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40 Jarden Corporation Annual Report 2014
Up until December31, 2014, the nancial statements of the Company’s subsidiaries operating in Venezuela were remeasured at and are
reected in the Company’s consolidated nancial statements at the CENCOEX exchange rate (“ofcial exchange rate”) of 6.30 Bolivars
per U.S. dollar.
In 2013, the Venezuelan government established a new auction-based exchange rate market program, the Complementary System for
Foreign Currency Administration (“SICAD”). In 2014, the Venezuelan government mandated that dividends and royalties be executed
under the SICAD program and also introduced an additional currency exchange program, commonly referred to as SICAD-II. At
December31, 2014, the exchange rates for SICAD and SICAD-II were 12.0 and 50.0 Bolivars per U.S. dollar, respectively. Historically, the
majority of the Company’s purchases have qualied for the ofcial exchange rate and the Company has been able to convert Bolivars
at the ofcial exchange rate. Due to the evolving foreign exchange control environment in Venezuela and additional experience with
the with the various foreign exchange mechanisms, as of December31, 2014, the Company determined it would be most appropriate
for it to remeasure the nancial statements of the Company’s subsidiaries operating in Venezuela at the SICAD-II exchange rate. As a
result of the change to the SICAD-II exchange rate, the results of operations for 2014 includes a foreign exchange-related charge of
$151 related to the write-down of net monetary assets due to this remeasurement. This charge is included in SG&A. At December31,
2014, the Company’s Bolivar-denominated net assets were approximately $22.
On February8, 2013, the Venezuelan government announced its intention to further devalue the Bolivar relative to the U.S. dollar. As a
result of the devaluation, the ofcial 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 were remeasured at the ofcial exchange
rate. During 2013, the Company recorded $29.0 of 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 ofcial exchange rate.
These charges are included in SG&A.
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Subsequent Event
On February 10, 2015, the Venezuelan government established a new foreign exchange system, the Marginal Currency System
(“SIMADI”). Furthermore, in February 2015 shortly after establishment of SIMADI, the SICAD-II program was eliminated. The Company
is evaluating the impact of these events 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. Signicant accounting estimates and assumptions are used for, but not limited to, the allowance for
doubtful accounts; asset impairments; useful lives of tangible and intangible assets; pension and postretirement liabilities; tax valuation
allowances and unrecognized tax benets; 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 rened due to changes in the facts and circumstances supporting these accounting estimates. Such changes and
renements are reected 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 15%, 17% and 20% of the Company’s consolidated net sales in 2014, 2013 and 2012,
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.
Notes to Consolidated Financial Statements
Jarden Corporation Annual Report 2014 (Dollars in millions, except per share data and unless otherwise indicated)