Rayovac 2010 Annual Report Download - page 127

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SPECTRUM BRANDS HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
Net (loss) income per common share is calculated based upon the following shares:
Successor
Company
Predecessor
Company
September 30,
2010
September 30,
2009
August 30,
2009
September 30,
2008
Basic .......................................... 36,000 30,000 51,306 50,921
Effect of restricted stock and assumed
conversion of stock options ...................... — — — —
Diluted ........................................ 36,000 30,000 51,306 50,921
The Successor Company for Fiscal 2010 and the period from August 31, 2009 through September 30, 2009,
and the Predecessor Company for the period from October 1, 2008 through August 30, 2009 and Fiscal 2008 has
not assumed the exercise of common stock equivalents as the impact would be antidilutive.
On June 16, 2010, the Company issued 20,433 shares of its common stock in conjunction with the Merger.
Additionally, all shares of its wholly owned subsidiary Spectrum Brands, were converted to shares of SB
Holdings on June 16, 2010. (See also, Note 15, Acquisition, for a more complete discussion of the Merger.)
(r) Derivative Financial Instruments
Derivative financial instruments are used by the Company principally in the management of its interest rate,
foreign currency and raw material price exposures. The Company does not hold or issue derivative financial
instruments for trading purposes. When hedge accounting is elected at inception, the Company formally
designates the financial instrument as a hedge of a specific underlying exposure if such criteria are met, and
documents both the risk management objectives and strategies for undertaking the hedge. The Company formally
assesses, both at the inception and at least quarterly thereafter, whether the financial instruments that are used in
hedging transactions are effective at offsetting changes in the forecasted cash flows of the related underlying
exposure. Because of the high degree of effectiveness between the hedging instrument and the underlying
exposure being hedged, fluctuations in the value of the derivative instruments are generally offset by changes in
the forecasted cash flows of the underlying exposures being hedged. Any ineffective portion of a financial
instrument’s change in fair value is immediately recognized in earnings. For derivatives that are not designated
as cash flow hedges, or do not qualify for hedge accounting treatment, the change in the fair value is also
immediately recognized in earnings.
Effective December 29, 2008, the Company adopted ASC Topic 815: “Derivatives and Hedging,” (“ASC
815”). ASC 815 amends the disclosure requirements for derivative instruments and hedging activities. Under the
revised guidance entities are required to provide enhanced disclosures for derivative and hedging activities.
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