Sunbeam 2013 Annual Report Download - page 42
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Please find page 42 of the 2013 Sunbeam annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.38 Jarden Corporation Annual Report 2013
Company’s consolidated nancial statements at the ofcial exchange rate of 6.30 Bolivars per U.S. dollar, which is the Company’s
expected settlement rate.
On February8, 2013, the Venezuelan government announced its intention to further devalue its currency (Bolivar) relative to the U.S.
dollar. As a result of the devaluation, the ofcial exchange rate changed to 6.30 Bolivars per U.S. dollar for imported goods. As such,
beginning in February 2013, the nancial statements of the Company’s subsidiaries operating in Venezuela are remeasured at and will
be reected in the Company’s consolidated nancial statements at the new ofcial exchange rate. During 2013, the Company recorded
$29.0 devaluation-related charges related to its Venezuela operations, which are almost entirely comprised of a non-cash charge
related to the write-down of monetary assets due to the change in the ofcial exchange rate. These charges are included in SG&A.
Through December31, 2013, the Venezuelan government had established one ofcial exchange rate for qualifying dividends and
imported goods and services. Transactions at the ofcial exchange rate are subject to approval by the Venezuelan government’s
Foreign Exchange Administrative Commission (“CADIVI”). The nancial statements of the Company’s subsidiaries operating in
Venezuela are remeasured at and are reected in the Company’s consolidated nancial statements at the ofcial exchange rate of 6.30
Bolivars per U.S. dollar, which is the Company’s expected settlement rate at December31, 2013.
In March 2013, CADIVI established a new auction-based exchange rate market program, the Complementary System for Foreign
Currency Administration (“SICAD”). Through December31, 2013, the notional amount of transactions that have been processed through
SICAD programs has been limited, which essentially eliminates the Company’s ability to access any foreign exchange rate other than
the ofcial exchange rate.
On January, 24, 2014, the Venezuelan government announced that, effective immediately, dividends and royalties will be executed
under the SICAD program. Dividends and royalties were previously executed at the ofcial exchange rate of 6.30 Bolivars per U.S.
dollar. The Company expects to continue to use the ofcial exchange rate for all transactions except dividends and royalties. The
Company is evaluating the impact of this announcement to determine the potential charge that could result from remeasuring the
Bolivar-denominated net monetary assets of the Company’s Venezuela operations, as well as the ongoing operational and nancial
impact.
Use of Estimates
The preparation of the consolidated nancial statements in accordance with GAAP requires estimates and assumptions that affect
amounts reported and disclosed in the consolidated nancial statements and accompanying notes. Actual results could differ
materially from those estimates. Signicant accounting estimates and assumptions are used for, but not limited to, the allowance for
doubtful accounts; assets impairments; useful lives of tangible and intangible assets; pension and postretirement liabilities; tax valuation
allowances and unrecognized tax benets; reserves for sales returns and allowances; product warranty; product liability; excess and
obsolete inventory valuation; stock-based compensation; and litigation and environmental liabilities. These accounting estimates
may be adjusted or rened due to changes in the facts and circumstances supporting these accounting estimates. Such changes and
renements are reected in the consolidated nancial statements in the period in which they are made and, if material, their effects are
disclosed in the consolidated nancial statements.
Concentrations of Credit Risk
Substantially all of the Company’s trade receivables are due from retailers and distributors located throughout Asia, Canada, Europe,
Latin America and the United States. Approximately 17%, 20% and 20% of the Company’s consolidated net sales in 2013, 2012 and 2011,
respectively, were to a single customer who purchased product from all of the Company’s business segments.
Cash and Cash Equivalents
The Company considers highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Accounts Receivable
The Company provides credit, in the normal course of business, to its customers. The Company maintains an allowance for doubtful
customer accounts for estimated losses that may result from the inability of the Company’s customers to make required payments.
That estimate is based on a variety of factors, including historical collection experience, current economic and market conditions, and
a review of the current status of each customer’s trade accounts receivable. The Company charges actual losses when incurred to this
allowance.
Leasehold Improvements
Leasehold improvements are recorded at cost less accumulated amortization. Improvements are amortized over the shorter of the
remaining lease term (and any renewal period if such a renewal is reasonably assured at inception) or the estimated useful lives of the
assets.
Notes to Consolidated Financial Statements
Jarden Corporation Annual Report 2013 (Dollars in millions, except per share data and unless otherwise indicated)