Rayovac 2014 Annual Report Download - page 113

Download and view the complete annual report

Please find page 113 of the 2014 Rayovac annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 148

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148

SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(Amounts in thousands, except per share figures)
The following table summarizes the impact of derivative instruments on the accompanying Consolidated
Statement of Operations for Fiscal 2012, pretax:
Derivatives in ASC 815 Cash Flow
Hedging Relationships
Amount of
Gain (Loss)
Recognized in
AOCI on
Derivatives
(Effective Portion)
Location of
Gain (Loss)
Reclassified from
AOCI into
Income
(Effective Portion)
Amount of
Gain (Loss)
Reclassified from
AOCI into Income
(Effective Portion)
Location of
Gain (Loss)
Recognized in
Income on
Derivatives
(Ineffective
Portion and
Amount
Excluded from
Effectiveness
Testing)
Amount of
Gain (Loss)
Recognized in
Income on
Derivatives
(Ineffective Portion
and Amount
Excluded from
Effectiveness Testing)
Commodity contracts ................ $1,606 Cost of goods sold $(1,148) Cost of goods sold $ 94
Interest rate contracts ................ 15 Interest expense (864) Interest expense —
Foreign exchange contracts ........... 61 Netsales (474) Net sales —
Foreign exchange contracts ........... (3,506) Cost of goods sold (611) Cost of goods sold —
Total ......................... $(1,824) $(3,097) $ 94
Other Changes in Fair Value of Derivative Contracts
For derivative instruments that are used to economically hedge the fair value of the Company’s third party
and intercompany foreign currency payments, commodity purchases and interest rate payments, the gain (loss)
associated with the derivative contract is recognized in earnings in the period of change. During Fiscal 2014,
Fiscal 2013 and Fiscal 2012, the Company recognized the following gains (losses) on these derivative contracts:
Derivatives Not Designated as
Hedging Instruments Under ASC 815
Amount of Gain (Loss)
Recognized in
Income on Derivatives Location of Gain (Loss)
Recognized in
Income on Derivatives2014 2013 2012
Commodity contracts ................................ $ (99) $ (55) $ — Cost of goods sold
Foreign exchange contracts ........................... 3,115 (3,597) 5,916 Other expense, net
Total ......................................... $3,016 $(3,652) $5,916
Credit Risk
The Company is exposed to the risk of default by the counterparties with which it transacts and generally
does not require collateral or other security to support financial instruments subject to credit risk. The Company
monitors counterparty credit risk on an individual basis by periodically assessing each such counterparty’s credit
rating exposure. The maximum loss due to credit risk equals the fair value of the gross asset derivatives that are
concentrated with certain domestic and foreign financial institution counterparties. The Company considers these
exposures when measuring its credit reserve on its derivative assets, which was $48 and $5 at September 30,
2014 and September 30, 2013, respectively.
The Company’s standard contracts do not contain credit risk related contingent features whereby the
Company would be required to post additional cash collateral as a result of a credit event. However, the
Company is typically required to post collateral in the normal course of business to offset its liability positions.
At September 30, 2014 and September 30, 2013, the Company had posted cash collateral of $0 and $450,
respectively, related to such liability positions. In addition, at September 30, 2014 and September 30, 2013, the
Company had no posted standby letters of credit related to such liability positions. The cash collateral is included
in Current Assets—Receivables-Other within the accompanying Consolidated Statements of Financial Position.
101