5.9 | 5.4 | (0.1 | ) | 5.3 | |||||||||||
2018 | 6.1 | 5.5 | (0.1 | ) | 5.4 | |||||||||||
2019 - 2023 | 33.9 | 28.9 | (0.2 | ) | 28.7 |
• | Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers. |
• | If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. |
• | If a participating employer chooses to stop participating in a multi-employer plan or otherwise has participation in the plan drop below certain levels, that employer may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability. |
Pension Fund | EIN - Pension Plan Number | Plan Month / Day End Date | Pension Protection Act Zone Status (1) | FIP/RP Status Pending / Implemented (2) | Contributions | Surcharges Imposed or Amortization Provisions | |||
2012 | 2011 | 2013 | 2012 | 2011 | |||||
Central States, Southeast and Southwest Areas Pension Fund | 366044243-001 | 12/31 | Red | Red | Implemented | $0.3 | $0.5 | $0.6 | No |
(1) | The most recent Pension Protection Act Zone Status available in 2012 and 2011 relates to the plan's two most recent fiscal year-ends. The zone status is based on information received from the plan certified by the plan’s actuary. Among other factors, red zone status plans are generally less than 65 percent funded and are considered in critical status. |
(2) | The FIP/RP Status Pending/Implemented column indicates plans for which a financial improvement plan or a rehabilitation plan is either pending or has been implemented by the trustees of the plan. |
Pension Fund | Total Collective Bargaining Agreements | Expiration Date | % of Associates Under Collective Bargaining Agreement | Over 5% Contribution 2013 |
Central States, Southeast and Southwest Areas Pension Fund | 1 | 3/31/2018 | 0.2% | No |
14. | CAPITAL STRUCTURE |
15. | INCOME TAXES |
Provision for Income Taxes—Expense | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Current income taxes: | ||||||||||||
Federal | $ | 12.1 | $ | — | $ | 3.3 | ||||||
State and local | 1.4 | 0.4 | 1.0 | |||||||||
Foreign | 5.6 | 11.3 | 15.4 | |||||||||
19.1 | 11.7 | 19.7 | ||||||||||
Deferred income taxes: | ||||||||||||
Federal | (48.8 | ) | 18.0 | 17.4 | ||||||||
State and local | 3.1 | 2.5 | 1.2 | |||||||||
Foreign | 42.7 | (6.9 | ) | (7.3 | ) | |||||||
(3.0 | ) | 13.6 | 11.3 | |||||||||
Income tax expense | $ | 16.1 | $ | 25.3 | $ | 31.0 |
Source of Income (Loss) Before Income Tax Expense | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Domestic | $ | 83.8 | $ | 63.8 | $ | 39.7 | ||||||
Foreign | (28.9 | ) | 18.2 | 11.7 | ||||||||
$ | 54.9 | $ | 82.0 | $ | 51.4 |
Income Tax Provision Reconciliation | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Tax expense at the U.S. federal statutory rate | $ | 19.2 | $ | 28.7 | $ | 18.0 | ||||||
Foreign tax credits (1) | (57.6 | ) | 1.3 | 5.0 | ||||||||
Valuation allowance provisions and adjustments (2) | 40.0 | 0.7 | 1.2 | |||||||||
Goodwill impairment (3) | 12.3 | — | — | |||||||||
Healthcare reform (4) | — | — | 11.4 | |||||||||
COLI income (5) | (3.1 | ) | (2.9 | ) | (5.7 | ) | ||||||
Sale of subsidiary (6) | — | (2.3 | ) | (1.7 | ) | |||||||
State and local income taxes, net of federal | 2.9 | 1.9 | 1.4 | |||||||||
Tax balance adjustments (7) | — | (1.0 | ) | 4.3 | ||||||||
Foreign operations, less applicable foreign tax credits (8) | 2.5 | 0.7 | (1.5 | ) | ||||||||
Research tax credit | (1.9 | ) | (1.6 | ) | (1.7 | ) | ||||||
Tax reserve adjustments | 0.7 | 1.1 | — | |||||||||
Other | 1.1 | (1.3 | ) | 0.3 | ||||||||
Total income tax expense recognized | $ | 16.1 | $ | 25.3 | $ | 31.0 |
(1) | In 2013, we converted a wholly owned French holding company from a disregarded entity to a controlled foreign corporation for U.S. tax purposes, and that conversion caused outstanding intercompany debt to be treated as a deemed dividend taxable in the U.S. Foreign taxes paid on the income that generated the deemed dividend exceeded the U.S. tax cost creating an excess foreign tax credit of $56.7. Additionally, other cash dividends received from our Canadian subsidiary resulted in excess foreign tax credits of $0.9. These credits are expected to be utilized $21.0 in 2014 and $36.6 within the allowable 10 year carryfoward period. |
(2) | The valuation allowance provisions were based on current year activity, and the valuation allowance adjustments were based on various factors, which are further detailed below. |
(3) | The impairment charges related to goodwill recorded in purchase accounting are non-deductible. |
(4) | In Q1 2011, the U.S. enacted significant healthcare reform legislation which effectively changed the tax treatment of the federal subsidies received by employers who provide certain prescription drug benefits for retirees (the “Medicare Part D subsidy”) for fiscal years beginning after December 31, 2012. We had previously recorded deferred tax assets based on the liability for post-retirement benefit obligations related to prescription drug benefits for retirees. As a result of the law change during Q1 2011, deferred tax assets were reduced as these obligations will no longer be deductible for purposes of determining taxable income to the extent they are reimbursed by the Medicare Part D subsidy. |
(5) | The net returns in cash surrender value, normal insurance expenses and death benefit gains related to our investments in COLI policies are non-taxable. |
(6) | In Q2 2012, we completed the sale of PolyVision’s remaining low margin whiteboard fabrication business in Europe to a third party for proceeds totaling $2.3. The transaction included the sale of PolyVision SAS (France) and PolyVision A/S (Denmark). Basis differences resulted in a tax benefit of $2.3. |
(7) | The tax balance adjustments in 2011 relate to prior periods. Management has evaluated the relevant qualitative and quantitative factors related to these adjustments and concluded that had the adjustments been recorded in the appropriate period the impact individually and in the aggregate would not have been material to the current or previously reported financial information for any prior fiscal year. |
(8) | The foreign operations, less applicable foreign tax credits amount includes the rate differential on foreign operations, U.S. tax cost of foreign branches and the impact of rate reductions in foreign jurisdictions. |
Deferred Income Taxes | February 22, 2013 | February 24, 2012 | ||||||
Deferred income tax assets: | ||||||||
Employee benefit plan obligations | $ | 90.7 | $ | 94.7 | ||||
Foreign and domestic net operating loss carryforwards | 85.0 | 91.4 | ||||||
Reserves and accruals | 26.5 | 33.2 | ||||||
Tax credit carryforwards | 60.2 | 20.5 | ||||||
Other, net | 6.1 | 4.5 | ||||||
Total deferred income tax assets | 268.5 | 244.3 | ||||||
Valuation allowances | (70.4 | ) | (34.5 | ) | ||||
Net deferred income tax assets | 198.1 | 209.8 | ||||||
Deferred income tax liabilities: | ||||||||
Property, plant and equipment | 31.7 | 37.8 | ||||||
Intangible assets | 14.2 | 21.1 | ||||||
Total deferred income tax liabilities | 45.9 | 58.9 | ||||||
Net deferred income taxes | $ | 152.2 | $ | 150.9 | ||||
Net deferred income taxes is comprised of the following components: | ||||||||
Deferred income tax assets—current | $ | 56.2 | $ | 42.4 | ||||
Deferred income tax assets—non-current | 101.7 | 110.4 | ||||||
Deferred income tax liabilities—current | — | — | ||||||
Deferred income tax liabilities—non-current | 5.7 | 1.9 |
• | the nature, frequency and severity of cumulative financial reporting losses in recent years, |
• | the predictability of future operating income, |
• | prudent and feasible tax planning strategies that could be implemented, to protect the loss of the deferred tax asset and |
• | the effect of reversing taxable temporary differences. |
• | consistent and improving financial reporting profit in recent years, |
• | the predictability of future operating income and |
• | the unlimited loss carryforward period. |
Current Income Taxes | February 22, 2013 | February 24, 2012 | ||||||
Other current assets: | ||||||||
Income taxes receivable | $ | 4.7 | $ | 3.0 | ||||
Accrued expenses: | ||||||||
Income taxes payable | $ | 2.7 | $ | 3.1 |
Year Ending February | Net Operating Loss Carryforwards (Gross) | Tax Effected Net Operating Loss Carryforwards | Tax Credit Carryforwards | |||||||||||||||||||||||||||||
Federal | State | International | Federal | State | International | Total | ||||||||||||||||||||||||||
2014 | $ | — | $ | — | $ | 1.8 | $ | — | $ | — | $ | 0.5 | $ | 0.5 | $ | — | ||||||||||||||||
2015 | — | 0.3 | 1.4 | — | — | 0.4 | 0.4 | — | ||||||||||||||||||||||||
2016 | — | 0.1 | 5.4 | — | — | 1.6 | 1.6 | — | ||||||||||||||||||||||||
2017 | — | 0.1 | 3.8 | — | — | 1.1 | 1.1 | — | ||||||||||||||||||||||||
2018-2033 | — | 185.9 | 3.7 | — | 4.8 | 0.8 | 5.6 | 52.6 | ||||||||||||||||||||||||
No expiration | — | — | 236.7 | — | 1.0 | 74.8 | 75.8 | 7.6 | ||||||||||||||||||||||||
$ | — | $ | 186.4 | $ | 252.8 | — | 5.8 | 79.2 | 85.0 | 60.2 | ||||||||||||||||||||||
Valuation allowances | — | (0.5 | ) | (66.0 | ) | (66.5 | ) | — | ||||||||||||||||||||||||
Net benefit | $ | — | $ | 5.3 | $ | 13.2 | $ | 18.5 | $ | 60.2 |
Liability for Uncertain Tax Positions | February 22, 2013 | February 24, 2012 | ||||||
Other accrued expenses | $ | 0.3 | $ | — | ||||
Other long-term liabilities | 1.6 | 1.2 | ||||||
$ | 1.9 | $ | 1.2 |
Unrecognized Tax Benefits | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Balance as of beginning of period | $ | 11.5 | $ | 0.1 | $ | 0.2 | ||||||
Gross increases—tax positions in prior period | 1.6 | — | — | |||||||||
Gross decreases—tax positions in prior period | (0.9 | ) | — | — | ||||||||
Gross increases—tax positions in current period | — | 11.5 | — | |||||||||
Lapse of statute of limitations | — | (0.1 | ) | (0.1 | ) | |||||||
Balance as of end of period | $ | 12.2 | $ | 11.5 | $ | 0.1 |
16. | STOCK INCENTIVE PLAN |
Total Outstanding Awards | February 22, 2013 | ||
Performance units (1) | 1,932,030 | ||
Restricted stock units | 1,221,227 | ||
Stock options | — | ||
Total outstanding awards | 3,153,257 |
(1) | This amount includes the maximum number of shares that may be issued under outstanding performance unit awards; however, the actual number of shares which may be issued will be determined based on the satisfaction of certain criteria, and therefore may be significantly lower. |
• | all outstanding options and SARs granted under the Incentive Compensation Plan will become immediately exercisable and remain exercisable throughout their entire term; |
• | if at least six months have elapsed following the award date, any performance-based conditions imposed with respect to outstanding awards shall be deemed to be fully earned and a pro rata portion of each such outstanding award granted for all outstanding performance periods shall become payable in shares of Class A Common Stock, in the case of awards denominated in shares of Class A Common Stock, and in cash, in the case of awards denominated in cash, with the remainder of such award being canceled for no value; and |
• | all restrictions imposed on restricted stock and restricted stock units that are not performance-based shall lapse. |
2013 Awards | 2012 Awards | 2011 Awards | |||||||
Three-year risk-free interest rate (1) | 0.5 | % | 1.4 | % | 1.7 | % | |||
Expected term | 3 years | 3 years | 3 years | ||||||
Estimated volatility (2) | 49.8 | % | 50.9 | % | 49.2 | % |
(1) | Based on the U.S. Government bond benchmark on the grant date. |
(2) | Represents the historical price volatility of the Company’s Class A Common Stock for the three-year period preceding the grant date. |
Grant Date Fair Value per Unit | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Weighted-average grant date fair value per share of performance units granted during 2013, 2012 and 2011 | $ | 11.92 | $ | 16.57 | $ | 9.14 |
Performance Units | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Expense | $ | 5.5 | $ | 8.1 | $ | 5.6 | ||||||
Tax benefit | 3.0 | 1.2 | 2.1 |
Maximum Number of Nonvested Units | Total | Weighted-Average Grant Date Fair Value per Unit | |||||
Nonvested as of February 24, 2012 (1) | 2,529,690 | $ | 12.00 | ||||
Granted | 1,080,940 | 11.92 | |||||
Vested | (1,018,500 | ) | 9.14 | ||||
Forfeited | (320,600 | ) | 11.98 | ||||
Adjustments (2) | (339,500 | ) | 9.14 | ||||
Nonvested as of February 22, 2013 (1) | 1,932,030 | 14.12 |
(1) | Total nonvested units include 194,750 units as of February 24, 2012, which represent the 25% portion of the awards granted in 2011 which are not subject to performance conditions. There are no units outstanding as of February 22, 2013 that are not subject to performance conditions. |
(2) | Adjustments were due to the number of shares earned under the 2011 award at the end of the performance period being less than the maximum. |
Grant Date Fair Value per Share | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Weighted-average grant date fair value per share of RSUs granted during 2013, 2012 and 2011 | $ | 9.66 | $ | 9.64 | $ | 8.69 |
Restricted Stock Units | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Expense | $ | 3.8 | $ | 3.2 | $ | 1.5 | ||||||
Tax benefit | 1.2 | 1.0 | 0.5 |
Nonvested Units | Total | Weighted-Average Grant Date Fair Value per Share | |||||
Nonvested as of February 24, 2012 | 880,837 | $ | 8.70 | ||||
Granted | 554,172 | 9.66 | |||||
Vested | (170,582 | ) | 6.35 | ||||
