Rayovac 2015 Annual Report Download - page 129

SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
The following provides a rollforward of the restructuring accrual related to the global cost reduction
initiative for 2015 and 2014.
Termination
Benefits
Other
Costs Total
(in millions)
Accrual balance at September 30, 2013 ................. $4.9 $0.4 $5.3
Provisions ........................................ 0.2 — 0.2
Cash expenditures .................................. (3.5) (0.7) (4.2)
Non-cash items .................................... (0.3) 0.5 0.2
Accrual balance at September 30, 2014 ................. 1.3 0.2 1.5
Provisions ........................................ 0.1 — 0.1
Cash expenditures .................................. (1.0) (0.2) (1.2)
Non-cash items .................................... (0.2) 0.1 (0.1)
Accrual balance at September 30, 2015 ................. $0.2 $0.1 $0.3
During the year ended September 30, 2015, the Company recognized $1.1 million of other costs related to
this initiative as they were paid. During the year ended September 30, 2014, the Company recognized
$1.1 million of other costs related to this initiative as they were paid.
NOTE 5—FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair values of the Company’s financial assets and liabilities are defined as the exchange price that would be
received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for
the asset or liability in an orderly transaction between market participants. Fair value measurements are classified
using a fair value hierarchy that is based upon the observability of inputs used in measuring fair value.
Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable
inputs (lowest level) reflect internally developed assumptions about hypothetical transactions in the absent of
market data. Fair value measurements are classified under the following hierarchy:
• Level 1—Unadjusted quoted prices for identical instruments in active markets.
• Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar
instruments in markets that are not active; and model-derived valuations whose inputs are observable
or whose significant value drivers are observable.
• Level 3—Significant inputs to the valuation model are unobservable.
The Company utilizes valuation techniques that attempt to maximize the use of observable inputs and
minimize the use of unobservable inputs. 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, which are generally based on quoted or observed market prices
(Level 2). The fair value of certain derivative financial instruments is estimated using pricing models based on
contracts with similar terms and risks. Modeling techniques assume market correlation and volatility, such as
using prices of one delivery point to calculate the price of the contract’s different delivery point. The nominal
value of interest rate transactions is discounted using applicable forward interest rate curves. In addition, by
applying a credit reserve which is calculated based on credit default swaps or published default probabilities for
the actual and potential asset value, the fair value of the Company’s derivative financial instrument assets reflects
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