Sunbeam 2008 Annual Report Download - page 28

credit facilities, 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.
Quantitative and Qualitative Disclosures About Market Risk
In general, business enterprises can be exposed to market risks including fluctuations in interest rates, foreign currency exchange
rates and certain commodity prices, and that can affect the cost of operating, investing and financing under those conditions. The Company
believes it has moderate exposure to these risks. The Company assesses market risk based on changes in interest rates, foreign currency rates
and commodity prices utilizing a sensitivity analysis that measures the potential loss in earnings, fair values and cash flows based on a hypo-
thetical 10% change in these rates and prices. At December 31, 2008, the interest rate on approximately 67% of the Company’s debt was
fixed by either the nature of the obligation or through interest rate swap contracts.
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 interest rate risk and price risk by balancing its
exposure to fixed and variable interest rates while attempting to minimize interest costs. As of December 31, 2008, approximately $0.9 billion
of Company’s debt is comprised of variable-rate debt. The remainder of the debt carries a fixed rate either by nature or through the use of
interest rate swaps. A hypothetical 10% change in these interest rates would change interest expense by approximately $4.1 million and the
fair values of fixed rate debt by approximately $38 million.
While the Company transacts business predominantly in U.S. dollars and most of its revenues are collected in U.S. dollars, a substan-
tial portion of the Company’s operating costs are denominated in other currencies, such as the British pound, Canadian dollar, Chinese
renminbi, European euro, Japanese yen, Mexican peso, and Venezuelan bolivar. Changes in the relation of these and other currencies to the
U.S. dollar will affect Company’s sales and profitability and could result in exchange losses. For 2008, approximately 40% of the Company’s
sales were denominated in foreign currencies, the most significant of which were: Euro dollars—approximately 12% and Canadian dollars—
approximately 6%. The primary purpose of the Company’s foreign currency hedging activities is to mitigate the foreign currency exchange
rate exposure on the cash flows related to forecasted inventory purchases sales. A hypothetical 10% change in foreign currency rates would
not have a material effect on foreign currency gains and losses related to the foreign currency derivatives or the fair value of the Company’s
foreign currency derivatives.
The Company is exposed to the price risk that the rising cost of commodities has on certain of its raw materials. As such, the
Companymonitors the commodities markets and from time to time the Company enters into commodity-based derivatives in order to
mitigate the impact that the rising price of these commodities has on the cost of certain of these Company’s raw materials. A hypothetical
10% change in the commodity prices underlying the derivatives would not have a material effect on the fair value commodity derivatives
and the related gains and losses included in the Company’s results of operations.
The Company is exposed to credit loss in the event of non-performance by the counterparties to its derivative financial instruments,
all of which arehighly rated institutions; however, the Company does not anticipate non-performance by such counterparties.
The Companydoes not enter into derivative financial instruments for trading purposes.
Market for Registrant’s Common Equity Security
Market for Registrant’s Common Equity
Jarden Corporation’s (the “Company” or “Jarden”) common stock is traded on the New York Stock Exchange under the symbol “JAH.”
As of February 13, 2009, there were approximately 3,600 registered holders of record of the Company’s common stock, par value $0.01 per
share.On February17, 2009, the last recorded sales price of the Company’s common stock was $10.95. Jarden currently does not and
does not intend topaycash dividends on its common stock in the foreseeable future, and each of Jarden’s senior credit facilities and the
indenture governing its senior subordinated notes contain certain restrictions that limit Jarden’s ability to pay dividends. (See “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”). Cash generated from operations will be used for general
corporate purposes, which may include acquisitions, supporting organic growth, paying down debt and share repurchases.
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Management’s Discussion and Analysis
Jarden Corporation Annual Report 2008