Forfeited | (43,200 | ) | 10.04 | ||||
Nonvested as of February 22, 2013 | 1,221,227 | 9.42 |
Unexercised Options Outstanding | Number of Shares | Weighted-Average Option Price per Share | |||||
February 24, 2012 | 2,212,929 | $ | 14.73 | ||||
Options exercised | — | — | |||||
Options forfeited and expired | (2,212,929 | ) | 14.73 | ||||
February 22, 2013 | — | — |
17. | COMMITMENTS AND GUARANTEES |
Year Ending in February | Minimum annual rental commitments | Minimum annual sublease rental income | Minimum annual rental commitments, net | |||||||||
2014 | $ | 47.7 | $ | (5.0 | ) | $ | 42.7 | |||||
2015 | 38.0 | (4.7 | ) | 33.3 | ||||||||
2016 | 29.7 | (4.8 | ) | 24.9 | ||||||||
2017 | 20.1 | (4.8 | ) | 15.3 | ||||||||
2018 | 14.8 | (3.8 | ) | 11.0 | ||||||||
Thereafter | 16.6 | (2.2 | ) | 14.4 | ||||||||
$ | 166.9 | $ | (25.3 | ) | $ | 141.6 |
Guarantees and Performance Bonds | February 22, 2013 | February 24, 2012 | ||||||
Performance bonds | $ | 0.1 | $ | 0.1 | ||||
Guarantees | — | 0.3 | ||||||
$ | 0.1 | $ | 0.4 |
18. | REPORTABLE SEGMENTS |
Operating Segment Data | Americas | EMEA | Other | Corporate | Consolidated | |||||||||||||||
Fiscal 2013 | ||||||||||||||||||||
Revenue | $ | 2,015.1 | $ | 594.8 | $ | 258.8 | $ | — | $ | 2,868.7 | ||||||||||
Operating income (loss) | 168.3 | (50.9 | ) | (20.1 | ) | (38.0 | ) | 59.3 | ||||||||||||
Total assets | 876.6 | 278.1 | 155.9 | 379.0 | 1,689.6 | |||||||||||||||
Capital expenditures | 50.9 | 15.1 | 7.9 | 0.1 | 74.0 | |||||||||||||||
Depreciation & amortization | 38.6 | 13.1 | 6.1 | 0.5 | 58.3 | |||||||||||||||
Fiscal 2012 | ||||||||||||||||||||
Revenue | $ | 1,868.4 | $ | 610.5 | $ | 270.6 | $ | — | $ | 2,749.5 | ||||||||||
Operating income (loss) | 122.8 | (9.9 | ) | 14.6 | (30.4 | ) | 97.1 | |||||||||||||
Total assets | 860.6 | 326.3 | 179.0 | 313.0 | 1,678.9 | |||||||||||||||
Capital expenditures | 46.6 | 12.7 | 4.4 | 1.2 | 64.9 | |||||||||||||||
Depreciation & amortization | 36.6 | 13.4 | 6.1 | 0.3 | 56.4 | |||||||||||||||
Fiscal 2011 | ||||||||||||||||||||
Revenue | $ | 1,536.0 | $ | 555.8 | $ | 345.3 | $ | — | $ | 2,437.1 | ||||||||||
Operating income (loss) | 67.5 | (18.9 | ) | 17.0 | (14.1 | ) | 51.5 | |||||||||||||
Total assets | 793.5 | 353.4 | 189.3 | 638.2 | 1,974.4 | |||||||||||||||
Capital expenditures | 28.4 | 10.3 | 5.9 | 1.4 | 46.0 | |||||||||||||||
Depreciation & amortization | 38.7 | 16.2 | 9.1 | 0.4 | 64.4 |
Reportable Geographic Data | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Revenue: | ||||||||||||
United States | $ | 1,881.3 | $ | 1,751.0 | $ | 1,518.5 | ||||||
Foreign locations | 987.4 | 998.5 | 918.6 | |||||||||
$ | 2,868.7 | $ | 2,749.5 | $ | 2,437.1 | |||||||
Long-lived assets: | ||||||||||||
United States | $ | 666.1 | $ | 688.7 | $ | 665.9 | ||||||
Foreign locations | 127.1 | 151.5 | 162.4 | |||||||||
$ | 793.2 | $ | 840.2 | $ | 828.3 |
Product Category Data | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Systems and storage | $ | 1,358.7 | $ | 1,306.1 | $ | 1,036.6 | ||||||
Seating | 840.7 | 821.6 | 678.9 | |||||||||
Other (1) | 669.3 | 621.8 | 721.6 | |||||||||
Total | $ | 2,868.7 | $ | 2,749.5 | $ | 2,437.1 |
(1) | Other consists primarily of consolidated dealers, textiles and surface materials and other uncategorized product lines, and services, none of which are individually greater than 10% of consolidated revenue. |
19. | DIVESTITURES, ACQUISITIONS AND OWNERSHIP TRANSITIONS |
PolyVision SAS and PolyVision A/S | Year Ended | |||||||
February 24, 2012 | February 25, 2011 | |||||||
Revenue | $ | 8.6 | $ | 17.1 | ||||
Gross profit | 1.6 | 3.5 | ||||||
Operating income | 0.1 | 0.6 |
IDEO | Year Ended | |||
February 25, 2011 | ||||
Revenue | $ | 103.4 | ||
Gross profit | 47.1 | |||
Operating income (1) | 11.8 |
(1) | Operating income did not include variable compensation expense of approximately $7 earned by IDEO management in 2011 related to a contingent stock bonus program that was recognized and applied toward the purchase price in Q4 2011. |
20. | RESTRUCTURING ACTIVITIES |
Restructuring Costs | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Cost of sales | ||||||||||||
Americas | $ | 13.9 | $ | 20.0 | $ | 7.0 | ||||||
EMEA | 1.0 | 5.0 | 18.7 | |||||||||
Other | — | 1.2 | 0.1 | |||||||||
14.9 | 26.2 | 25.8 | ||||||||||
Operating expenses | ||||||||||||
Americas | 14.7 | 1.5 | 1.1 | |||||||||
EMEA | 4.0 | 3.0 | 0.4 | |||||||||
Other | 1.1 | (0.2 | ) | 3.3 | ||||||||
19.8 | 4.3 | 4.8 | ||||||||||
$ | 34.7 | $ | 30.5 | $ | 30.6 |
Restructuring Reserve | Workforce Reductions | Business Exits and Related Costs | Total | |||||||||
Reserve balance as of February 26, 2010 | $ | 6.8 | $ | 3.5 | $ | 10.3 | ||||||
Additions | 38.3 | (7.7 | ) | 30.6 | ||||||||
Payments | (19.6 | ) | (4.6 | ) | (24.2 | ) | ||||||
Adjustments | 0.2 | 10.1 | 10.3 | |||||||||
Reserve balance as of February 25, 2011 | $ | 25.7 | $ | 1.3 | $ | 27.0 | ||||||
Additions | 25.6 | 4.9 | 30.5 | |||||||||
Payments | (38.2 | ) | (6.9 | ) | (45.1 | ) | ||||||
Adjustments | (0.2 | ) | 5.4 | 5.2 | ||||||||
Reserve balance as of February 24, 2012 | $ | 12.9 | $ | 4.7 | $ | 17.6 | ||||||
Additions | 11.5 | 23.2 | 34.7 | |||||||||
Payments | (16.4 | ) | (24.1 | ) | (40.5 | ) | ||||||
Adjustments | (0.2 | ) | (0.5 | ) | (0.7 | ) | ||||||
Reserve balance as of February 22, 2013 | $ | 7.8 | $ | 3.3 | $ | 11.1 |
21. | UNAUDITED QUARTERLY RESULTS |
Unaudited Quarterly Results | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total | |||||||||||||||
2013 | ||||||||||||||||||||
Revenue | $ | 675.2 | $ | 744.9 | $ | 727.2 | $ | 721.4 | $ | 2,868.7 | ||||||||||
Gross profit | 196.0 | 228.1 | 225.9 | 216.0 | 866.0 | |||||||||||||||
Operating income (loss) | 19.3 | 46.8 | 38.4 | (45.2 | ) | 59.3 | ||||||||||||||
Net income (loss) | 13.2 | 29.5 | 23.6 | (27.5 | ) | 38.8 | ||||||||||||||
Basic earnings (loss) per share | 0.10 | 0.23 | 0.19 | (0.22 | ) | 0.30 | ||||||||||||||
Diluted earnings (loss) per share | 0.10 | 0.23 | 0.18 | (0.22 | ) | 0.30 | ||||||||||||||
2012 | ||||||||||||||||||||
Revenue | $ | 639.4 | $ | 700.5 | $ | 719.4 | $ | 690.2 | $ | 2,749.5 | ||||||||||
Gross profit | 183.1 | 201.2 | 219.8 | 205.6 | 809.7 | |||||||||||||||
Operating income | 15.0 | 25.4 | 38.2 | 18.5 | 97.1 | |||||||||||||||
Net income | 7.5 | 11.9 | 22.4 | 14.9 | 56.7 | |||||||||||||||
Basic earnings per share | 0.06 | 0.09 | 0.17 | 0.11 | 0.43 | |||||||||||||||
Diluted earnings per share | 0.06 | 0.09 | 0.17 | 0.11 | 0.43 |
Item 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure: |
Item 9A. | Controls and Procedures: |
Item 9B. | Other Information: |
Item 10. | Directors, Executive Officers and Corporate Governance: |
Item 11. | Executive Compensation: |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters: |
Plan Category | Number of securities to be issued upon exercise of outstanding warrants and rights | Weighted-average exercise price of outstanding warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the second column) | |||||||
Equity compensation plans approved by security holders | 3,153,257 | (1) | n/a | (2) | 12,751,324 | |||||
Equity compensation plans not approved by security holders | — | n/a | — | |||||||
Total | 3,153,257 | n/a | 12,751,324 |
(1) | This amount includes the maximum number of shares that may be issued under outstanding performance units; however, the actual number of shares which may be issued will be determined based on the satisfaction of certain criteria, and therefore may be significantly lower. |
(2) | The weighted average exercise price excludes performance units and restricted stock units, as there is no exercise price associated with these awards. The only outstanding warrants or rights are performance units and restricted stock units. |
Item 13. | Certain Relationships and Related Transactions, and Director Independence: |
Item 14. | Principal Accounting Fees and Services: |
Item 15. | Exhibits, Financial Statement Schedules: |
• | Management’s Report on Internal Control Over Financial Reporting |
• | Reports of Independent Registered Public Accounting Firm |
• | Consolidated Statements of Income for the Years Ended February 22, 2013, February 24, 2012 and February 25, 2011 |
• | Consolidated Statements of Comprehensive Income for the Years Ended February 22, 2013, February 24, 2012 and February 25, 2011 |
• | Consolidated Balance Sheets as of February 22, 2013 and February 24, 2012 |
• | Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended February 22, 2013, February 24, 2012 and February 25, 2011 |
• | Consolidated Statements of Cash Flows for the Years Ended February 22, 2013, February 24, 2012 and February 25, 2011 |
• | Notes to the Consolidated Financial Statements |
STEELCASE INC. | ||
By: | /s/ MARK T. MOSSING | |
Mark T. Mossing Corporate Controller and Chief Accounting Officer (Duly Authorized Officer and Principal Accounting Officer) |
Signature | Title | Date | ||
/s/ JAMES P. HACKETT | President and Chief Executive Officer, Director (Principal Executive Officer) | April 19, 2013 | ||
James P. Hackett | ||||
/s/ DAVID C. SYLVESTER | Senior Vice President, Chief Financial Officer (Principal Financial Officer) | April 19, 2013 | ||
David C. Sylvester | ||||
/s/ MARK T. MOSSING | Corporate Controller and Chief Accounting Officer (Principal Accounting Officer) | April 19, 2013 | ||
Mark T. Mossing | ||||
/s/ WILLIAM P. CRAWFORD | April 19, 2013 | |||
William P. Crawford | Director | |||
/s/ LAWRENCE J. BLANFORD | April 19, 2013 | |||
Lawrence J. Blanford | Director | |||
/s/ CONNIE K. DUCKWORTH | April 19, 2013 | |||
Connie K. Duckworth | Director | |||
/s/ R. DAVID HOOVER | April 19, 2013 | |||
R. David Hoover | Director | |||
/s/ DAVID W. JOOS | April 19, 2013 | |||
David W. Joos | Director | |||
/s/ ELIZABETH VALK LONG | April 19, 2013 | |||
Elizabeth Valk Long | Director | |||
/s/ ROBERT C. PEW III | April 19, 2013 | |||
Robert C. Pew III | Chair of the Board of Directors, Director | |||
/s/ CATHY D. ROSS | April 19, 2013 | |||
Cathy D. Ross | Director | |||
/s/ PETER M. WEGE II | April 19, 2013 | |||
Peter M. Wege II | Director | |||
/s/ P. CRAIG WELCH, JR. | April 19, 2013 | |||
P. Craig Welch, Jr. | Director | |||
/s/ KATE PEW WOLTERS | April 19, 2013 | |||
Kate Pew Wolters | Director |
Allowance for Losses on Accounts Receivable | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Balance as of beginning of period | $ | 19.6 | $ | 23.1 | $ | 20.6 | ||||||
Additions: | ||||||||||||
Charged to costs and expenses | 2.8 | 2.0 | 7.8 | |||||||||
Charged to other accounts | $ | 0.3 | (0.2 | ) | 0.2 | |||||||
Deductions (1) | (7.9 | ) | (4.7 | ) | (5.0 | ) | ||||||
Other adjustments (2) | (0.3 | ) | (0.6 | ) | (0.5 | ) | ||||||
Balance as of end of period | $ | 14.5 | $ | 19.6 | $ | 23.1 |
(1) | Primarily represents excess of accounts written off over recoveries. |
(2) | Primarily currency translation adjustments and deconsolidations. |
Valuation Allowance for Deferred Income Tax Assets | Year Ended | |||||||||||
February 22, 2013 | February 24, 2012 | February 25, 2011 | ||||||||||
Balance as of beginning of period | $ | 34.5 | $ | 34.9 | $ | 38.2 | ||||||
Additions: | ||||||||||||
Charged to costs and expenses | 40.0 | 2.5 | 1.2 | |||||||||
Charged to other accounts | — | — | — | |||||||||
Deductions and expirations | (4.4 | ) | (1.8 | ) | (4.1 | ) | ||||||
Other adjustments (1) | 0.3 | (1.1 | ) | (0.4 | ) | |||||||
Balance as of end of period | $ | 70.4 | $ | 34.5 | $ | 34.9 |
(1) | Primarily currency translation adjustments. |
Exhibit No. | Description | |
3.1 | Second Restated Articles of Incorporation of the Company, as amended (1) | |
3.2 | Amended By-laws of Steelcase Inc., as amended July 13, 2011 (2) | |
4.1 | Form of Global Note Representing 6.375% Senior Notes Due 2021 (3) | |
4.2 | Officers’ Certificate of Steelcase Inc. establishing the terms of the 6.375% Senior Notes Due 2021 (4) | |
10.1 | Credit Agreement, dated as of December 16, 2009 among Steelcase Inc. and JPMorgan Chase Bank, NA., as Administrative Agent; Bank of America, NA., as Syndication Agent; Fifth Third Bank, as Documentation Agent; and certain other lenders (5) | |
10.2 | Amended and Restated Credit Agreement, dated as of March 19, 2012 among Steelcase Inc. and JPMorgan Chase Bank, NA., as Administrative Agent; Bank of America, NA., Fifth Third Bank and Wells Fargo Bank, NA as Documentation Agents and certain other lenders (6) | |
10.3 | Steelcase Inc. Restoration Retirement Plan (7) | |
10.4 | Steelcase Inc. Deferred Compensation Plan (8) | |
10.5 | 2009-1 Amendment to the Steelcase Inc. Deferred Compensation Plan (9) | |
10.6 | 2013-1 Amendment to the Steelcase Inc. Deferred Compensation Plan (10) | |
10.7 | Deferred Compensation Agreement dated January 12, 1998, between Steelcase Inc. and James P. Hackett (11) | |
10.8 | 2009-1 Amendment to Deferred Compensation Agreement dated January 12, 1998, between Steelcase Inc. and James P. Hackett (12) | |
10.9 | Deferred Compensation Agreement dated May 4, 1998, between Steelcase Inc. and William P. Crawford (13) | |
10.10 | Steelcase Inc. Non-Employee Director Deferred Compensation Plan, as amended and restated effective July 10, 2012 (14) | |
10.11 | Steelcase Inc. Executive Severance Plan (15) | |
10.12 | 2009-1 Amendment to the Steelcase Inc. Executive Severance Plan (16) | |
10.13 | 2010-1 Amendment to the Steelcase Inc. Executive Severance Plan (17) | |
