Sunbeam 2007 Annual Report Download - page 64

Warranty
The Company recognizes warranty costs based on an estimate of amounts required to meet future warranty
obligations arising as part of the sale of its products. In accordance with SFAS No. 5 “Accounting for
Contingencies,” the Company accrues an estimated liability at the time of a product sale based on historical claim
rates applied to current period sales, as well as any information applicable to current product sales that may
indicate a deviation from such historical claim rate trends.
Contingencies
The Company is involved in various legal disputes and other legal proceedings that arise from time to time
in the ordinary course of business. In addition, the Company or various of its subsidiaries have been identified by
the United States Environmental Protection Agency or a state environmental agency as a Potentially Responsible
Party pursuant to the federal Superfund Act and/or state Superfund laws comparable to the federal law at various
sites. Based on currently available information, the Company does not believe that the disposition of any of the
legal or environmental disputes the Company or its subsidiaries are currently involved in will have a material
adverse effect upon the financial condition, results of operations, cash flows or competitive position of the
Company. It is possible, that as additional information becomes available, the impact on the Company of an
adverse determination could have a different effect.
New and Pending Accounting Pronouncements
During 2007, 2006 and 2005, the Company adopted various accounting standards. A description of these
standards and their effect on the consolidated financial statements are described in Note 1 to the consolidated
financial statements.
Pending standards and their estimated effect on the Company’s consolidated financial statements are
described in Note 2 to the consolidated financial statements.
Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements
made by or on behalf of the Company. The Company may from time to time make written or oral statements that
are “forward-looking,” including statements contained in this report and other filings with the Securities and
Exchange Commission and in reports to its shareholders. Such forward-looking statements include the
Company’s repurchase of shares of common stock from time to time under the Company’s repurchase program,
the outlook for Jarden’s markets and the demand for its products, earnings per share, estimated sales, segment
earnings, cash flows from operations, future revenues and margin requirement and expansion, organic growth,
the amount of reorganization charges, the success of new product introductions, growth or savings in costs and
expenses and the impact of acquisitions, divestitures, restructurings, securities offerings and other unusual items,
including Jarden’s ability to successfully integrate and obtain the anticipated results and synergies from its
acquisitions. These statements are made on the basis of management’s views and assumptions as of the time the
statements are made and the Company undertakes no obligation to update these statements. There can be no
assurance, however, that its expectations will necessarily come to pass. Significant factors affecting these
expectations are set forth under Item 1A—Risk Factors of this Annual Report on Form 10-K.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
In general, business enterprises can be exposed to market risks including fluctuations in certain commodity
prices, foreign currency exchange rates and interest rates that can affect the cost of operating, investing and
financing under those conditions. The Company believes its exposure to these risks is low.
The Company is exposed to interest rate risk on its variable rate debt and price risk on its fixed rate debt. As
such, the Company monitors the interest rate environment and uses interest rate swap agreements to manage its
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