Sunbeam 2009 Annual Report Download - page 49

The following table summarizes the assets that are measured at fair value on a non-recurring basis at December 31, 2009:
December 31,
(In millions) 2009 Level 3
Goodwill $ 23.7 $ 23.7
Intangible assets 30.9 30.9
At December 31, 2009, goodwill of certain reporting units and certain intangible assets are recorded at fair value based upon the
Company’s impairment testing (see Note 6).
The Company’s goodwill and indefinite-lived intangibles are fair valued using methods such as the discounted cash flows and
market multiple methods. Goodwill impairment testing requires significant use of judgment and assumptions including the identification of
reporting units; the assignment of assets and liabilities to reporting units; the estimation of future cash flows, business growth rates, terminal
values and discount rates. The testing of indefinite-lived intangibles under established guidelines for impairment also requires significant use
of judgment and assumptions (such as cash flow projections, terminal values and discount rates).
Stock-Based Compensation
The Company estimates the fair value of share-based awards on the date of grant, which is generally the date the award is approved
by the Board of Directors of the Company (the “Board”) or committee thereof. The fair value of stock options is determined using the Black-
Scholes option-pricing model. The fair value of the market-based restricted stock awards is determined using a Monte Carlo simulation
embedded in a lattice model, and for all other restricted stock awards based on the closing price of the Company’s common stock on the
date of grant. The determination of the fair value of the Company’s stock option awards and restricted stock awards is based on a variety of
factors including, but not limited to, the Company’s common stock price, expected stock price volatility over the expected life of awards,
and actual and projected exercise behavior (see Note 13).
Additionally the Company has estimated forfeitures for share-based awards at the dates of grant based on historical experience. The
forfeiture estimate is revised as necessary if actual forfeitures differ from these estimates.
The Company issues restricted share awards whose restrictions lapse upon either the passage of time (service vesting), achieving
performance targets, attaining Company common stock price thresholds, or some combination of these restrictions. For those restricted
share awards with only service conditions, the Company recognizes compensation cost on a straight-line basis over the explicit service
period. For those restricted share awards with market conditions, the Company recognizes compensation cost on a straight-line basis over
the derived service period unless the market condition is satisfied prior to the end of the derived service period. For performance only
awards, the Company recognizes compensation cost on a straight-line basis over the implicit service period which represents the
Company’s best estimates for when the target will be achieved. If it becomes apparent the original service periods are no longer accurate,
the remaining unrecognized compensation cost will be recognized over the revised remaining service periods. For restricted share awards
that contain both service and market or performance vesting conditions, compensation cost is recognized over the shorter of the two
conditions if only one of the conditions must be met or the longer of the two conditions if both conditions must be met.
For restricted awards that contain performance or market vesting conditions, the Company excludes these awards from diluted
earning per share computations until the contingency is met as of the end of that reporting period.
Pension and Postretirement Plans
The Company records annual amounts relating to its pension and postretirement plans based on calculations which include various
actuarial assumptions, including discount rates, assumed rates of return, compensation increases, turnover rates and healthcare cost trend
rates. The Company reviews its actuarial assumptions on an annual basis and makes modifications to the assumptions based on current
rates and trends when it is deemed appropriate to do so. The effect of modifications is generally recorded or amortized over future service
periods. The assumptions utilized in recording its obligations under its plans are based on its experience, market conditions and input from
its actuaries and investment advisors.
Reorganization and Acquisition-Related Integration Costs
Reorganization and acquisition-related integration costs include costs associated with exit or disposal activities, including costs for
employee and lease terminations, facility closings or other exit activities. Additionally, these costs include expenses directly related to
integrating and reorganizing acquired businesses and include items such as employee retention costs, recruiting costs, certain moving costs
and certain duplicative costs during integration and asset impairments.
Notes to Consolidated Financial Statements
Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated)
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