10.14 | 2010-2 Amendment to the Steelcase Inc. Executive Severance Plan (18) | |
10.15 | Steelcase Inc. Executive Supplemental Retirement Plan, as amended and restated as of March 27, 2003 (19) | |
10.16 | 2006-1 Amendment to the Steelcase Inc. Executive Supplemental Retirement Plan (20) | |
10.17 | 2006-2 Amendment to the Steelcase Inc. Executive Supplemental Retirement Plan (21) | |
10.18 | 2009-1 Amendment to the Steelcase Inc. Executive Supplemental Retirement Plan (22) | |
10.19 | 2012-1 Amendment to the Steelcase Inc. Executive Supplemental Retirement Plan (23) | |
10.20 | Steelcase Inc. Management Incentive Plan, as amended and restated as of February 24, 2012 (24) | |
10.21 | Steelcase Inc. Incentive Compensation Plan, as amended and restated as of February 27, 2010 (25) | |
10.22 | Steelcase Inc. Incentive Compensation Plan Form of Performance Units Agreement (FY 2011) (26) | |
10.23 | Steelcase Inc. Incentive Compensation Plan Form of Performance Units Agreement (FY 2012) (27) | |
10.24 | Steelcase Inc. Incentive Compensation Plan Form of Performance Units Agreement (FY 2013) (28) | |
10.25 | Steelcase Inc. Incentive Compensation Plan Form of Performance Units Agreement (TSR) (FY 2014) | |
10.26 | Steelcase Inc. Incentive Compensation Plan Form of Performance Units Agreement (ROIC) (FY 2014) | |
10.27 | Steelcase Inc. Incentive Compensation Plan Form of Restricted Stock Units Agreement (FY 2009) (29) |
Exhibit No. | Description | |
10.28 | Summary of Steelcase Benefit Plan for Outside Directors (30) | |
10.29 | Summary of Compensation for the Board of Directors of Steelcase Inc., as updated October 10, 2012 (31) | |
10.30 | Aircraft Time-Sharing Agreement, dated December 15, 2005, between Steelcase Inc. and James P. Hackett (32) | |
10.31 | Aircraft Time-Sharing Agreement, dated December 15, 2005, between Steelcase Inc. and James P. Hackett (33) | |
10.32 | Amendment to Aircraft Time-Sharing Agreement, dated May 18, 2009, between Steelcase Inc. and James P. Hackett (34) | |
10.33 | Second Amendment to Aircraft Time-Sharing Agreement, dated November 9, 2011, between Steelcase Inc. and James P. Hackett (35) | |
21.1 | Subsidiaries of the Registrant | |
23.1 | Consent of Deloitte & Touche LLP | |
31.1 | Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Certification of CEO and CFO pursuant to 18 U.S.C. Section 1350, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
99.1 | Asset Purchase Agreement between Steelcase Financial Services Inc. and General Electric Capital Corporation, dated May 24, 2002 (36) | |
99.2 | Guaranty by Steelcase Inc., in favor of General Electric Capital Corporation, dated May 24, 2002 (36) | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Schema Document | |
101.CAL | XBRL Calculation Linkbase Document | |
101.LAB | XBRL Labels Linkbase Document | |
101.PRE | XBRL Presentation Linkbase Document | |
101.DEF | XBRL Definition Linkbase Document |
(1) | Filed as Exhibit 3.1 to the Company’s Form 8-K, as filed with the Commission on July 15, 2011 (commission file number 001-13873), and incorporated herein by reference. |
(2) | Filed as Exhibit 3.2 to the Company’s Form 8-K, as filed with the Commission on July 15, 2011 (commission file number 001-13873), and incorporated herein by reference. |
(3) | Filed as Exhibit No. 4.2 to the Company’s Form 8-K, as filed with the Commission on February 3, 2011 (commission file number 001-13873), and incorporated herein by reference. |
(4) | Filed as Exhibit No. 4.3 to the Company’s Form 8-K, as filed with the Commission on February 3, 2011 (commission file number 001-13873), and incorporated herein by reference. |
(5) | Filed as Exhibit No. 10.1 to the Company’s Form 8-K, as filed with the Commission on December 17, 2009 (commission file number 001-13873), and incorporated herein by reference. |
(6) | Filed as Exhibit No. 10.1 to the Company's Form 8-K, as filed with the Commission on March 22, 2012 (commission file number 001-13873), and incorporated herein by reference. |
(7) | Filed as Exhibit No. 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended November 28, 2008, as filed with the Commission on January 7, 2009 (commission file number 001-13873), and incorporated herein by reference. |
(8) | Filed as Exhibit No. 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended November 28, 2008, as filed with the Commission on January 7, 2009 (commission file number 001-13873), and incorporated herein by reference. |
(9) | Filed as Exhibit No. 10.4 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended November 28, 2008, as filed with the Commission on January 7, 2009 (commission file number 001-13873), and incorporated herein by reference. |
(10) | Filed as Exhibit No. 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended August 24, 2012, as filed with the Commission on October 1, 2012 (commission file number 001-13873), and incorporated herein by reference. |
(11) | Filed as Exhibit No. 10.1 to Amendment 2 to the Company's Registration Statement on Form S-1, as filed with the Commission on January 20, 1998 (commission file number 333-41647), and incorporated herein by reference. |
(12) | Filed as Exhibit No. 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended August 29, 2008, as filed with the Commission on October 7, 2008 (commission file number 001-13873), and incorporated herein by reference. |
(13) | Filed as Exhibit No. 10.8 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 27, 1998, as filed with the Commission on May 28, 1998 (commission file number 001-13873), and incorporated herein by reference. |
(14) | Filed as Exhibit No. 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended August 24, 2012, as filed with the Commission on October 1, 2012 (commission file number 001-13873), and incorporated herein by reference. |
(15) | Filed as Exhibit No. 10.1 to the Company’s Form 8-K, as filed with the Commission on February 9, 2007 (commission file number 001-13873), and incorporated herein by reference. |
(16) | Filed as Exhibit No. 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended August 29, 2008, as filed with the Commission on October 7, 2008 (commission file number 001-13873), and incorporated herein by reference. |
(17) | Filed as Exhibit No. 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended August 28, 2009, as filed with the Commission on October 5, 2009 (commission file number 001-13873), and incorporated herein by reference. |
(18) | Filed as Exhibit No. 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended November 27, 2009, as filed with the Commission on January 5, 2010 (commission file number 001-13873), and incorporated herein by reference. |
(19) | Filed as Exhibit No. 10.19 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2003, as filed with the Commission on May 16, 2003 (commission file number 001-13873), and incorporated herein by reference. |
(20) | Filed as Exhibit No. 10.33 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 25, 2005, as filed with the Commission on May 6, 2005 (commission file number 001-13873), and incorporated herein by reference. |
(21) | Filed as Exhibit No. 10.01 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended May 27, 2005, as filed with the Commission on July 1, 2005 (commission file number 001-13873), and incorporated herein by reference. |
(22) | Filed as Exhibit No. 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended August 29, 2008, as filed with the Commission on October 7, 2008 (commission file number 001-13873), and incorporated herein by reference. |
(23) | Filed as Exhibit No. 10.18 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 24, 2012, as filed with the Commission on April 23, 2012 (commission file number 001-13873), and incorporated herein by reference. |
(24) | Filed as Exhibit No. 10.1 to the Company’s Form 8-K, as filed with the Commission on July 16, 2012 (commission file number 001-13873), and incorporated herein by reference. |
(25) | Filed as Exhibit No. 10.1 to the Company’s Form 8-K, as filed with the Commission on June 30, 2010 (commission file number 001-13873), and incorporated herein by reference. |
(26) | Filed as Exhibit No. 10.1 to the Company's Form 8-K, as filed with the Commission on March 31, 2010 |
(27) | Filed as Exhibit No. 10.1 to the Company's Form 8-K, as filed with the Commission on April 15, 2011 (commission file number 001-13873), and incorporated herein by reference. |
(28) | Filed as Exhibit No. 10.1 to the Company's Form 8-K, as filed with the Commission on April 13, 2012 (commission file number 001-13873), and incorporated herein by reference. |
(29) | Filed as Exhibit No. 10.3 to the Company’s Form 8-K, as filed with the Commission on April 3, 2008 (commission file number 001-13873), and incorporated herein by reference. |
(30) | Filed as Exhibit No. 10.42 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 26, 2010, as filed with the Commission on April 26, 2010 (commission file number 001-13873), and incorporated herein by reference. |
(31) | Filed as Exhibit No. 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended November 23, 2012, as filed with the Commission on December 21, 2012 (commission file number 001-13873), and incorporated herein by reference. |
(32) | Filed as Exhibit No. 10.1 to the Company’s Form 8-K, as filed with the Commission on January 30, 2006 (commission file number 001-13873), and incorporated herein by reference. |
(33) | Filed as Exhibit No. 10.2 to the Company’s Form 8-K, as filed with the Commission on January 30, 2006 (commission file number 001-13873), and incorporated herein by reference. |
(34) | Filed as Exhibit No. 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended May 29, 2009, as filed with the Commission on July 1, 2009 (commission file number 001-13873), and incorporated herein by reference. |
(35) | Filed as Exhibit No. 10.2 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended November 25, 2011, as filed with the Commission on January 4, 2012 (commission file number 001-13873), and incorporated herein by reference. |
(36) | Filed as the like numbered exhibits to the Company's Quarterly Report on Form 10-Q for the quarterly period ended May 24, 2002, as filed with the Commission on July 8, 2002 (commission file number 001-13873), and incorporated herein by reference. |
1. | Type of Award: Performance Units as authorized under Article 9 of the Plan. |
2. | Target Number of Performance Units under this Award (the "Target Award"): <<# of Performance Units>> |
3. | Award Date: <<Award Date>> |
4. | Performance Measures: Total Shareholder Return ("TSR") during the three-year Performance Period, as outlined in Article 12 of the Plan. For purposes of this Award, TSR shall be expressed as a compound annual growth rate. |
5. | Performance Period: The Performance Period for this Award begins on the first day of the Company's <<Beginning Fiscal Year>> fiscal year and ends on the last day of the Company's <<Ending Fiscal Year>> fiscal year. |
6. | Number of Performance Units Earned: Except as may be provided in paragraph 7 below, after completion of the Performance Period, the total number of Performance Units will be earned and vested based entirely on Relative TSR (as determined in paragraph 6.A) as of the last day of the Performance Period. For purposes of this Award, TSR shall be expressed as a compound annual growth rate and calculated as follows: |
TSR | = | ( | Ending Stock Price + Dividends Paid Beginning Stock Price | ) | (1/3) - 1 |
A. | To determine Relative TSR, a peer group of companies approved by the Committee will be used. The peer group will be ranked from highest TSR expressed as a compound annual growth rate to lowest TSR expressed as a compound annual growth rate. The number of Performance Units earned based upon Relative TSR shall then be determined by comparing the Company's TSR expressed as a compound annual growth rate to the peer group and based upon the following chart. Interpolation shall be used in the event the Company's percentile rank does not fall directly on one of the ranks listed in the table below and in no event will the payout as a percent of target exceed 200%. |
Relative TSR | Payout as a Percent of Target Award |
80th Percentile and above | 200% |
70th Percentile | 167% |
60th Percentile | 133% |
50th Percentile | 100% |
40th Percentile | 75% |
30th Percentile | 50% |
<30th Percentile | 0% |
B. | Total Performance Units Earned and Vesting |
7. | Dividend-Equivalents on Earned Performance Units: Dividends declared, if any, during the Performance Period with respect to the Shares underlying your earned Performance Units under paragraph 6.B will be paid as dividend equivalents as soon as practicable following the close of the Performance Period, but in no event more than 60 days following the last day of the Performance Period, either in cash or in stock, as determined by the Board of Directors. Cash equivalents will be valued as of the date(s) on which the dividend(s) were declared during the Performance Period. Stock dividends will be valued at the Fair Market Value measured at the close of the Performance Period and will be governed by Article 17 of the Plan. Any of the foregoing payments made are dividend equivalents and are not actual dividends (see paragraph 12). You only become a shareholder upon the transfer of earned Shares into your name. |
