Rayovac 2015 Annual Report Download - page 130

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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
the risk that the counterparties to these contracts may default on the obligations. Likewise, by assessing the
requirements of a reserve for non-performance which is calculated based on the probability of default by the
Company, the Company adjusts its derivative contract liabilities to reflect the price at which a potential market
participant would be willing to assume the Company’s liabilities. The Company has not changed the valuation
techniques used in measuring the fair value of any financial assets and liabilities during the year. The fair values
of derivative instruments as of September 30, 2015 and 2014 are as follows (See Note 11, “Derivatives” for
additional detail):
2015 2014
Carrying
Amount Fair Value
Carrying
Amount Fair Value
(in millions)
Derivative Assets ............................. $6.0 $6.0 $14.7 $14.7
Derivative Liabilities .......................... $9.8 $9.8 $ 2.1 $ 2.1
The carrying values of cash and cash equivalents, receivables, accounts payable and short term debt
approximate fair value based on the short-term nature of these assets and liabilities. The carrying values of
goodwill, intangible assets and other long-lived assets are tested annually or more frequently if an event occurs
that indicates an impairment loss may have been incurred, using fair value measurements with unobservable
inputs (Level 3).
The carrying values and estimated fair values for debt as of September 30, 2015 and 2014 are as follows:
2015 2014
Carrying
Amount Fair Value
Carrying
Amount Fair Value
(in millions)
Total debt—Spectrum Brands Holdings, Inc. ...... $3,971.0 $4,085.8 $2,990.8 $3,061.5
Total debt—SB/RH Holdings, LLC ............. $4,005.7 $4,120.5 $3,006.7 $3,077.4
The fair value measurements of the Company’s debt represent non-active market exchange-traded securities
which are valued at quoted input prices that are directly observable or indirectly observable through
corroboration with observable market data (Level 2).
NOTE 6—INVENTORY
Inventories as of September 30, 2015 and 2014 consist of the following:
2015 2014
(in millions)
Raw materials ...................................... $132.4 $104.1
Work-in-process .................................... 37.9 35.3
Finished goods ...................................... 610.5 485.1
$780.8 $624.5
116