Rayovac 2009 Annual Report Download - page 171

Table of Contents
Index to Financial Statements SPECTRUM BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
The Company’s derivatives are valued using internal models, which are based on market observable inputs including interest rate curves and both
forward and spot prices for currencies and commodities. The Successor Company’s net derivative portfolio as of September 30, 2009, contains Level 2
instruments and represents, commodity and foreign exchange contracts.
Level 1 Level 2 Level 3 Total
Assets:
Commodity contracts $ — $3,415 $ — $3,415
Total Assets $ — $3,415 $ — $3,415
Liabilities:
Foreign exchange contracts, net $ — $ (797) $ — $ (797)
Total Liabilities $ — $ (797) $ — $ (797)
The carrying values of cash and cash equivalents, accounts and notes receivable, accounts payable and short−term debt approximate fair value. The
fair values of long−term debt and derivative financial instruments are generally based on quoted or observed market prices.
The carrying value of financial instruments approximate the fair value of those instruments due to the applicable interest rates being substantially at
market (“floating”), except for a $1,000,000 senior secured U.S. Dollar Term B Loan ($973,125 at September 30, 2009 (Successor Company) and $976,458
at September 30, 2008 (Predecessor Company)) due June 30, 2012 with interest payable periodically but not less than quarterly (with such interest rate at
September 30, 2009 (Successor Company) at LIBOR, subject to a floor of 1.50%, plus 6.5% and at September 30, 2008 (Predecessor Company) at LIBOR
plus 4.0%), a €262,000 senior secured Euro Term Loan ($371,874 at September 30, 2009 (Successor Company) and $369,283 at September 30, 2008
(Predecessor Company)) due June 30, 2012 with interest payable periodically but not less than quarterly (with such interest rate at September 30, 2009
(Successor Company) at EURIBOR, subject to a floor of 1.5%, plus 7.0% and at September 30, 2008 (Predecessor Company) at EURIBOR plus 4.5%). In
addition, at September 30, 2009 the Successor Company had outstanding $218,076 of 12% Notes due August 28, 2019 with interest payable semiannually
and at September 30, 2008 the Predecessor Company had outstanding $700,000, $347,012 and $2,873 of 7 3/8 Notes, Variable Rate Notes and 8 1/2 Notes,
respectively. The total fair value of the Term Loans at September 30, 2009 (Successor Company) and September 30, 2008 (Predecessor Company) was
approximately $1,284,030 and $997,654, respectively. The total fair value of the Successor Company’s 12% Notes at September 30, 2009 approximated
$207,718 and the Predecessor Company’s Senior Subordinated Notes at September 30, 2008 approximated $521,874. See Note 3(r), Significant Accounting
Policies—Derivative Financial Instruments and Note 8, Debt, for further details of the Company’s financial instruments.
The carrying amounts and fair values of the Company’s financial instruments are summarized as follows ((liability)/asset):
Successor Company Predecessor Company
September 30, 2009 September 30, 2008
Carrying
Amount Fair Value Carrying Amount Fair Value
Total debt $(1,583,535) $(1,592,987) $(2,523,419) $(1,647,320)
Interest rate swap agreements — — (5,813) (5,813)
Commodity swap and option agreements 3,415 3,415 (11,320) (11,320)
Foreign exchange forward agreements (797) (797) 5,251 5,251
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