8. | Death, Disability or Retirement during the Performance Period: |
A. | If you die or become Disabled while an Employee after <<Award Date + 6 months>> during the Performance Period, the Target Award will be deemed earned and the corresponding number of Shares vested according to the following schedule. |
• | If death or Disability occurs after <<Award Date + 6 months>> through the last day of the Company's <<Beginning Fiscal Year>> fiscal year, one-third of your Target Award will immediately be earned and the corresponding Shares vested. |
• | If death or Disability occurs during the Company's <<Second Fiscal Year>> fiscal year, two-thirds of your Target Award will immediately be earned and the corresponding Shares vested. |
• | If death or Disability occurs during the Company's <<Ending Fiscal Year>> fiscal year, all of your Target Award will immediately be earned and the corresponding Shares vested. |
B. | In the event you become Retirement Eligible during the Performance Period, you will be treated as continuing in employment for purposes of earning and vesting in your Award and will be paid in accordance with paragraph 6 of this Award Agreement. "Retirement Eligible" means your age plus years of continuous service total 80 or more and "Retirement" means your employment is terminated following becoming Retirement Eligible. |
9. | Forfeiture of Awards: |
A. | All unearned Performance Units will be forfeited upon a termination of your employment during the Performance Period for any reason other than death, Disability or Retirement. |
B. | If you engage in any Competition with the Company (as defined in the Plan and determined by the Administrative Committee in its discretion) you will immediately and permanently forfeit the right to receive payment from this Award, whether or not vested. You must return to the Company any gain resulting from this Award at any time within the twelve-month period preceding the date you engaged in Competition with the Company. |
10. | Change in Control: Notwithstanding Article 16.1 of the Plan, upon a Change in Control after << Award Date + 6 months>>, the Target Award shall be deemed earned and a pro rata number of Shares of the Target Award shall be vested and paid based upon the number of months from the Award Date through the effective date of the Change in Control (rounding up to the next whole month) divided by 36. Except as provided below, such Shares shall be paid within thirty (30) days following the effective date of the Change in Control. Any remaining unearned Performance Units shall be forfeited. Notwithstanding anything to the contrary, if the Change in Control event does not constitute a change in ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company under Section 409A of the Code, and if the Company determines your Award constitutes deferred compensation subject to Section 409A of the Code, then the Company will issue you the Shares underlying the portion of your Award that became vested in accordance with the preceding paragraph as soon as practicable following the last day of the Performance Period (and not upon the Change in Control), but in no event more than 60 days following the last day of the Performance Period. |
11. | Transfer: Performance Units may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. |
12. | Voting Rights and Dividends: You will not have voting rights with respect to your Performance Units and, other than as set forth in paragraph 7 of this Award Agreement, you will not be entitled to receive any dividends declared with respect to your Performance Units. You will obtain voting rights and be entitled to receive any dividends once earned Shares are transferred to you. |
13. | Taxes: You may be required to pay to the Company or an Affiliate and the Company and/or Affiliate shall have the right and are hereby authorized to withhold from any payment due or transfer made under this Award or from any compensation or other amount owing to you the amount (in cash, Shares, other securities or other property) of any applicable withholding taxes in respect of this Award or any payment or transfer under or with respect to this Award and to take such other action as may be necessary to satisfy all obligations for the payment of such withholding taxes. |
14. | Administration: This Award Agreement and your rights hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee or its designee is authorized to administer, construe, and make all determinations necessary or |
15. | Required Approvals: This Award Agreement will be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. |
16. | Governing Law: To the extent not preempted by federal law, this Award Agreement will be governed by, and construed in accordance with, the laws of the State of Michigan, USA. |
17. | Amendment: This Award Agreement may be amended or modified by the Committee as long as the amendment or modification does not materially adversely affect your Award. Notwithstanding anything to the contrary contained in the Plan or in this Award Agreement, to the extent that the Company determines that the Performance Units are subject to Section 409A of the Code and fail to comply with the requirements of Section 409A of the Code, the Company reserves the right to amend, restructure, terminate or replace the Performance Units in order to cause the Performance Units to either not be subject to Section 409A of the Code or to comply with the applicable provisions of such section. |
18. | Code Section 409A: The intent of the parties is that payments and benefits under this Award Agreement comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Award Agreement shall be interpreted and be administered to be in compliance therewith. Any payments described in this Award Agreement or the Plan that are due within the "short-term deferral period" as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise. |
(a) | that the Plan is discretionary in nature and may be suspended or terminated at any time; |
(b) | that each grant of a Performance Unit is a one-time benefit which does not create any contractual or other right to receive future grants of Performance Units, or benefits in lieu of Performance Units; |
(c) | that all determinations with respect to future grants, if any, including, but not limited to, the times when the Performance Units will be granted, the number of Units subject to each grant, and the time or times when each Share will vest, will be at the sole discretion of the Board of Directors; |
(d) | that your participation in the Plan does not create a right to further employment with your employer and will not interfere with the ability of your employer to terminate your employment relationship at any time with or without cause; |
(e) | that your participation in the Plan is voluntary; |
(f) | that the value of the Performance Units is an extraordinary item of compensation which is outside the scope of your employment contract, if any; |
(g) | that the Performance Units are not part of normal and expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments, except as may otherwise be provided by the applicable plan or agreement; |
(h) | that the right to the grant ceases upon termination of employment for any reason except as may otherwise be explicitly provided in the Plan or this Award Agreement; and |
(i) | that the future value of the Performance Units is unknown and cannot be predicted with certainty. |
1. | Type of Award: Performance Units as authorized under Article 9 of the Plan. |
2. | Target Number of Performance Units under this Award (the "Target Award"): <<# of Performance Units>> |
3. | Award Date: <<Award Date>> |
4. | Performance Measures: Return on invested capital ("ROIC") during the three-year Performance Period, as outlined in Article 12 of the Plan. For purposes of this Award, ROIC shall be expressed as a three-year average calculation. |
5. | Performance Period: The Performance Period for this Award begins on the first day of the Company's <<Beginning Fiscal Year>> fiscal year and ends on the last day of the Company's <<Ending Fiscal Year>> fiscal year. |
6. | Number of Performance Units Earned: Except as may be provided in paragraph 7 below, after completion of the Performance Period, the total number of Performance Units will be earned and vested based entirely on the three-year average ROIC (as determined in paragraph 6.A.) as of the last day of the Performance Period. For purposes of this Award, ROIC shall be expressed as follows: |
Three-Year Average ROIC | = | ( | ( | NOPAT (Yr1) Average Invested Capital (Yr1) | ) | + | ( | NOPAT (Yr2) Average Invested Capital (Yr2) | ) | + | ( | NOPAT (Yr3) Average Invested Capital (Yr3) | ) | ) | ÷ 3 |
A. | The number of Performance Units earned based upon three-year average ROIC shall be based upon the following chart. Interpolation shall be used in the event the Company's percentile rank does not fall directly on one of the ranks listed in the table below and in no event will the payout as a percent of target exceed 200%. |
ROIC | Payout as a Percent of Target Award |
16.00% and above | 200% |
14.75% | 175% |
13.50% | 150% |
12.25% | 125% |
11.00% | 100% |
9.75% | 75% |
8.50% | 50% |
7.25% | 25% |
Less than 6.00% | 0% |
B. | Total Performance Units Earned and Vesting |
7. | Dividend-Equivalents on Earned Performance Units: Dividends declared, if any, during the Performance Period with respect to the Shares underlying your earned Performance Units under paragraph 6.B will be paid as dividend equivalents as soon as practicable following the close of the Performance Period, but in no event more than 60 days following the last day of the Performance Period, either in cash or in stock, as determined by the Board of Directors. Cash equivalents will be valued as of the date(s) on which the dividend(s) were declared during the Performance Period. Stock dividends will be valued at the Fair Market Value measured at the close of the Performance Period and will be governed by Article 17 of the Plan. Any of the foregoing payments made are dividend equivalents and are not actual dividends (see paragraph 12). You only become a shareholder upon the transfer of earned Shares into your name. |
8. | Death, Disability or Retirement during the Performance Period: |
A. | If you die or become Disabled while an Employee after <<Award Date + 6 months>> during the Performance Period, the Target Award will be deemed earned and the corresponding number of Shares vested according to the following schedule. |
• | If death or Disability occurs after <<Award Date + 6 months>> through the last day of the Company's <<Beginning Fiscal Year>> fiscal year, one-third of your Target Award will immediately be earned and the corresponding Shares vested. |
• | If death or Disability occurs during the Company's <<Second Fiscal Year>> fiscal year, two-thirds of your Target Award will immediately be earned and the corresponding Shares vested. |
• | If death or Disability occurs during the Company's <<Ending Fiscal Year>> fiscal year, all of your Target Award will immediately be earned and the corresponding Shares vested. |
B. | In the event you become Retirement Eligible during the Performance Period, you will be treated as continuing in employment for purposes of earning and vesting in your Award and will be paid in accordance with paragraph 6 of this Award Agreement. "Retirement Eligible" means your age plus years of continuous service total 80 or more and "Retirement" means your employment is terminated following becoming Retirement Eligible. |
9. | Forfeiture of Awards: |
A. | All unearned Performance Units will be forfeited upon a termination of your employment during the Performance Period for any reason other than death, Disability or Retirement. |
B. | If you engage in any Competition with the Company (as defined in the Plan and determined by the Administrative Committee in its discretion) you will immediately and permanently forfeit the right to receive payment from this Award, whether or not vested. You must return to the Company any gain resulting from this Award at any time within the twelve-month period preceding the date you engaged in Competition with the Company. |
10. | Change in Control: Notwithstanding Article 16.1 of the Plan, upon a Change in Control after << Award Date + 6 months>>, the Target Award shall be deemed earned and a pro rata number of Shares of the Target Award shall be vested and paid based upon the number of months from the Award Date through the effective date of the Change in Control (rounding up to the next whole month) divided by 36. Except as provided below, such Shares shall be paid within thirty (30) days following the effective date of the Change in Control. Any remaining unearned Performance Units shall be forfeited. Notwithstanding anything to the contrary, if the Change in Control event does not constitute a change in ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company under Section 409A of the Code, and if the Company determines your Award constitutes deferred compensation subject to Section 409A of the Code, then the Company will issue you the Shares underlying the portion of your Award that became vested in accordance with the preceding paragraph as soon as practicable following the last day of the Performance Period (and not upon the Change in Control), but in no event more than 60 days following the last day of the Performance Period. |
