Sunbeam 2004 Annual Report Download - page 76

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Jarden Corporation
Notes to Consolidated Financial Statements (cont’d)
December 31, 2004
On January 24, 2005, the Company entered into two interest rate swaps, effective on January 26,
2005, that converted an aggregate of $125 million of floating rate interest payments (excluding our 2%
applicable margin) under its term loan facility for a fixed obligation. Both interest rate swaps carry a
fixed interest rate of 4.025% per annum for a term of five years. The swaps have interest payment dates
that are the same as the term loan facility. The swaps are considered to be cash flow hedges and are also
considered to be effective hedges against changes in future interest payments of the Company’s floating-
rate debt obligation for both tax and accounting purposes. Gains and losses related to the effective
portion of the interest rate swap will be reported as a component of other comprehensive income and
will be reclassified into earnings in the same period that the hedged transaction affects earnings.
74