Rayovac 2015 Annual Report Download - page 85

Commodity Price Risk
We are exposed to fluctuations in market prices for purchases of zinc and brass used in our manufacturing
processes. We use commodity swaps and calls to manage such risk. The maturity of, and the quantities covered
by, the contracts are closely correlated to our anticipated purchases of the commodity. The cost of calls is
amortized over the life of the contracts and recorded in cost of goods sold, along with the effects of the swap and
call contracts. The related amounts payable to, or receivable from, the counter-parties are included in accounts
payable or accounts receivable.
At September 30, 2015, the potential change in fair value of outstanding commodity price derivative
instruments, assuming a 10% decline in the underlying commodity prices, would be a loss of $2.5 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 gain of $0.6 million.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required for this Item is included in this Annual Report on Form 10-K within Item 15,
Exhibits, Financial Statements and Schedules, inclusive and is incorporated herein by reference. This report is a
combined report of Spectrum Brands Holdings, Inc. and SB/RH Holdings, LLC. The notes to the consolidated
financial statements include consolidated Spectrum Brands Holdings Inc. Notes and certain information related
to SB/RH Holdings, LLC.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Spectrum Brands Holdings, Inc.
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.
Management’s Annual Report on Internal Control over Financial Reporting. The Company’s management
is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act). The Company’s management assessed the effectiveness
of its internal control over financial reporting as of September 30, 2015. In making this assessment, the
Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”) in the Internal Control- Integrated Framework (2013). The Company’s
management has concluded that, as of September 30, 2015, its internal control over financial reporting is
effective based on these criteria. Under guidelines established by the SEC, companies are allowed to exclude
acquisitions from their first assessment of internal control over financial reporting following the date of the
acquisition. The Company’s management excluded the auto care business acquired in the acquisition of Armored
AutoGroup Parent, Inc. (“AAG”), which was completed on May 21, 2015, from its assessment of the
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