11. | Transfer: Performance Units may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. |
12. | Voting Rights and Dividends: You will not have voting rights with respect to your Performance Units and, other than as set forth in paragraph 7 of this Award Agreement, you will not be entitled to receive any dividends declared with respect to your Performance Units. You will obtain voting rights and be entitled to receive any dividends once earned Shares are transferred to you. |
13. | Taxes: You may be required to pay to the Company or an Affiliate and the Company and/or Affiliate shall have the right and are hereby authorized to withhold from any payment due or transfer made under this Award or from any compensation or other amount owing to you the amount (in cash, Shares, other securities or other property) of any applicable withholding taxes in respect of this Award or any payment or transfer under or with respect to this Award and to take such other action as may be necessary to satisfy all obligations for the payment of such withholding taxes. |
14. | Administration: This Award Agreement and your rights hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee or its designee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, all of which will be binding upon the Participant. |
15. | Required Approvals: This Award Agreement will be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. |
16. | Governing Law: To the extent not preempted by federal law, this Award Agreement will be governed by, and construed in accordance with, the laws of the State of Michigan, USA. |
17. | Amendment: This Award Agreement may be amended or modified by the Committee as long as the amendment or modification does not materially adversely affect your Award. Notwithstanding anything to the contrary contained in the Plan or in this Award Agreement, to the extent that the Company determines that the Performance Units are subject to Section 409A of the Code and fail to comply with the requirements of Section 409A of the Code, the Company reserves the right to amend, restructure, terminate or replace the Performance Units in order to cause the Performance Units to either not be subject to Section 409A of the Code or to comply with the applicable provisions of such section. |
18. | Code Section 409A: The intent of the parties is that payments and benefits under this Award Agreement comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Award Agreement shall be interpreted and be administered to be in compliance therewith. Any payments described in this Award Agreement or the Plan that are due within the "short-term deferral period" as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise. |
(a) | that the Plan is discretionary in nature and may be suspended or terminated at any time; |
(b) | that each grant of a Performance Unit is a one-time benefit which does not create any contractual or other right to receive future grants of Performance Units, or benefits in lieu of Performance Units; |
(c) | that all determinations with respect to future grants, if any, including, but not limited to, the times when the Performance Units will be granted, the number of Units subject to each grant, and the time or times when each Share will vest, will be at the sole discretion of the Board of Directors; |
(d) | that your participation in the Plan does not create a right to further employment with your employer and will not interfere with the ability of your employer to terminate your employment relationship at any time with or without cause; |
(e) | that your participation in the Plan is voluntary; |
(f) | that the value of the Performance Units is an extraordinary item of compensation which is outside the scope of your employment contract, if any; |
(g) | that the Performance Units are not part of normal and expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments, except as may otherwise be provided by the applicable plan or agreement; |
(h) | that the right to the grant ceases upon termination of employment for any reason except as may otherwise be explicitly provided in the Plan or this Award Agreement; and |
(i) | that the future value of the Performance Units is unknown and cannot be predicted with certainty. |
/s/ Deloitte & Touche LLP |
DELOITTE & TOUCHE LLP |
Grand Rapids, Michigan |
April 19, 2013 |
1) | I have reviewed this annual report on Form 10-K of Steelcase Inc.; |
2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4) | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5) | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ James P. Hackett | ||
Name: | James P. Hackett | |
Title: | President and Chief Executive Officer |
1) | I have reviewed this annual report on Form 10-K of Steelcase Inc.; |
2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4) | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5) | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ David C. Sylvester | ||
Name: | David C. Sylvester | |
Title: | Senior Vice President, Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ James P. Hackett | ||
Name: | James P. Hackett | |
Title: | President and Chief Executive Officer |
/s/ David C. Sylvester | ||
Name: | David C. Sylvester | |
Title: | Senior Vice President, Chief Financial Officer |
Goodwill & Other Intangible Assets Goodwill (Tables)
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Feb. 22, 2013
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Goodwill [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill [Table Text Block] | A summary of the changes in goodwill during the years ended February 22, 2013 and February 24, 2012, by reportable segment, is as follows:
________________________
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Correction of Prior Period Financial Statements (Details) (USD $)
In Millions, unless otherwise specified |
Feb. 22, 2013
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Feb. 24, 2012
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Deferred income taxes | $ 101.7 | $ 110.4 |
Retained earnings | 645.0 | 652.0 |
Restatement Adjustment [Member]
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Deferred income taxes | 22.1 | |
Retained earnings | $ 22.1 |
Reportable Segments (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 22, 2013
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Schedule of Segment Reporting Information, by Segment [Table Text Block] |
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Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | Reportable geographic information is as follows:
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Revenue from External Customers by Products and Services [Table Text Block] | The following is a summary of net sales by product category. As product line information is not readily available for the Company as a whole, this summary represents a reasonable estimate of net sales by product category based on the best information available:
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Earnings Per Share (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified |
3 Months Ended | 12 Months Ended | |||||||||
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Feb. 22, 2013
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Nov. 23, 2012
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Aug. 24, 2012
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May 25, 2012
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Feb. 24, 2012
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Nov. 25, 2011
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Aug. 26, 2011
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May 27, 2011
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Feb. 22, 2013
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Feb. 24, 2012
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Feb. 25, 2011
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Earnings Per Share [Abstract] | |||||||||||
Net income | $ (27.5) | $ 23.6 | $ 29.5 | $ 13.2 | $ 14.9 | $ 22.4 | $ 11.9 | $ 7.5 | $ 38.8 | $ 56.7 | $ 20.4 |
Adjustment for earnings attributable to participating securities | (0.6) | (1.0) | (0.3) | ||||||||
Net income used in calculating earnings per share | $ 38.2 | $ 55.7 | $ 20.1 | ||||||||
Weighted-average common shares outstanding including participating securities (in millions) | 127.4 | 131.9 | 132.9 | ||||||||
Adjustment for participating securities (in millions) | (1.8) | (2.3) | (2.0) | ||||||||
Shares used in calculating basic earnings per share (in millions) | 125.6 | 129.6 | 130.9 | ||||||||
Effect of dilutive stock-based compensation (in millions) | 1.7 | 0 | 0 | ||||||||
Shares used in calculating diluted earnings per share (in millions) | 127.3 | 129.6 | 130.9 | ||||||||
Earnings per share, basic | $ (0.22) | $ 0.19 | $ 0.23 | $ 0.10 | $ 0.11 | $ 0.17 | $ 0.09 | $ 0.06 | $ 0.30 | $ 0.43 | $ 0.15 |
Earnings per share, diluted | $ (0.22) | $ 0.18 | $ 0.23 | $ 0.10 | $ 0.11 | $ 0.17 | $ 0.09 | $ 0.06 | $ 0.30 | $ 0.43 | $ 0.15 |
Total common shares outstanding at period end (in millions) | 125.2 | 126.5 | 125.2 | 126.5 | 132.2 | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 3.5 | 3.3 |
Income Taxes Income Tax Reconciliation (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | |||||||||||||||||||||
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Feb. 22, 2013
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Feb. 24, 2012
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Feb. 25, 2011
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U.S. federal statutory tax rate | 35.00% | |||||||||||||||||||||
Tax expense at the U.S. federal statutory rate | $ 19.2 | $ 28.7 | $ 18.0 | |||||||||||||||||||
Foreign tax credits | (57.6) | [1] | 1.3 | [1] | 5.0 | [1] | ||||||||||||||||
Valuation allowance provisions and adjustments | 40.0 | [2] | 0.7 | [2] | 1.2 | [2] | ||||||||||||||||
Goodwill impairment | 12.3 | [3] | 0 | [3] | 0 | [3] | ||||||||||||||||
Healthcare reform | 0 | [4] | 0 | [4] | 11.4 | [4] | ||||||||||||||||
COLI income | (3.1) | [5] | (2.9) | [5] | (5.7) | [5] | ||||||||||||||||
Sale of subsidiary | 0 | [6] | (2.3) | [6] | (1.7) | [6] | ||||||||||||||||
State and local income taxes, net of federal | 2.9 | 1.9 | 1.4 | |||||||||||||||||||
Tax balance adjustments | 0 | [7] | (1.0) | [7] | 4.3 | [7] | ||||||||||||||||
Foreign operations, less applicable foreign tax credits | 2.5 | [8] | 0.7 | [8] | (1.5) | [8] | ||||||||||||||||
Research tax credit | (1.9) | (1.6) | (1.7) | |||||||||||||||||||
Tax reserve adjustments | 0.7 | 1.1 | 0 | |||||||||||||||||||
Other | 1.1 | (1.3) | 0.3 | |||||||||||||||||||
Income tax expense | 16.1 | 25.3 | 31.0 | |||||||||||||||||||
PolyvisionSASandPolyvisionA/S [Member]
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Proceeds from divestiture of businesses | 2.3 | |||||||||||||||||||||
France [Member]
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Valuation allowance provisions and adjustments | 44.2 | [2] | ||||||||||||||||||||
Morocco [Member]
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Valuation allowance provisions and adjustments | 0.4 | [2] | ||||||||||||||||||||
United States [Member]
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Valuation allowance provisions and adjustments | 0.3 | [2] | ||||||||||||||||||||
United Kingdom [Member]
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Valuation allowance provisions and adjustments | (4.9) | [2] | ||||||||||||||||||||
Utilization within one year [Member]
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Foreign tax credits | (21.0) | |||||||||||||||||||||
Remaining utilization within the allowable period [Member]
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Foreign tax credits | (36.6) | |||||||||||||||||||||
Foreign tax credit - deemed dividend [Member]
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Foreign tax credits | (56.7) | |||||||||||||||||||||
Subsidary Cash Dividends [Member]
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Foreign tax credits | $ 0.9 | |||||||||||||||||||||
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Stock Incentive Plan (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 22, 2013
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share Based Payment Award Outstanding Awards [Table Text Block] | Awards currently outstanding under the Incentive Compensation Plan are as follows:
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Schedule Of Share Based Payment Award Performance Units Valuation Assumptions [Table Text Block] | The Monte Carlo simulation was computed using the following assumptions:
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Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Information relating to our stock options is as follows:
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Performance Units [Member]
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block] | The total performance units expense and associated tax benefit in 2013, 2012 and 2011 are as follows:
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Schedule Of Share Based Compensation Performance Units Award Activity [Table Text Block] | The 2013 activity for performance units is as follows:
