Avon 2014 Annual Report Download - page 91

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NOTE 5. Debt and Other Financing
Debt
Debt at December 31 consisted of the following:
2014 2013
Debt maturing within one year:
Notes payable $ 122.0 $ 159.4
Current portion of long-term debt 15.1 28.6
Total $ 137.1 $ 188.0
Long-term debt:
Term Loan $ – $ 52.5
2.375% Notes, due March 2016 249.9 249.9
5.75% Notes, due March 2018 249.7 249.6
4.20% Notes, due July 2018 249.7 249.6
6.50% Notes, due March 2019 348.2 347.7
Other debt, payable through 2024 with interest
from .6% to 7.4% 57.4 67.9
4.60% Notes, due March 2020 499.4 499.3
5.00% Notes, due March 2023 496.0 495.5
6.95% Notes, due March 2043 249.3 249.3
Total 2,399.6 2,461.3
Amortization of swap termination 79.4 100.0
Less current portion (15.1) (28.6)
Total long-term debt $2,463.9 $2,532.7
Notes payable included short-term borrowings of international subsidiaries at average annual interest rates of approximately 4.2% at
December 31, 2014 and 6.5% at December 31, 2013.
Other debt, payable through 2024, included obligations under capital leases of $11.6 at December 31, 2014 and $11.6 at December 31,
2013, which primarily relate to leases of automobiles and equipment. In addition, other debt, payable through 2024, at December 31, 2014
and 2013, included financing obligations of $45.8 and $56.3, respectively, of which $40.4 and $44.5, respectively, relates to the sale and
leaseback of equipment in one of our distribution facilities in North America entered into in 2009, which is payable through 2019.
Public Notes
On April 15, 2013, we prepaid our 5.625% Notes, due March 1, 2014 (the “2014 Notes”) at a prepayment price equal to 100% of the
principal amount of $500.0, plus accrued interest of $3.4 and a make-whole premium of $21.7. In connection with the prepayment of our
2014 Notes, we incurred a loss on extinguishment of debt of $13.0 in the second quarter of 2013 consisting of the $21.7 make-whole
premium for the 2014 Notes and the write-off of $1.1 of debt issuance costs and discounts related to the initial issuance of the 2014 Notes,
partially offset by a deferred gain of $9.8 associated with the January 2013 interest-rate swap agreement termination. See Note 8, Financial
Instruments and Risk Management for more information. In addition, the $250.0 principal amount of our 4.80% Notes due March 1, 2013
and the $125.0 principal amount of our 4.625% Notes due May 15, 2013 were repaid in full at maturity.
In March 2013, we issued, in a public offering, $250.0 principal amount of 2.375% Notes, due March 15, 2016 (the “2016 Notes”), $500.0
principal amount of 4.60% Notes, due March 15, 2020 (the “2020 Notes”), $500.0 principal amount of 5.00% Notes, due March 15, 2023
(the “2023 Notes”) and $250.0 principal amount of 6.95% Notes, due March 15, 2043 (the “2043 Notes”) (collectively, the “Notes”). The
net proceeds from these Notes were used to repay $380.0 of the outstanding principal amount of the term loan agreement (as defined
below), to prepay the Private Notes (as defined below) and 2014 Notes (plus make-whole premium and accrued interest for both
prepayments), and to repay the 4.625% Notes, due May 15, 2013 at maturity. Interest on the Notes is payable semi-annually on March 15
and September 15 of each year. As a result of the long-term credit rating downgrades by S&P to BB+ (Stable outlook) and by Moody’s to
A V O N 2014 F-17