Rayovac 2015 Annual Report Download - page 78

(2) Capital lease payments due by fiscal year include executory costs and imputed interest not reflected in the
Consolidated Statements of Financial Position included elsewhere in this Annual Report.
(3) Employee benefit obligations represent the sum of our estimated future minimum required funding for our
qualified defined benefit plans based on actuarially determined estimates and projected future benefit
payments from our unfunded postretirement plans. For additional information about our employee benefit
obligations, see Note 12, “Employee Benefit Plans,” of Notes to Consolidated Financial Statements,
included elsewhere in this Annual Report.
(4) At September 30, 2015, our Consolidated Statements of Financial Position includes reserves for uncertain
tax positions. However, it is not possible to predict or estimate the timing of payments for these
obligations. The Company cannot predict the ultimate outcome of income tax audits currently in progress
for certain of our companies; however, it is reasonably possible that during the next 12 months, some
portion of our unrecognized tax benefits could be recognized.
The following table summarizes our other commercial commitments as of September 30, 2015, consisting
entirely of standby letters of credit that back the performance of certain of our entities under various credit
facilities, insurance policies and lease arrangements:
Contractual Payments Due by Period
Total
Less than
1 year
1to
3 years
3to
5 years Thereafter
(in millions)
Letters of credit ........................................ $32.7 $24.7 $8.0 $— $—
Critical Accounting Policies and Estimates
Our Consolidated Financial Statements have been prepared in accordance with GAAP and fairly present our
financial position and results of operations. The preparation of the consolidated financial statements requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
The Company bases its accounting estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, and evaluates its estimates on an ongoing basis. The
following policies are considered by management to be the most critical to understanding the judgments that are
involved in the preparation of our consolidated financial statements and the uncertainties that could impact our
results of operations, financial position and cash flows. The application of these accounting policies requires
judgment and use of assumptions as to future events and outcomes that are uncertain and, as a result, actual
results could differ from these estimates. Refer to Note 2 “Summary of Significant Accounting Policies” of
Notes to the Consolidated Financial Statements for all relevant accounting policies.
Goodwill, Intangible Assets and Other Long-Lived Assets
The Company’s goodwill, intangible assets and tangible fixed assets are stated at historical cost, net of
depreciation and amortization, less any provision for impairment. Intangible and tangible assets with
determinable lives are amortized or depreciated on a straight line basis over estimated useful lives. Refer to Note
2 “Significant Accounting Policies and Practices” of Notes to Consolidated Financial Statements for more
information about useful lives.
On an annual basis, or more frequently if triggering events occur, the Company compares the estimated fair
value of its reporting units to the carrying value to determine if potential goodwill impairment exists; our
reporting units are consistent with our segments (See Note 18, “Segment Information” for further discussion over
operating and reporting segments). If the fair value of a reporting unit is less than its carrying value, an
impairment loss, if any, is recorded for the difference between the implied fair value of the reporting unit
goodwill and its carrying value. The estimated fair value represents the amount at which a reporting unit could be
bought or sold in a current transaction between willing parties on an arms-length basis. In estimating the fair
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