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Jarden Corporation Annual Report 2012 17
Management’s Discussion and Analysis
Jarden Corporation Annual Report 2012
In addition, the Company completed three tuck-in acquisitions during 2010, including the acquisition of Aero Products International,
Inc. (“Aero”) on October 1, 2010 and the acquisition of Quickie Manufacturing Corporation (“Quickie”) on December 17, 2010.
Aero is a leading provider of premium, air-filled mattresses under brand names including Aero®, Aerobed® and Aero Sport®. Aero
is reported in the Company’s Outdoor Solutions segment and is included in the Company’s results of operations from October 1,
2010. Quickie is a leading supplier and distributor of innovative cleaning tools and supplies. Quickie designs, manufactures and
distributes cleaning products including mops, brooms, dusters, dust pans, brushes, buckets and other supplies for traditional
in-home use, as well as commercial and contractor-grade applications, sold primarily under the leading brands Quickie Original®,
Quickie Home-Pro®, Quickie Professional®, Quickie Microban® and Quickie Green Cleaning®. Quickie is reported in the
Company’s Branded Consumables segment and is included in the Company’s results of operations from December 17, 2010.
The combined cash purchase price, net of cash acquired, for the Aero and Quickie acquisitions was approximately $270 million.
Additionally, during 2010, the Company completed another tuck-in acquisition. All three tuck-in acquisitions were complementary to
the Company’s core businesses and from an accounting standpoint were not significant.
As discussed hereinafter, the differences in the results from operations for 2011 versus 2010 have been affected in varying degrees
by the inclusion of Mapa Spontex, Aero and Quickie from their respective acquisition dates of April 1, 2010, October 1, 2010 and
December 17, 2010, respectively. Furthermore, during 2011, the integration of Aero into the operating results of the Company’s
existing Coleman business was completed.
Venezuela Operations
On February 8, 2013, the Venezuelan government announced its intention to further devalue the Bolivar relative to the U.S. dollar.
As a result of the devaluation, the official exchange rate changed to 6.30 Bolivars per U.S. dollar for imported goods. As a result
of the change in the official exchange rate, the Company expects to record a pre-tax charge of approximately $27 million, in the
first quarter of 2013, primarily reflecting the write-down of monetary assets. The 2013 financial statements of our subsidiaries in
Venezuela will be remeasured at and will be reflected in the Company’s consolidated financial statements at the official exchange
rate of 6.30. The higher official exchange rate will negatively impact the ongoing revenue and operating profit for our Venezuela
operations. Translating the results of operations for the Venezuela subsidiaries in 2012 using the 6.30 official exchange rate versus
the actual official exchange rate in effect during 2012 of 4.30, would have reduced the Company’s 2012 consolidated net sales by
less than 1%.
In January 2010, the Venezuelan government announced its intention to devalue its currency (Bolivar) relative to the U.S. dollar,
which resulted in an official exchange rate for non-essential goods of 4.30 Bolivars per U.S. dollar. As such, beginning in 2010, the
financial statements of the Company’s subsidiaries operating in Venezuela are remeasured at and are reflected in the Company’s
consolidated financial statements at the official exchange rate of 4.30, which is the Company’s expected settlement rate.
As a result of the change in the official exchange rate, the results of operations for 2010 include a non-cash charge of $14.0
million, primarily reflecting the write-down of monetary assets as of January 1, 2010. This charge is classified in selling, general and
administrative costs (“SG&A”).
In March 2010, the Securities and Exchange Commission (the “SEC”) provided guidance on certain exchange rate issues specific to
Venezuela. This SEC guidance, in part, requires that any differences between the amounts reported for financial reporting purposes
and actual U.S. dollar-denominated balances that may have existed prior to the application of the highly inflationary accounting
requirements (effective January 1, 2010 for the Company) should be recognized in the statement of operations. As a result of
applying this SEC guidance, the results of operations for 2010 include a non-cash charge of $56.6 million related to remeasuring U.S.
dollar-denominated assets at the parallel exchange rate and subsequently translating at the official exchange rate. This charge is
classified in SG&A.
At December 31, 2012, the Company’s subsidiaries operating in Venezuela have approximately $15 million in cash denominated in
U.S. dollars and cash of approximately $47 million denominated in Bolivars converted at the official exchange rate of 4.30 Bolivars
per U.S. dollar.