Sunbeam 2008 Annual Report Download - page 43

2. Adoption of New Accounting Pronouncements
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an
Amendment of FASB Statement No. 155” (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial instruments and
certain other items at fair value that are not currently required to be measured at fair value. SFAS 159 also established presentation and
disclosure requirements designed to facilitate comparisons that choose different measurement attributes for similar types of assets and
liabilities. The Company adopted SFAS 159 effective January 1, 2008 and did not elect the fair value option established by SFAS 159. As
such, the adoption had no impact on the consolidated financial position, results of operations or cash flows of the Company.
In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement
Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R)” (“SFAS 158”). Among other items, SFAS 158 requires recognition of
the overfunded or underfunded status of an entity’s defined benefit postretirement plan as an asset or liability in the financial statements,
requires the measurement of defined benefit postretirement plan assets and obligations as of the end of the employer’s fiscal year and
requires recognition of the funded status of defined benefit postretirement plans in other comprehensive income. The measurement date
provisions of SFAS 158 require the measurement of defined benefit plan assets and obligations as of the date of the Company’s fiscal year-
end statement of financial position. The Company adopted the measurement date provisions of SFAS 158 for the year ending December 31,
2008 using the second transition approach as defined by SFAS 158. This transition approach allowed the Company to estimate the effects of
the change by using the measurements determined at September 30, 2007 and that were used for the year ended December 31, 2007. The
adoption of the measurement dateprovisions of SFAS 158 did not have a material affect on the consolidated financial position, results of
operations or cash flows of the Company.
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value measurements. Effective January 1, 2008, the Company adopt-
ed the provisions of SFAS 157 related to financial assets and liabilities, as well as other assets and liabilities carried at fair value on a recurring
basis.These provisions, which have been applied prospectively, did not have a material impact on the Company’s consolidated financial
statements (see Note 1 for disclosures related tothe adoption of SFAS 157). Certain other provisions of SFAS 157 related to other nonfinan-
cial assets and liabilities will be effective for the Company on January 1, 2009, and will be applied prospectively. The Company is currently
evaluating the impact the provisions of SFAS 157 related to other nonfinancial assets and liabilities will have on the consolidated financial
position, results of operations or cash flows of the Company.
InJune 2006, the FASB issued FASB interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an interpretation of FASB
No. 109” (“FIN 48”). FIN 48 prescribes a comprehensivemodel for recognizing, measuring, presenting and disclosing in the financial state-
ments tax positions taken or expected to be taken on a tax return, including a decision whether to file or not to file in a particular jurisdic-
tion. FIN 48 is effective for fiscal years beginning after December 15, 2006. The effect of the adoption of the FIN 48 is disclosed in Note 12.
3. Acquisitions
2007 Activity
The Company did not complete any acquisitions during 2008. On April 6, 2007, the Company acquired Pure Fishing, a leading global
provider of fishing equipment marketed under well-known fishing brands including Abu-Garcia® ,Berkley® ,Fenwick® ,Gulp!® ,Mitchell® ,
Stren®and Trilene® .The consideration consisted of $300 in cash, a $100 five year subordinated note (the “Note”) with a 2% coupon and a
warrant exercisable into approximately 2.2 million shares of Jarden common stock with an initial exercise price of $45.32 per share (subject
to adjustment as provided therein). The purchase price includes the fair value of the Note at the date of acquisition of approximately $94. In
addition to the upfront purchase price, a contingent purchase price payment of up to $50 based on the future financial performance of the
acquired business may be paid and during 2008, $25 of this amount was paid. The Pure Fishing acquisition is consistent with the Company’s
strategy of purchasing leading, niche consumer-oriented brands with attractive cash flows and strong management.
On August 8, 2007, the Company acquired all the outstanding shares of K2, a leading provider of branded consumer products in the
global sports equipment market in exchange for consideration $10.85 in cash per share of K2 common stock and 0.1118 of a share of Jarden
common stock for each shareof K2 common stock issued and outstanding. The total value of the transaction, including debt assumed, was
approximately $1.2 billion. The aggregate consideration to the K2 shareholders was approximately $701 and was comprised of a cash pay-
ment of approximately $517 and the issuance of approximately 5.3 million common shares of the Company with a fair value of approxi-
mately $184. The cash and Jarden common stock issued in the transaction had a combined value of $14.72 per K2 share, which was calculat-
ed using the average of the closing stock price of a share of Jarden common stock on the New York Stock Exchange (“NYSE”) during the five-
day trading period ending two trading days after the date that the number of shares of Jarden common stock to be received by K2 stock-
holders was finalized, which was August 6, 2007. The total purchase price of $779, which is net of cash acquired, also includes: the purchase
of K2 share-based awards for $22.7, the Company’s investment in K2 prior to the acquisition of $31.1, debt make-whole premiums of $15.4
and other fees and consideration totaling $22.1. In connection with the Acquisition the Company repaid certain of K2’s debt, including
accrued interest and the aforementioned make-whole premiums for approximately $341. The Acquisition was recorded by allocating the
cost of the assets acquired, including intangible assets and liabilities assumed based on their estimated fair values at the date of Acquisition.
Notes to Consolidated Financial Statements
Jarden Corporation Annual Report 2008 (Dollars in millions, except per share data and unless otherwise indicated)
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