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Jarden Corporation Annual Report 2014 43
Financial instruments that potentially subject the Company to credit risk consist primarily of trade receivables and interest-bearing
investments. Trade receivable credit risk is limited due to the diversity of the Company’s customers and the Company’s ongoing credit
review procedures. Collateral for trade receivables is generally not required. The Company places its interest-bearing cash equivalents
with major nancial institutions.
The Company is exposed to credit loss in the event of non-performance by the counterparties to its derivative nancial instruments, all
of which are highly rated nancial institutions; however, the Company does not anticipate non-performance by such counterparties.
Fair Value Measurements
GAAP denes three levels of inputs that may be used to measure fair value and requires that the assets or liabilities carried at fair value
be disclosed by the input level under which they were valued. The input levels are dened as follows:
Level1: Quoted market prices in active markets for identical assets and liabilities.
Level2: Observable inputs other than dened in Level 1, such as quoted prices for similar assets or liabilities; quoted prices
in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for
substantially the full term of the assets or liabilities.
Level3: Unobservable inputs that are not corroborated by observable market data.
The following table summarizes assets and liabilities that are measured at fair value on a recurring basis at December31,2014 and 2013:
2014
FairValueAsset(Liability)
(In millions) Level1 Level2 Level3  Total
Derivatives:    
Assets $ —  $29.3 $ —  $29.3
Liabilities —  (23.5)—  (23.5)
Available-for-sale securities —  1.5 —   1.5
Contingent consideration —   — (32.6) (32.6)
2013
FairValueAsset(Liability)
(In millions) Level1  Level2 Level3  Total
Derivatives:    
Assets $ —  $19.5 $ —  $19.5
Liabilities —  (19.7)—  (19.7)
Available-for-sale securities —  12.0 —  12.0
Contingent consideration —   — (43.0)(43.0)
Derivative assets and liabilities relate to interest rate swaps, foreign currency contracts and commodity contracts. Fair values are
determined by the Company using market prices obtained from independent brokers or determined using valuation models that use as
their basis readily observable market data that is actively quoted and can be validated through external sources, including independent
pricing services, brokers and market transactions. Available-for-sale securities are valued based on quoted market prices.
The fair value measurement of the contingent consideration obligations arising from acquisitions is based upon Level 3 inputs including,
in part, the estimate of future cash ows based upon the likelihood of achieving the various earn-out criteria. Changes in the fair value
of the contingent consideration obligations are recorded in SG&A.
Notes to Consolidated Financial Statements
Jarden Corporation Annual Report 2014 (Dollars in millions, except per share data and unless otherwise indicated)