Rayovac 2003 Annual Report Download - page 32

As of September 30, 2003, the potential change in fair value of outstanding foreign exchange derivative instruments, assuming a
10% unfavorable shift in the underlying foreign exchange rates would be a loss of $1.4 million. The net impact on future cash flows,
after also including the gain in value on the related accounts receivable and accounts payable outstanding at September 30, 2003
due to the same change in exchange rates, would be zero.
As of September 30, 2003, the potential change in fair value of outstanding commodity price derivative instruments, assuming a
10% unfavorable change in the underlying commodity prices would be a loss of $1.0 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 net gain of $0.6 million.
A discussion of our accounting policies for derivative financial instruments is included in Note 2(r) to the Consolidated Financial
Statements.
Forward-Looking Statements We have made or implied certain forward-looking statements in this Annual Report. All state-
ments other than statements of historical facts included in this Annual Report, including the statements under “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” regarding our business strategy, future operations,
financial position, estimated revenues, projected costs, projected synergies, prospects, plans and objectives of management, as
well as information concerning expected actions of third parties, are forward-looking statements. When used in this Annual Report,
the words “anticipate,” “intend,” “plan,” “estimate,” “believe,” “expect,” “project,” “could,” “will,” “should,” “may” and similar
expressions are also intended to identify forward-looking statements, although not all forward-looking statements contain such
identifying words.
Since these forward-looking statements are based upon current expectations of future events and projections and are subject to a
number of risks and uncertainties, many of which are beyond our control, actual results or outcomes may differ materially from
those expressed or implied herein, and you should not place undue reliance on these statements. Important factors that could cause
our actual results to differ materially from those expressed or implied herein include, without limitation:
•competitive promotional activity or spending by competitors or price reductions by competitors;
•the loss of, or a significant reduction in, sales to a significant retail customer;
•difficulties or delays in the integration of operations of acquired businesses;
•the introduction of new product features or technological developments by competitors and/or the development of new
competitors or competitive brands;
•the effects of general economic conditions, including inflation, labor costs and stock market volatility or changes in trade,
monetary or fiscal policies in the countries where we do business;
•our ability to develop and successfully introduce new products and protect our intellectual property;
•our ability to successfully implement, achieve and sustain manufacturing and distribution cost efficiencies and improvements,
and fully realize anticipated cost savings;
•the impact of unusual items resulting from the implementation of new business strategies, acquisitions and divestitures or
current and proposed restructuring activities;
•the cost and effect of unanticipated legal, tax or regulatory proceedings or new laws or regulations (including environmental
regulations);
•changes in accounting policies applicable to our business;
•interest rate, exchange rate and raw materials price fluctuations;
•the effects of political or economic conditions or unrest in international markets; and
•other risk factors included in our Annual Report on Form 10-K.
You should assume the information appearing in this Annual Report is accurate only as of September 30, 2003 or as otherwise
specified, as our business, financial condition, results of operations and prospects may have changed since that date. Except as
required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and
Exchange Commission, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a
result of new information, future events or otherwise to reflect actual results or changes in factors or assumptions affecting such
forward-looking statement.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Rayovac Corporation and Subsidiaries
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