Rayovac 2013 Annual Report Download - page 110

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SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(Amounts in thousands, except per share figures)
with the increase and extension, the Company incurred $323 of fees during Fiscal 2013. The fees are classified as
Debt issuance costs within the accompanying Consolidated Statements of Financial Position and are being
amortized as an adjustment to interest expense over the remaining life of the ABL Facility.
On March 28, 2013, the Company amended its ABL Facility to conform certain provisions to reflect the
acquisition of the HHI Business. In connection with the amendment, the Company incurred $206 of fees during Fiscal
2013. The fees are classified as Debt issuance costs within the accompanying Consolidated Statements of Financial
Position and are being amortized as an adjustment to interest expense over the remaining life of the ABL Facility.
As a result of borrowings and payments under the ABL Facility, at September 30, 2013, the Company had
aggregate borrowing availability of approximately $288,901, net of lender reserves of $8,559 and outstanding
letters of credit of $37,191.
(7) DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments are used by the Company principally in the management of its interest rate, foreign
currency exchange rate and raw material price exposures. The Company does not hold or issue derivative financial
instruments for trading purposes. Derivative instruments are reported at fair value in the Consolidated Statements of
Financial Position. When hedge accounting is elected at inception, the Company formally designates the financial
instrument as a hedge of a specific underlying exposure and documents both the risk management objectives and
strategies for undertaking the hedge. The Company formally assesses both at the inception and at least quarterly
thereafter, whether the financial instruments that are used in hedging transactions are effective at offsetting changes
in the forecasted cash flows of the related underlying exposure. Because of the high degree of effectiveness between
the hedging instrument and the underlying exposure being hedged, fluctuations in the value of the derivative
instruments are generally offset by changes in the forecasted cash flows of the underlying exposures being hedged.
Any ineffective portion of a financial instrument’s change in fair value is immediately recognized in earnings. For
derivatives that are not designated as cash flow hedges, or do not qualify for hedge accounting treatment, the change
in the fair value is also immediately recognized in earnings.
Fair Value of Derivative Instruments
The Company discloses its derivative instruments and hedging activities in accordance with ASC
Topic 815: “Derivatives and Hedging” (“ASC 815”).
The fair value of the Company’s outstanding derivative contracts recorded as assets in the accompanying
Consolidated Statements of Financial Position are as follows:
Asset Derivatives
September 30,
2013
September 30,
2012
Derivatives designated as hedging instruments under
ASC 815:
Commodity contracts ...................... Receivables—Other $ 416 $ 985
Commodity contracts ...................... Deferred charges and other 3 1,017
Foreign exchange contracts ................. Receivables—Other 1,719 1,194
Total asset derivatives designated as hedging
instruments under ASC 815 ................... 2,138 3,196
Derivatives not designated as hedging instruments
under ASC 815:
Foreign exchange contracts ................. Receivables—Other 143 41
Total asset derivatives ......................... $2,281 $3,237
100