Sunbeam 2012 Annual Report Download - page 45

Jarden Corporation Annual Report 2012 43
Notes to Consolidated Financial Statements
Jarden Corporation Annual Report 2012 (Dollars in millions, except per share data and unless otherwise indicated)
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 that 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
earnings per share computations until the end of the reporting period that the contingency is met.
Pension and Postretirement Benefit Plans
The Company records annual amounts relating to its pension and postretirement benefit 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 pension and
postretirement benefit plans are based on its experience, market conditions and input from its actuaries and investment advisors.
Reorganization Costs
Reorganization 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 may also include expenses directly related to integrating and
reorganizing acquired businesses and include items such as employee retention costs, recruiting costs, asset impairments, certain
moving costs and certain duplicative costs during integration.
2. New Accounting Guidance and Adoption of New Accounting Guidance
New Accounting Guidance
In February 2013, the FASB issued ASU No. 2013-02, “Comprehensive Income” (“ASU 2013-02). ASU 2013-02 requires new
disclosures related to amounts reclassified out of accumulated other comprehensive income by component, as well as disclosures
related to reclassifications from accumulated other comprehensive income to net income. These disclosures may be presented
on the face of the consolidated financial statements or in the notes thereto. ASU 2013-02 is effective for fiscal years beginning
after December 15, 2012. Since ASU 2013-02 requires only additional disclosures, the adoption of ASU 2013-02 will not affect the
consolidated financial position, results of operations or cash flows of the Company.
In December 2011, the FASB issued ASU No. 2011-11, “Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). ASU
2011-11 enhances disclosures regarding financial instruments and derivative instruments and requires companies to provide both
net information and gross information for these assets and liabilities in order to enhance comparability between those companies
that prepare their financial statements in accordance with GAAP and those companies that prepare their financial statements in
accordance with International Financial Reporting Standards. ASU 2011-11 is effective for annual reporting periods beginning on or
after January 1, 2013 and interim periods within those annual periods. Since ASU 2011-11 requires only additional disclosures, the
adoption of ASU 2011-11 will not affect the consolidated financial position, results of operations or cash flows of the Company.