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Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value [Table Text Block] |
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Restricted Stock Units (RSUs) [Member]
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block] | The total RSUs expense and associated tax benefit in 2013, 2012 and 2011 is as follows:
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Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] | The 2013 activity for RSUs is as follows:
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Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value [Table Text Block] |
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Summary Of Significant Accounting Policies Summary of Signficant Accounting Policies (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 22, 2013
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability [Table Text Block] |
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | Assets and liabilities related to derivative instruments as of February 22, 2013 and February 24, 2012 are summarized below:
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Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block] | Net gains (losses) recognized from derivative instrument activity in 2013, 2012 and 2011 are summarized below:
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Unaudited Quarterly Results (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 22, 2013
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Nov. 23, 2012
|
Aug. 24, 2012
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May 25, 2012
|
Feb. 24, 2012
|
Nov. 25, 2011
|
Aug. 26, 2011
|
May 27, 2011
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Feb. 22, 2013
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Feb. 24, 2012
|
Feb. 25, 2011
|
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Unaudited Quarterly Results [Abstract] | |||||||||||
Revenue | $ 721.4 | $ 727.2 | $ 744.9 | $ 675.2 | $ 690.2 | $ 719.4 | $ 700.5 | $ 639.4 | $ 2,868.7 | $ 2,749.5 | $ 2,437.1 |
Gross profit | 216.0 | 225.9 | 228.1 | 196.0 | 205.6 | 219.8 | 201.2 | 183.1 | 866.0 | 809.7 | 717.5 |
Operating income (loss) | (45.2) | 38.4 | 46.8 | 19.3 | 18.5 | 38.2 | 25.4 | 15.0 | 59.3 | 97.1 | 51.5 |
Net income | $ (27.5) | $ 23.6 | $ 29.5 | $ 13.2 | $ 14.9 | $ 22.4 | $ 11.9 | $ 7.5 | $ 38.8 | $ 56.7 | $ 20.4 |
Earnings per share, basic | $ (0.22) | $ 0.19 | $ 0.23 | $ 0.10 | $ 0.11 | $ 0.17 | $ 0.09 | $ 0.06 | $ 0.30 | $ 0.43 | $ 0.15 |
Earnings per share, diluted | $ (0.22) | $ 0.18 | $ 0.23 | $ 0.10 | $ 0.11 | $ 0.17 | $ 0.09 | $ 0.06 | $ 0.30 | $ 0.43 | $ 0.15 |
Capital Structure Capital Structure (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Feb. 22, 2013
|
Feb. 24, 2012
|
Feb. 25, 2011
|
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Class of Stock [Line Items] | |||
Common stock repurchases, shares | 2.3 | 5.8 | |
Common stock repurchases | $ 19.9 | $ 47.7 | $ 10.8 |
Conversion of Stock, Shares Converted | 2.1 | 3.0 |
Reportable Segments (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 12 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 22, 2013
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Nov. 23, 2012
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Aug. 24, 2012
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May 25, 2012
|
Feb. 24, 2012
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Nov. 25, 2011
|
Aug. 26, 2011
|
May 27, 2011
|
Feb. 22, 2013
|
Feb. 24, 2012
|
Feb. 25, 2011
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Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | $ 2,868.7 | $ 2,749.5 | $ 2,437.1 | |||||||||||||
Operating income (loss) | (45.2) | 38.4 | 46.8 | 19.3 | 18.5 | 38.2 | 25.4 | 15.0 | 59.3 | 97.1 | 51.5 | |||||
Total assets | 1,689.6 | 1,678.9 | 1,689.6 | 1,678.9 | 1,974.4 | |||||||||||
Capital expenditures | 74.0 | 64.9 | 46.0 | |||||||||||||
Depreciation and amortization | 58.3 | 56.4 | 64.4 | |||||||||||||
Long-lived assets | 793.2 | 840.2 | 793.2 | 840.2 | 828.3 | |||||||||||
Customer concentration risk | No single customer represented more than 5% of consolidated revenue. | No single customer represented more than 5% of consolidated revenue. | No single customer represented more than 5% of consolidated revenue. | |||||||||||||
Description of percent of revenue attributible to individual foreign countries | No country other than the U.S. represented greater than 10% of our consolidated revenue | No country other than the U.S. represented greater than 10% of our consolidated revenue | No country other than the U.S. represented greater than 10% of our consolidated revenue | |||||||||||||
Description of percent of long-lived assets attributible to individual foreign countries | No country other than the U.S. represented greater than 10% of our consolidated long-lived assets | No country other than the U.S. represented greater than 10% of our consolidated long-lived assets | No country other than the U.S. represented greater than 10% of our consolidated long-lived assets | |||||||||||||
Percent of revenue attributed to foreign countries | 34.00% | |||||||||||||||
Percent of long-lived assets attributed to foreign countries | 16.00% | 16.00% | ||||||||||||||
Product concentration risk | No other individual product category represented greater than 10% of consolidated revenue | No other individual product category represented greater than 10% of consolidated revenue | No other individual product category represented greater than 10% of consolidated revenue | |||||||||||||
Systems and storage [Member]
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Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | 1,358.7 | 1,306.1 | 1,036.6 | |||||||||||||
Seating [Member]
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Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | 840.7 | 821.6 | 678.9 | |||||||||||||
Other Product Category [Member]
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Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | 669.3 | [1] | 621.8 | [1] | 721.6 | [1] | ||||||||||
Western Europe [Member]
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Segment Reporting Information [Line Items] | ||||||||||||||||
Percent of revenue attributed to foreign countries | 83.00% | |||||||||||||||
United States [Member]
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Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | 1,881.3 | 1,751.0 | 1,518.5 | |||||||||||||
Long-lived assets | 666.1 | 688.7 | 666.1 | 688.7 | 665.9 | |||||||||||
Foreign locations [Member]
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Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | 987.4 | 998.5 | 918.6 | |||||||||||||
Long-lived assets | 127.1 | 151.5 | 127.1 | 151.5 | 162.4 | |||||||||||
Americas [Member]
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Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | 2,015.1 | 1,868.4 | 1,536.0 | |||||||||||||
Operating income (loss) | 168.3 | 122.8 | 67.5 | |||||||||||||
Total assets | 876.6 | 860.6 | 876.6 | 860.6 | 793.5 | |||||||||||
Capital expenditures | 50.9 | 46.6 | 28.4 | |||||||||||||
Depreciation and amortization | 38.6 | 36.6 | 38.7 | |||||||||||||
EMEA [Member]
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Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | 594.8 | 610.5 | 555.8 | |||||||||||||
Operating income (loss) | (50.9) | (9.9) | (18.9) | |||||||||||||
Total assets | 278.1 | 326.3 | 278.1 | 326.3 | 353.4 | |||||||||||
Capital expenditures | 15.1 | 12.7 | 10.3 | |||||||||||||
Depreciation and amortization | 13.1 | 13.4 | 16.2 | |||||||||||||
Other category [Member]
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Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | 258.8 | 270.6 | 345.3 | |||||||||||||
Operating income (loss) | (20.1) | 14.6 | 17.0 | |||||||||||||
Total assets | 155.9 | 179.0 | 155.9 | 179.0 | 189.3 | |||||||||||
Capital expenditures | 7.9 | 4.4 | 5.9 | |||||||||||||
Depreciation and amortization | 6.1 | 6.1 | 9.1 | |||||||||||||
Corporate [Member]
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Segment Reporting Information [Line Items] | ||||||||||||||||
Revenues | 0 | 0 | 0 | |||||||||||||
Operating income (loss) | (38.0) | (30.4) | (14.1) | |||||||||||||
Total assets | 379.0 | 313.0 | 379.0 | 313.0 | 638.2 | |||||||||||
Capital expenditures | 0.1 | 1.2 | 1.4 | |||||||||||||
Depreciation and amortization | $ 0.5 | $ 0.3 | $ 0.4 | |||||||||||||
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Income Taxes Income Tax Contingencies (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Feb. 22, 2013
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Feb. 24, 2012
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Feb. 25, 2011
|
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Liability for Uncertain Tax Positions [Abstract] | |||
Liability for uncertain tax positions, current | $ 0.3 | $ 0 | |
Liability for uncertain tax positions, noncurrent | 1.6 | 1.2 | |
Liability for uncertain tax positions, total | 1.9 | 1.2 | |
Unrecognized Tax Benefits [Roll Forward] | |||
Unrecognized tax benefits, beginning of period | 11.5 | 0.1 | 0.2 |
Gross increases - tax positions in prior period | 1.6 | 0 | 0 |
Gross decreases - tax positions in prior period | (0.9) | 0 | 0 |
Gross increases - tax positions in current period | 0 | 11.5 | 0 |
Lapse of statute of limitations | 0 | (0.1) | (0.1) |
Unrecognized tax benefits, end of period | 12.2 | 11.5 | 0.1 |
Unrecognized Tax Benefits - Other Information [Abstract] | |||
Unrecognized Tax Benefits Resulting in Net Operating Loss Carryforward | 10.3 | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 1.9 |
Income Taxes Components of Income Tax Expense and Sources of Income (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Feb. 22, 2013
|
Feb. 24, 2012
|
Feb. 25, 2011
|
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Sources of Income (Loss) Before Income Tax Expense [Abstract] | |||
Domestic | $ 83.8 | $ 63.8 | $ 39.7 |
Foreign | (28.9) | 18.2 | 11.7 |
Income before income tax expense | 54.9 | 82.0 | 51.4 |
Current Income Taxes [Abstract] | |||
Federal | 12.1 | 0 | 3.3 |
State and Local | 1.4 | 0.4 | 1.0 |
Foreign | 5.6 | 11.3 | 15.4 |
Current Income Taxes | 19.1 | 11.7 | 19.7 |
Deferred Income Taxes [Abstract] | |||
Federal | (48.8) | 18.0 | 17.4 |
State and Local | 3.1 | 2.5 | 1.2 |
Foreign | 42.7 | (6.9) | (7.3) |
Deferred income taxes | (3.0) | 13.6 | 11.3 |
Income Tax Expense | $ 16.1 | $ 25.3 | $ 31.0 |
Employee Benefit Plan Obligations Narrative (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | |||
---|---|---|---|---|
Feb. 28, 2014
|
Feb. 22, 2013
|
Feb. 24, 2012
|
Feb. 25, 2011
|
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Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Pension Contributions | $ 6 | |||
Other Postretirement Benefits Payments | 5 | |||
Deferred Compensation Arrangement with Individual, Compensation Expense | 4.8 | 2.2 | 5.1 | |
Defined Benefit Plan, Ultimate Health Care Cost Trend Rate | 4.50% | 4.50% | ||
Defined Contribution Plan, Cost Recognized | 19.0 | 16.3 | 3.4 | |
Defined Contribution Plan, Estimated Future Employer Contributions in Next Fiscal Year | 20.6 | |||
Defined Benefit Plan, Effect of Plan Amendment on Accumulated Benefit Obligation | 20.9 | 24.4 | ||
Defined Benefit Plan, Description of Plan Amendment | we changed the model of the post-retirement benefit plan and cost-sharing provisions for the post-65 retiree population. This change resulted in a company-provided fixed subsidy towards post-retirement healthcare benefits for eligible retirees. | we changed the cost sharing provisions of the post-retirement benefit plan that provides medical benefits to certain North American-based retirees and eligible dependents, which increased the required contributions for certain retirees. | ||
Prescription Drug Benefit, Reduction in Deferred Tax Asset due to change in Medicare Part D | 11.4 | |||
Other Postretirement Benefit Plans, Defined Benefit [Member]
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Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined Benefit Plan, Actuarial Gain (Loss) | $ 12.4 | $ (0.9) | ||
Pre-Age 65 Retirees [Member]
|
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Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined Benefit Plan, Health Care Cost Trend Rate Assumed for Next Fiscal Year | 7.51% | 8.10% | ||
Post-Age 65 Retirees [Member]
|
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Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined Benefit Plan, Health Care Cost Trend Rate Assumed for Next Fiscal Year | 6.48% |
Stock Incentive Plan
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Feb. 22, 2013
