Avon 2013 Annual Report Download - page 57

Debt and Contractual Financial Obligations and Commitments
At December 31, 2013, our debt and contractual financial obligations and commitments by due dates were as follows:
2014 2015 2016 2017 2018
2019 and
Beyond Total
Short-term debt $176.5 $ – $ – $ – $ – $ – $ 176.5
Long-term debt – 43.5 250.0 – 500.0 1,600.0 2,393.5
Capital lease and financing obligations(1) 11.5 10.2 8.6 6.2 6.5 16.6 59.6
Total debt 188.0 53.7 258.6 6.2 506.5 1,616.6 2,629.6
Debt-related interest 121.0 120.8 115.6 114.3 97.8 89.5 659.0
Total debt-related 309.0 174.5 374.2 120.5 604.3 1,706.1 3,288.6
Operating leases 103.0 83.8 72.2 61.0 40.4 146.3 506.7
Purchase obligations 169.1 62.2 15.4 8.2 3.6 4.6 263.1
Benefit obligations(2) 86.0 30.2 29.8 27.9 26.7 144.1 344.7
Total debt and contractual financial
obligations and commitments(3) $667.1 $350.7 $491.6 $217.6 $675.0 $2,001.1 $4,403.1
(1) Capital lease and financing obligations is primarily comprised of $44.5 related to the sale and leaseback of equipment in one of our distribution facilities in
North America entered into in 2009 and $11.6 of capital leases which were primarily related to automobiles and equipment.
(2) Amounts represent expected future benefit payments for our unfunded pension and postretirement benefit plans, as well as expected contributions for 2014
to our funded pension benefit plans. We are not able to estimate our contributions to our funded pension and postretirement plans beyond 2014.
(3) The amount of debt and contractual financial obligations and commitments excludes amounts due under derivative transactions. The table also excludes
information on non-binding purchase orders of inventory. The table does not include any reserves for uncertain income tax positions because we are unable
to reasonably predict the ultimate amount or timing of settlement of these uncertain income tax positions. At December 31, 2013, our reserves for uncertain
income tax positions, including interest and penalties, totaled $22.1.
See Note 5, Debt and Other Financing, and Note 14, Leases and Commitments, on pages F-17 through F-21, and on page F-45, respectively,
of our 2013 Annual Report for more information on our debt and contractual financial obligations and commitments. Additionally, as
disclosed in Note 15, Restructuring Initiatives on pages F-45 through F-49 of our 2013 Annual Report, we have a remaining liability of $48.5
associated with our $400M Cost Savings Initiative, at December 31, 2013. We also have a remaining liability of $14.3 associated with other
restructuring initiatives approved during 2012, and $1.2 associated with the restructuring charges recorded to-date under the 2005 and
2009 Restructuring Programs, at December 31, 2013. The majority of future cash payments associated with these restructuring liabilities are
expected to be made during 2014.
Off Balance Sheet Arrangements
At December 31, 2013, we had no material off-balance-sheet arrangements.
Capital Resources
Revolving Credit Facility
In March 2013, we entered into a four-year $1 billion revolving credit facility (the “revolving credit facility”), which expires in March 2017.
The revolving credit facility replaced the previous $1 billion revolving credit facility (the “2010 revolving credit facility”), which was
terminated in March 2013 prior to its scheduled expiration in November 2013. There were no amounts drawn under the 2010 revolving
credit facility on the date of termination and no early termination penalties were incurred. In the first quarter of 2013, $1.2 was recorded for
the write-off of issuance costs related to the 2010 revolving credit facility. As discussed below under “Commercial Paper Program,” the $1
billion available under the revolving credit facility is effectively reduced by the principal amount of any commercial paper outstanding.
Borrowings under the revolving credit facility bear interest, at our option, at a rate per annum equal to LIBOR plus an applicable margin or a
floating base rate plus an applicable margin, in each case subject to adjustment based on our credit ratings. The revolving credit facility may
be used for general corporate purposes. As of December 31, 2013, there were no amounts outstanding under the revolving credit facility,
and as of December 31, 2012, there were no amounts outstanding under the 2010 revolving credit facility.
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