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Jarden Corporation Annual Report 2013 25
The following table presents the fair value of derivative nancial instruments as of December31, 2013:
(In millions)
Derivatives designated as effective hedges:
Cash ow hedges:
Interest rate swaps $(3.5)
Foreign currency contracts 2.2
Subtotal (1.3)
Derivatives not designated as effective hedges:
Foreign currency contracts 1.1
Commodity contracts —
Subtotal 1.1
Total $ (0.2)
Net Investment Hedge
The Company has designated approximately ¤148million of the principal balance of its Euro-denominated 7 1 ⁄ 2 % senior
subordinated notes due 2020, with an aggregate principal balance of ¤150million, as a net investment hedge (the “Hedging
Instrument”) of the foreign currency exposure of its net investment in certain Euro-denominated subsidiaries. Foreign currency gains
and losses on the Hedging Instrument are included as a component of AOCI.
Signicant Accounting Policies and Critical Estimates
The Company’s nancial statements are prepared in accordance with generally accepted accounting principles in the United States of
America (“GAAP”), which require us to make certain judgments, estimates and assumptions that affect the amounts reported in the
nancial statements and accompanying notes. The following list of critical accounting policies is not intended to be a comprehensive
list of all its accounting policies. The Company’s signicant accounting policies are more fully described in Note 1—“Business and
Signicant Accounting Policies”. The following represents a summary of the Company’s critical accounting policies, dened as those
policies that the Company believes are the most important to the portrayal of its nancial condition and results of operations, and/or
require management’s signicant judgments and/or estimates. In many cases, the accounting treatment for a particular transaction is
specically directed by GAAP with no need for management’s judgment in their application.
Revenue Recognition and Allowance for Product Returns
The Company recognizes revenues at the time of product shipment or delivery, depending upon when title and risk of loss passes, to
unafliated customers, and when all of the following have occurred: a rm sales agreement is in place, pricing is xed or determinable,
and collection is reasonably assured. Revenue is recognized as the net amount estimated to be received after deducting estimated
amounts for product returns, discounts and allowances. The Company estimates future product returns, discounts and allowances
based upon historical return rates and its reasonable judgment.
Revenues from the sale of gift cards are deferred and the revenue is recognized when the gift card is redeemed by the customer or the
likelihood of the gift card being redeemed by the customer is remote (“gift card breakage”). Gift card breakage income is recognized in
proportion to the actual redemption of gift cards based on the Company’s historical redemption patterns.
Income Taxes
The Company records a valuation allowance to reduce its deferred tax assets to the amount that the Company believes is more likely
than not to be realized. While the Company has considered future taxable income and ongoing prudent and feasible tax planning
strategies in assessing the need for the valuation allowance, in the event the Company were to determine that it would not be able
to realize all or part of its net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to income
in the period such determination was made. Likewise, should the Company determine that it would be able to realize its deferred tax
assets in the future in excess of its net recorded amount, an adjustment to the deferred tax assets would increase income in the period
such determination was made.
Additionally, the Company recognizes tax benets for certain tax positions based upon judgments as to whether it is more likely
than not that a tax position will be sustained upon examination. The measurement of tax positions that meet the more-likely-than-
not recognition threshold are based in part on estimates and assumptions as to the probability of an outcome, along with estimated
Management’s Discussion and Analysis
Jarden Corporation Annual Report 2013
December31, 2013
Asset (Liability)