Rayovac 2010 Annual Report Download - page 135

SPECTRUM BRANDS HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
The Company’s derivatives are valued on a recurring basis 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 Company’s net derivative portfolio as of September 30, 2010, contains Level 2 instruments and
represents commodity, interest rate and foreign exchange contracts.
Level 1 Level 2 Level 3 Total
Assets:
Commodity contracts ......................... $— $ 3,914 $— $ 3,914
Total Assets ..................................... $— $ 3,914 $— $ 3,914
Liabilities:
Interest rate contracts ......................... $— $ (6,627) $— $ (6,627)
Foreign exchange contracts, net ................. — (38,111) $— (38,111)
Total Liabilities .................................. $— $(44,738) $— $(44,738)
The 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.
Goodwill, intangible assets and other long-lived assets are also tested annually or if a triggering event
occurs that indicates an impairment loss may have been incurred using fair value measurements with
unobservable inputs (Level 3). The Company did not record any impairment charges related to goodwill,
intangible assets or other long-lived assets during Fiscal 2010. (See also Note 3(i), Significant Accounting
Policies—Intangible Assets, for further details on impairment testing.)
The carrying amounts and fair values of the Company’s financial instruments are summarized as follows
((liability)/asset):
September 30, 2010 September 30, 2009
Carrying
Amount Fair Value
Carrying
Amount Fair Value
Total debt .................................... $(1,743,767) $(1,868,754) $(1,583,535) $(1,592,987)
Interest rate swap agreements .................... (6,627) (6,627) — —
Commodity swap and option agreements ........... 3,914 3,914 3,415 3,415
Foreign exchange forward agreements ............. (38,111) (38,111) (797) (797)
(t) Environmental Expenditures
Environmental expenditures that relate to current ongoing operations or to conditions caused by past operations
are expensed or capitalized as appropriate. The Company determines its liability on a site-by-site basis and
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