Bemis Company 2007 Annual Report - IR Solutions

The Company capitalizes direct costs (internal and external) of materials and services used in the development and purchase of
internal-use software. Amounts capitalized are amortized on a straight-line basis over a period of three to seven years and are reported as
a component of machinery and equipment within property and equipment.
Goodwill: Goodwill represents the excess of cost over the fair value of net assets acquired in business combinations. Effective January 1,
2002, the Company adopted the reporting requirements of Statement of Financial Accounting Standards (FAS) No. 141, Business
Combinations, and FAS No. 142, Goodwill and Other Intangible Assets, and as required, has applied its requirements to acquisitions
made after June 30, 2001. In accordance with FAS No. 142, goodwill and indefinite-lived intangible assets are no longer amortized, but
are reviewed at least annually for impairment. The Company tests goodwill and indefinite-lived intangible assets for impairment on an
annual basis, or whenever there is an impairment indicator, using a fair-value based approach.
Intangible assets: Contractual or separable intangible assets that have finite useful lives are being amortized against income using the
straight-line method over their estimated useful lives, with periods ranging from one to 30 years. The straight-line method of amortization
reflects an appropriate allocation of the costs of the intangible assets to earnings in proportion to the amount of economic benefits
obtained by the Company in each reporting period. The Company tests finite-lived intangible assets for impairment whenever there is an
impairment indicator. Intangible assets are tested for impairment by comparing anticipated undiscounted future cash flows from
operations to net book value.
Financial instruments: The Company recognizes all derivative instruments on the balance sheet at fair value. Derivatives that are not
hedges are adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair
value of derivatives are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through
earnings or recognized in stockholders’ equity through other comprehensive income until the hedged item is recognized. Gains or losses,
if any, related to the ineffective portion of any hedge are recognized through earnings in the current period. Note 14 contains expanded
details relating to specific derivative instruments included on the Company’s balance sheet, such as forward foreign currency exchange
contracts and interest rate swap arrangements.
Treasury stock: Repurchased common stock is stated at cost and is presented as a separate reduction of stockholders’ equity. At
December 31, 2007, 5.1 million common shares can be repurchased, at management’s discretion, under authority granted by the
Company’s Board of Directors in 2007.
Preferred stock purchase rights: On July 29, 1999, the Company's Board of Directors adopted a Shareholder Rights Plan by declaring a
dividend of one preferred share purchase right for each outstanding share of common stock. Under certain circumstances, a right may be
exercised to purchase one four-hundredth of a share of Series A Junior Preferred Stock for $60, subject to adjustment. The rights become
exercisable if, subject to certain exceptions, a person or group acquires beneficial ownership of 15 percent or more of the Company's
outstanding common stock or announces an offer which would result in such person acquiring beneficial ownership of 15 percent or more
of the Company's outstanding common stock. If a person or group acquires beneficial ownership of 15 percent or more of the Company’s
outstanding common stock, subject to certain exceptions, each right will entitle its holder to buy from the Company, common stock of the
Company having a market value of twice the exercise price of the right. The rights expire August 23, 2009, and may be redeemed by the
Company for $.001 per right at any time before a person becomes a beneficial owner of 15 percent or more of the Company's outstanding
common stock. The Company's Board of Directors has designated 600,000 shares of Series A Junior Preferred Stock with a par value of
$1 per share that relate to the Shareholder Rights Plan. At December 31, 2007, none of these shares were issued or outstanding.
Note 2 – NEW ACCOUNTING PRONOUNCEMENTS
In December 2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards
(FAS) No. 160, Noncontrolling Interest in Consolidated Financial Statements, an amendment of ARB No. 51 (FAS No. 160), which
amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation
of a subsidiary. The standard is effective for the Company on January 1, 2009. We are currently evaluating the impact of adopting FAS
No. 160 on our consolidated financial position and results of operations.
In December 2007, the FASB issued FAS No. 141 (Revised 2007), Business Combinations (FAS 141(R)). FAS
141(R) establishes principles and requirements for how an acquirer in a business combination recognizes and measures in its financial
statements, the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree. The statement also
provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to
disclose to enable users of the financial statements to evaluate the nature and financial effects of business combinations. FAS 141(R) is
effective on a prospective basis for financial statements issued for fiscal years beginning after December 15, 2008. Accordingly, any
business combination we enter into after December 31, 2008 will be subject to this new standard.
In February 2007, the FASB issued FAS No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities-Including an amendment of FASB Statement No. 115 (FAS No. 159), which permits entities to choose to measure many
financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the
opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to
apply complex hedge accounting provisions. The standard is effective for the Company on January 1, 2008, and its adoption then is not
expected to have a material effect on its consolidated financial position and results of operations.
In September 2006, the FASB issued FAS No. 157, Fair Value Measurements (FAS No. 157), which defines fair value,
establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair
value measurements. FAS No. 157 will apply whenever another standard requires (or permits) assets or liabilities to be measured at fair
value. The standard does not expand the use of fair value to any new circumstances, and is effective for the Company on January 1, 2008.
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