Avon 2015 Annual Report Download - page 102

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The carrying value of the 2.375% Notes represented the $250.0 principal amount, net of the unamortized discount to face value of $.1 at
December 31, 2014. The carrying value of the 4.60% Notes represented the $500.0 principal amount, net of the unamortized discount to
face value of $.4 and $.6 at December 31, 2015 and 2014, respectively. The carrying value of the 5.00% Notes represented the $500.0
principal amount, net of the unamortized discount to face value of $3.5 and $4.0 at December 31, 2015 and 2014, respectively. The
carrying value of the 6.95% Notes represented the $250.0 principal amount, net of the unamortized discount to face value of $.7 and $.7 at
December 31, 2015 and 2014, respectively.
At December 31, 2015, we also had outstanding $250.0 principal amount of our 5.75% Notes due March 1, 2018 (the “2018 Notes”),
$250.0 principal amount of our 4.20% Notes due July 15, 2018 (the “4.20% Notes”) and $350.0 principal amount of our 6.50% Notes due
March 1, 2019 (the “2019 Notes”), with interest on each series of these Notes payable semi-annually. The carrying value of the 2018 Notes
represented the $250.0 principal amount, net of the unamortized discount to face value of $.2 and $.3 at December 31, 2015 and 2014,
respectively. The carrying value of the 4.20% Notes represented the $250.0 principal amount, net of the unamortized discount to face value
of $.2 and $.3 at December 31, 2015 and 2014, respectively. The carrying value of the 2019 Notes represented the $350.0 principal
amount, net of the unamortized discount to face value of $1.4 and $1.8 at December 31, 2015 and 2014, respectively.
The indentures governing our outstanding notes described above contain certain covenants, including limitations on the incurrence of liens
and restrictions on the incurrence of sale/leaseback transactions and transactions involving a merger, consolidation or sale of substantially all
of our assets. In addition, these indentures contain customary events of default and cross-default provisions. Further, we would be required
to make an offer to repurchase all of our outstanding notes described above, with the exception of our 4.20% Notes, at a price equal to
101% of their aggregate principal amount plus accrued and unpaid interest in the event of a change in control involving Avon and a
corresponding credit ratings downgrade to below investment grade.
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.
Term Loan Agreement
In 2012, we borrowed $550.0 under a term loan agreement (the “term loan agreement”). In March 2013, we repaid $380.0 of the
outstanding principal amount of the term loan agreement with a portion of the proceeds from the issuance of the 2013 Notes, which
repayment resulted in a loss in the first quarter of 2013 of $1.6 on extinguishment of debt associated with the write-off of debt issuance
costs related to the term loan agreement. On July 25, 2013, we prepaid $117.5 of the outstanding principal balance under the term loan
agreement, without prepayment penalties. On June 30, 2014, we paid the $52.5 remaining outstanding principal balance under the term
loan agreement, of which $39.4 was not yet due, without prepayment penalties, effectively terminating the term loan agreement since
amounts thereunder may not be reborrowed.
Private Notes
On March 29, 2013, we prepaid the $535.0 senior notes issued in 2010 in a private placement exempt from registration under the Securities
Act of 1933, as amended (the “Private Notes”). In connection with the prepayment of our Private Notes, we incurred a loss on
extinguishment of debt of $71.4 in the first quarter of 2013, which included a make-whole premium of $68.0 and the write-off of $3.4 of
debt issuance costs related to the Private Notes.
Maturities of Long-Term Debt
Annual maturities of long-term debt, which includes our notes (including unamortized discounts and premiums) and capital leases
outstanding at December 31, 2015, are as follows:
2016 2017 2018 2019 2020
2021
and Beyond Total
Maturities $4.8 $3.6 $503.2 $350.1 $500.0 $751.0 $2,112.7
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