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Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Incentive Plan | STOCK INCENTIVE PLAN The Steelcase Inc. Incentive Compensation Plan (the “Incentive Compensation Plan”) provides for the issuance of share-based compensation awards to employees and members of the Board of Directors. There are 25,000,000 shares of Class A Common Stock reserved for issuance under our Incentive Compensation Plan, with 12,751,324 and 11,513,445 shares remaining for future issuance under our Incentive Compensation Plan as of February 22, 2013 and February 24, 2012, respectively. A variety of awards may be granted under the Incentive Compensation Plan including stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units, performance shares, performance units, cash-based awards, phantom shares and other share-based awards. Outstanding awards under the Incentive Compensation Plan vest over a period of one, three or five years or at the time a participant becomes a qualified retiree. Stock options granted under the Incentive Compensation Plan may be either incentive stock options intended to qualify under Section 422 of the Code or non-qualified stock options not so intended. The Board may amend or terminate the Incentive Compensation Plan at its discretion subject to certain provisions as stipulated within the plan. Awards currently outstanding under the Incentive Compensation Plan are as follows:
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We have not granted any non-qualified stock option awards since 2003. All options granted had a 10-year term, and thus all outstanding stock options expired during 2013. Subsequent to 2003, we have used restricted stock, restricted stock units, performance shares and performance units as the primary share-based compensation awards, and the majority of the outstanding awards as of February 22, 2013 are held by our executive officers. In the event of a “change of control,” as defined in the Incentive Compensation Plan,
Performance Units Performance units have been granted only to our executive officers. These awards are earned after a three-year performance period and only if the performance criteria stated in the applicable award are achieved. The performance units granted in 2013, 2012 and 2011 can be earned based on achievement of certain total shareholder return (“TSR”) results. The 2013 and 2012 awards are earned based on our TSR relative to a comparison group of companies. The number of units that may be earned can range from 0% to 200%. A dividend equivalent is calculated based on the actual number of units earned at the end of the performance period, equal to the dividends that would have been payable on the earned units had they been held during the entire performance period as Class A Common Stock. At the end of the performance period, the dividend equivalents are paid in the form of cash or Class A Common Stock at the discretion of the Board of Directors. The awards will be forfeited if a participant leaves the company for reasons other than retirement, disability or death or if the participant engages in any competition with us, as defined in the plan and determined by the Administrative Committee in its discretion. The 2011 awards are earned based on our TSR relative to a comparison group of companies. The number of units that may be earned ranged from 25% to 200%. Based on actual performance results, the 2011 performance units were earned at 150% of the target level and 1,018,500 shares of Class A Common Stock were issued to participants in Q1 2014. Participants received a cash dividend equivalent based on the underlying target award during the performance period equal to the dividends we declared and paid on our Class A Common Stock, which were included in Dividends paid on the Consolidated Statements of Cash Flows. The aggregate number of shares of Class A Common Stock that ultimately may be issued under performance units where the performance period has not been completed ranges from 0 to 1,932,030 shares as of February 22, 2013. After completion of the performance period, the number of performance units earned will be issued as shares of Class A Common Stock. Performance units are expensed and recorded in Additional paid-in capital on the Consolidated Balance Sheets over the performance periods. The fair value of the performance units awarded during 2013, 2012 and 2011 were calculated on the grant date using the Monte Carlo simulation model, which resulted in a fair value of $6.4, $8.1 and $7.1, respectively. The Monte Carlo simulation was computed using the following assumptions:
________________________
The total performance units expense and associated tax benefit in 2013, 2012 and 2011 are as follows:
The 2013 activity for performance units is as follows:
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As of February 22, 2013, there was $2.8 of remaining unrecognized compensation cost related to nonvested performance units. That cost is expected to be recognized over a remaining weighted-average period of 1.7 years. The total fair value of performance units vested was $14.0, $7.0 and $0 during 2013, 2012 and 2011, respectively. Restricted Stock Units Restricted stock units (“RSUs”) have restrictions on transfer which lapse one, three or five years (depending on the terms of the individual grant) after the date of grant, at which time RSUs are issued as unrestricted shares of Class A Common Stock. These awards are subject to forfeiture if a participant leaves the company for reasons other than retirement, disability, death or termination by us without cause prior to the vesting date. RSUs are expensed and recorded in Additional paid-in capital on the Consolidated Balance Sheets over the requisite service period based on the value of the shares on the grant date.
The total RSUs expense and associated tax benefit in 2013, 2012 and 2011 is as follows:
Holders of RSUs receive cash dividends equal to the dividends we declare and pay on our Class A Common Stock, which are included in Dividends paid on the Consolidated Statements of Cash Flows. The 2013 activity for RSUs is as follows:
There was $4.8 of remaining unrecognized compensation cost related to RSUs as of February 22, 2013. That cost is expected to be recognized over a weighted-average period of 2.1 years. The total fair value of restricted stock and RSUs vested was $1.7, $0.8 and $2.3 during 2013, 2012 and 2011, respectively. Stock Options Information relating to our stock options is as follows:
There were no options outstanding as of February 22, 2013. There were no options exercised in 2013, 2012 and 2011. Unrestricted Share Grants Under the Incentive Compensation Plan, unrestricted shares may be issued to members of the Board of Directors as compensation for director’s fees, as a result of directors’ elections to receive unrestricted shares in lieu of cash payment. We granted a total of 43,238, 38,888 and 41,720 unrestricted shares at a weighted average grant date fair value per share of $9.62, $8.39 and $7.73 during 2013, 2012 and 2011, respectively. |
Restructuring Activities (Tables)
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Feb. 22, 2013
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring and Related Costs [Table Text Block] | Restructuring costs are summarized in the following table:
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Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | Below is a summary of the charges, payments and adjustments to the restructuring reserve balance during 2013, 2012 and 2011:
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Short-Term Borrowings And Long-Term Debt (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 22, 2013
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Debt Obligations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments [Table Text Block] |
________________________
In addition, we have a $12.9 unsecured committed revolving bank facility which is utilized primarily for standby letters of credit in support of our self-insured workers’ compensation program. As of February 22, 2013 and February 24, 2012, we had $12.1 and $12.3, respectively, in outstanding standby letters of credit against this facility. We had no draws against our standby letters of credit during 2013 or 2012.
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Schedule of Maturities of Long-term Debt [Table Text Block] | The annual maturities of short-term borrowings and long-term debt for each of the following five years are as follows:
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Employee Benefit Plan Obligations Minimum Pension Liability (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | ||
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Feb. 22, 2013
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Feb. 24, 2012
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Feb. 25, 2011
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Compensation and Retirement Disclosure [Abstract] | |||
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Foreign Currency Translation Adjustments,after Tax | $ 0.4 | $ 0.4 | |
Other Comprehensive Income (Loss), Amortization, Pension and Other Postretirement Benefit Plans, Net Gain (Loss) Recognized in Net Periodic Benefit Cost, after Tax | 0.9 | (0.7) | |
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Prior Service Cost, before Tax | (9.3) | 9.0 | |
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), Minimum Pension Liability, before Tax | 23.4 | 23.4 | 22.9 |
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), Minimum Pension Liability, Tax | (4.5) | (3.7) | (3.1) |
Defined Benefit Plan, Accumulated Other Comprehensive Income Minimum Pension Liability, after Tax | 18.9 | 19.7 | 19.8 |
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Prior Service Cost Arising During Period, before Tax | 20.8 | ||
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Prior Service Cost Arising During Period, Tax | (8.0) | ||
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Prior Service Costs Arising During Period, Net of Tax | 12.8 | ||
Other Comprehensive Income (Loss), Amortization, Pension and Other Postretirement Benefit Plans, Net Prior Service Cost Recognized in Net Periodic Benefit Cost, before Tax | (9.3) | (11.8) | |
Other Comprehensive Income (Loss), Amortization, Pension and Other Postretirement Benefit Plans, Net Prior Service Cost Recognized in Net Periodic Benefit Cost, Tax | 3.5 | 4.5 | |
Other Comprehensive Income (Loss), Amortization, Pension and Other Postretirement Benefit Plans, Net Prior Service Cost Recognized in Net Periodic Pension Cost, Net of Tax | (5.8) | (7.3) | |
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Prior Service Cost, Tax | 3.5 | (3.5) | |
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Prior Service Cost, after Tax | (5.8) | 5.5 | |
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Unamortized Gain (Loss) Arising During Period, before Tax | 7.6 | (9.8) | |
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Unamortized Gain (Loss) Arising During Period, Tax | (3.9) | 3.1 | |
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Unamortized Gain (Loss) Arising During Period, Net of Tax | (3.7) | (6.7) | |
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Gain (Loss), before Tax | 9.0 | (8.7) | |
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, before Tax | 0 | (0.5) | (15.9) |
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Tax | (0.8) | (0.6) | |
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax | 0.8 | 0.1 | (11.3) |
Other Comprehensive Income (Loss), Amortization, Pension and Other Postretirement Benefit Plans, Net Gain (Loss) Recognized in Net Periodic Benefit Cost, before Tax | (1.4) | (1.1) | |
Other Comprehensive Income (Loss), Amortization, Pension and Other Postretirement Benefit Plans, Net Gain (Loss) Recognized in Net Periodic Benefit Cost, Tax | (0.5) | (0.4) | |
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Gain (Loss), Tax | (4.4) | 2.7 | |
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Gain (Loss), after Tax | 4.6 | 6.0 | |
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Foreign Currency Translation Adjustments, before Tax | 0.3 | 0.2 | |
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Foreign Currency Translation Adjustments, Tax | $ 0.1 | $ 0.2 |
Property, Plant And Equipment (Tables)
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Feb. 22, 2013
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Table Text Block] |
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Nature Of Operations (Details)
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Feb. 22, 2013
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Nature of Operations [Abstract] | |
Entity Number of Employees | 10,400 |
Number of Principal Locations | 21 |
Number of Distribution Locations | 800 |
Investments In Unconsolidated Affiliates (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | ||
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Feb. 22, 2013
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Feb. 24, 2012
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Feb. 25, 2011
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Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investments | $ 47.5 | $ 41.9 | |
Cost Method Investments | 5.8 | 5.8 | |
Investments in unconsolidated affiliates | 53.3 | 47.7 | |
Proceeds from Equity Method Investment, Dividends or Distributions | 5.3 | 5.8 | 2.4 |
Revenue from Related Parties | 247.3 | 219.3 | 182.8 |
Due from Affiliates | 0 | 15.9 | |
Equity in Earnings of Unconsolidated Affiliates [Abstract] | |||
Income (Loss) from Equity Method Investments | 9.4 | 8.3 | 6.3 |
Summarized Financial Information [Abstract] | |||
Equity Method Investment, Summarized Financial Information, Current Assets | 143.5 | 125.9 | |
