Rayovac 2008 Annual Report Download - page 72

Table of Contents
Index to Financial Statements
Sensitivity Analysis
The analysis below is hypothetical and should not be considered a projection of future risks. Earnings projections are before tax.
As of September 30, 2008, the potential change in fair value of outstanding interest rate derivative instruments, assuming a 1 percentage point unfavorable
shift in the underlying interest rates would be a loss of $4.0 million. The net impact on reported earnings, after also including the reduction in one year’s interest
expense on the related debt due to the same shift in interest rates, would be a net gain of $10.3 million. The same hypothetical shift in interest rates as of
September 30, 2007 would have resulted in a loss of $8.3 million in the fair value of outstanding interest rate derivative instruments, and the net impact on
reported earnings, after also including the reduction in one year’s interest expense on the related debt due to the shift in interest rates, would have been a net gain
of $5.3 million.
As of September 30, 2008, the potential change in fair value of outstanding foreign exchange derivative instruments, assuming a 10% unfavorable change
in the underlying exchange rates would be a loss of $25.0 million. The net impact on reported earnings, after also including the effect of the change in the
underlying foreign currency-denominated exposures, would be a net gain of $5.0 million. The same hypothetical shift in exchange rates as of September 30, 2007
would have resulted in a loss of $30.0 million in the fair value of outstanding foreign exchange derivative instruments, and the net impact on reported earnings,
after also including the effect of the change in the underlying foreign currency-denominated exposures, would have been a net gain of $.8 million.
As of September 30, 2008, the potential change in fair value of outstanding commodity price derivative instruments, assuming a 10% unfavorable change
in the underlying commodity prices would be a loss of $4.7 million. The net impact on reported earnings, after also including the reduction in cost of one year’s
purchases of the related commodities due to the same change in commodity prices, would be a net gain of $3.5 million. The same hypothetical shift in
commodity prices as of September 30, 2007 would have resulted in a loss of $6.2 million in the fair value of outstanding commodity price derivative instruments,
and the net impact on reported earnings, after also including the reduction in cost of one year’s purchases of the related commodities due to the same change in
commodity prices, would have been a net gain of $2.7 million.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required for this Item is included in this Annual Report on Form 10-K on pages 122 through 183, inclusive and is incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our principal executive officer and principal financial
officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act) pursuant to Rule 13a-15(b) under the Exchange Act as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, our
Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures are effective to ensure that
information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the
time periods specified in applicable SEC rules and forms, and is accumulated and communicated to the Company’s management, including the Company’s Chief
Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
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Source: Spectrum Brands, Inc, 10-K, December 10, 2008