Equity Method Investment, Summarized Financial Information, Noncurrent Assets | 38.2 | 35.0 | |
Equity Method Investment, Summarized Financial Information, Assets | 181.7 | 160.9 | |
Equity Method Investment, Summarized Financial Information, Current Liabilities | 82.1 | 69.3 | |
Equity Method Investment, Summarized Financial Information, Noncurrent Liabilities | 19.9 | 27.9 | |
Equity Method Investment, Summarized Financial Information, Liabilities | 102.0 | 97.2 | |
Equity Method Investment, Summarized Financial Information, Revenue | 515.9 | 472.9 | 294.4 |
Equity Method Investment, Summarized Financial Information, Gross Profit (Loss) | 151.6 | 140.6 | 69.0 |
Equity Method Investment, Summarized Financial Information, Income (Loss) before income tax | 34.4 | 33.1 | 24.0 |
Equity Method Investment, Summarized Financial Information, Net Income (Loss) | 31.6 | 30.2 | 20.6 |
IDEO [Member]
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Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investments | 16.1 | 14.5 | |
Equity Method Investment, Ownership Percentage | 20.00% | 20.00% | |
Equity in Earnings of Unconsolidated Affiliates [Abstract] | |||
Income (Loss) from Equity Method Investments | 2.6 | 2.5 | 0.6 |
Equity Method Investee, Total Dealers [Member]
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Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investments | 18.4 | 20.1 | |
Equity in Earnings of Unconsolidated Affiliates [Abstract] | |||
Income (Loss) from Equity Method Investments | 3.9 | 3.1 | 2.7 |
Cost Method Investee, Total Dealers [Member] [Member]
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Schedule of Equity Method Investments [Line Items] | |||
Cost Method Investments | 5.8 | 5.8 | |
Cost Method Investment, Ownership Percentage | Less than 10% | ||
Cost and Equity Method Investees, Total Dealers [Member]
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Schedule of Equity Method Investments [Line Items] | |||
Investments in unconsolidated affiliates | 24.2 | 25.9 | |
Equity Method Investee, Manufacturing Joint Ventures [Member]
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Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investments | 8.3 | 7.3 | |
Equity in Earnings of Unconsolidated Affiliates [Abstract] | |||
Income (Loss) from Equity Method Investments | 3.4 | 2.7 | 3.0 |
Equity Method Investee, Other [Member]
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Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investments | 4.7 | 0 | |
Equity Method Investment, Ownership Percentage | 9.00% | ||
Equity in Earnings of Unconsolidated Affiliates [Abstract] | |||
Income (Loss) from Equity Method Investments | $ (0.5) | $ 0 | $ 0 |
Minimum [Member]
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Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investment, Ownership Percentage | 20.00% | ||
Minimum [Member] | Equity Method Investee, Total Dealers [Member]
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Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investment, Ownership Percentage | 20.00% | 20.00% | |
Minimum [Member] | Equity Method Investee, Manufacturing Joint Ventures [Member]
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Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investment, Ownership Percentage | 25.00% | 25.00% | |
Minimum [Member] | Equity Method Investee, Other [Member]
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Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investment, Ownership Percentage | 8.00% | ||
Maximum [Member]
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Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investment, Ownership Percentage | 50.00% | ||
Maximum [Member] | Equity Method Investee, Total Dealers [Member]
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Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investment, Ownership Percentage | 40.00% | 40.00% | |
Maximum [Member] | Equity Method Investee, Manufacturing Joint Ventures [Member]
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Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investment, Ownership Percentage | 49.00% | 49.00% | |
Maximum [Member] | Equity Method Investee, Other [Member]
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Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investment, Ownership Percentage | 39.00% |
Property, Plant And Equipment (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||
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Feb. 22, 2013
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Feb. 24, 2012
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Feb. 22, 2013
Land and Land Improvements [Member]
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Feb. 24, 2012
Land and Land Improvements [Member]
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Feb. 22, 2013
Building and Building Improvements [Member]
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Feb. 24, 2012
Building and Building Improvements [Member]
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Feb. 22, 2013
Building and Building Improvements [Member]
Minimum [Member]
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Feb. 22, 2013
Building and Building Improvements [Member]
Maximum [Member]
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Feb. 22, 2013
Machinery and Equipment [Member]
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Feb. 24, 2012
Machinery and Equipment [Member]
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Feb. 22, 2013
Machinery and Equipment [Member]
Minimum [Member]
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Feb. 22, 2013
Machinery and Equipment [Member]
Maximum [Member]
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Feb. 22, 2013
Furniture and Fixtures [Member]
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Feb. 24, 2012
Furniture and Fixtures [Member]
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Feb. 22, 2013
Furniture and Fixtures [Member]
Minimum [Member]
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Feb. 22, 2013
Furniture and Fixtures [Member]
Maximum [Member]
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Feb. 22, 2013
Leasehold Improvements [Member]
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Feb. 24, 2012
Leasehold Improvements [Member]
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Feb. 22, 2013
Leasehold Improvements [Member]
Minimum [Member]
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Feb. 22, 2013
Leasehold Improvements [Member]
Maximum [Member]
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Feb. 22, 2013
Software and Software Development Costs [Member]
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Feb. 24, 2012
Software and Software Development Costs [Member]
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Feb. 22, 2013
Software and Software Development Costs [Member]
Minimum [Member]
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Feb. 22, 2013
Software and Software Development Costs [Member]
Maximum [Member]
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Feb. 22, 2013
Construction in Progress [Member]
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Feb. 24, 2012
Construction in Progress [Member]
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Property, Plant and Equipment [Line Items] | ||||||||||||||||||||||||||
Property, Plant and Equipment, Useful Life | 10 years | 40 years | 3 years | 15 years | 5 years | 8 years | 3 years | 10 years | 3 years | 10 years | ||||||||||||||||
Property, Plant and Equipment, Gross | $ 1,574.6 | $ 1,562.2 | $ 38.6 | $ 39.0 | $ 526.3 | $ 493.3 | $ 715.4 | $ 746.2 | $ 68.0 | $ 69.7 | $ 53.0 | $ 56.5 | $ 139.0 | $ 140.4 | $ 34.3 | $ 17.1 | ||||||||||
Property, plant and equipment, accumulated depreciation | (1,221.4) | (1,215.3) | ||||||||||||||||||||||||
Property, plant and equipment, net | $ 353.2 | $ 346.9 | $ 118.1 | $ 107.7 | $ 126.6 | $ 145.5 |
Commitments And Guarantees (Tables)
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Feb. 22, 2013
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Our estimated future minimum annual rental commitments and sublease rental income under non-cancelable operating leases are as follows:
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Schedule of Guarantor Obligations, Summarized [Table Text Block] | The maximum amount of future payments (undiscounted and without reduction for any amounts that may possibly be recovered from third parties) we could be required to make under guarantees and performance bonds are as follows:
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Consolidated Statements Of Cash Flows (USD $)
In Millions, unless otherwise specified |
12 Months Ended | |||||
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Feb. 22, 2013
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Feb. 24, 2012
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Feb. 25, 2011
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OPERATING ACTIVITIES | ||||||
Net income | $ 38.8 | $ 56.7 | $ 20.4 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 58.3 | 56.4 | 64.4 | |||
Changes in cash surrender value of COLI | 1.8 | (4.5) | (13.5) | |||
Goodwill impairment charges | 59.9 | [1] | 0 | 0 | ||
(Gain) loss on disposal of fixed assets | 1.6 | 4.6 | (5.7) | |||
Gain from IDEO ownership transition | 0 | 0 | (13.2) | |||
Deferred income taxes | (3.0) | 13.6 | 11.3 | |||
Pension and post-retirement benefit cost (benefit) | 1.0 | (0.9) | 4.0 | |||
Restructuring costs | 34.7 | 30.5 | 30.6 | |||
Non-cash stock compensation | 9.6 | 11.6 | 7.4 | |||
Other | (4.8) | 0.4 | (6.5) | |||
Changes in operating assets and liabilities, net of acquisitions, divestures, and deconsolidations: | ||||||
Accounts receivable | (12.8) | 8.0 | (65.2) | |||
Inventories | 2.1 | (17.1) | (28.5) | |||
Other assets | 2.4 | 7.3 | 10.9 | |||
Accounts payable | 3.4 | (2.0) | 34.2 | |||
Employee compensation liabilities | 5.8 | (32.5) | 3.4 | |||
Employee benefit obligations | (2.9) | (0.4) | (23.0) | |||
Accrued expenses and other liabilities | (8.6) | (30.0) | 41.7 | |||
Net cash provided by operating activities | 187.3 | 101.7 | 72.7 | |||
INVESTING ACTIVITIES | ||||||
Capital expenditures | (74.0) | (64.9) | (46.0) | |||
Proceeds from disposal of fixed assets | 15.5 | 11.7 | 44.9 | |||
Purchases of short-term investments | (78.6) | (195.8) | (335.4) | |||
Liquidations of short-term investments | 62.6 | 466.1 | 59.0 | |||
Proceeds from IDEO ownership transition | 0 | 0 | 29.8 | |||
Acquisitions, net of cash acquired | (6.2) | (20.9) | 0 | |||
Other | (4.8) | 7.0 | (6.6) | |||
Net cash provided by (used in) investing activities | (85.5) | 203.2 | (254.3) | |||
FINANCING ACTIVITIES | ||||||
Dividends paid | (45.8) | (31.7) | (21.6) | |||
Common stock repurchases | (19.9) | (47.7) | (10.8) | |||
Excess tax benefit from vesting of stock awards | 3.8 | 1.1 | 0.4 | |||
Borrowings of long-term debt, net of issuance costs | 0.3 | 0.2 | 247.4 | |||
Repayments of long-term debt | (2.6) | (255.5) | (2.8) | |||
Borrowings of lines of credit | 1.5 | 0 | 0.2 | |||
Repayments of lines of credit | (1.5) | (0.7) | (1.7) | |||
Net cash provided by (used in) financing activities | (64.2) | (334.3) | 211.1 | |||
Effect of exchange rate changes on cash and cash equivalents | 0.7 | (0.7) | 1.6 | |||
Net increase (decrease) in cash and cash equivalents | 38.3 | (30.1) | 31.1 | |||
Cash and cash equivalents, beginning of year | 112.1 | 142.2 | 111.1 | |||
Cash and cash equivalents, end of year | 150.4 | 112.1 | 142.2 | |||
Supplemental Cash Flow Information: | ||||||
Income taxes paid, net of refunds received | 9.4 | 10.7 | (2.3) | |||
Interest paid, net of amounts capitalized | $ 17.4 | $ 26.2 | $ 17.7 | |||
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Property, Plant And Equipment Narrative (Details) (USD $)
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12 Months Ended | ||
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Feb. 22, 2013
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Feb. 24, 2012
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Feb. 25, 2011
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Property, Plant and Equipment [Line Items] | |||
Gain (Loss) on Sale of Property Plant Equipment | $ (1,600,000) | $ (4,600,000) | $ 5,700,000 |
Property, plant and equipment, net | 353,200,000 | 346,900,000 | |
Depreciation | 53,600,000 | 52,700,000 | 61,200,000 |
Construction in Progress, Estimated Cost to Complete | 22,200,000 | 12,700,000 | |
Impairment of Long-Lived Assets to be Disposed of | 2,800,000 | 4,000,000 | |
Real Estate Held-for-sale | 14,800,000 | ||
Machinery and Equipment [Member]
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Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, net | 126,600,000 | 145,500,000 | |
Construction in Progress [Member]
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Property, Plant and Equipment [Line Items] | |||
Interest Costs Capitalized | 0 | 800,000 | 400,000 |
Building and Building Improvements [Member]
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Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, net | 118,100,000 | 107,700,000 | |
Impairment of Long-Lived Assets to be Disposed of | $ 12,400,000 |