Black & Decker 2011 Annual Report Download - page 74

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H. LONG-TERM DEBT AND FINANCING ARRANGEMENTS
Long-term debt and financing arrangements at December 31, 2011 and January 1, 2011 follow:
Interest
Rate
2011
2010
Notes payable due 2011
................................
7.13%
$ —
$ 409.2
Notes payable due 2012
................................
4.90%
204.2
208.4
Convertible notes payable due in 2012 .........
3 month LIBOR less 3.50%
316.1
305.1
Notes payable due 2013
................................
6.15%
259.2
260.8
Notes payable due 2014
................................
4.75%
312.7
307.9
Notes payable due 2014
................................
8.95%
388.7
405.3
Notes payable due 2016
................................
5.75%
330.5
316.0
Notes payable due in 2018 (junior
subordinated)
4.25%
632.5
632.5
Notes payable due 2021
................................
3.40%
402.9
—
Notes payable due 2028
................................
7.05%
167.5
168.5
Notes payable due 2040
................................
5.20%
399.7
399.7
Other, payable in varying amounts through 2021
0.00% — 7.14%
38.2
20.8
Total long-term debt, including current maturities
$ 3,452.2
$ 3,434.2
Less: Current maturities of long-term debt .....
(526.4)
(416.1)
Long-term debt .............................................
$ 2,925.8
$ 3,018.1
Aggregate annual principal maturities of long-term debt for each of the years from 2012 to 2016 are $526.4 million, $256.8 million,
$656.3 million, $3.0 million, $302.1 million, respectively and $1,599.1 million thereafter. These debt maturities represent the principal
amounts to be paid and accordingly exclude the remaining $85.1 million of unamortized debt fair value adjustment, which increased
the Black & Decker debt, as well as $27.3 million of fair value adjustments and unamortized interest rate swap termination gains as
described in Note I, Derivative Financial Instruments. These amounts are partially offset by $3.9 million of remaining accretion on the
Stanley Convertible Notes as of December 31, 2011 that will gradually increase the debt to its $320.0 million principal amount due in
May 2012. Interest paid during 2011, 2010 and 2009 amounted to $135.4 million, $76.0 million and $53.7 million, respectively.
In November 2011, the Company issued $400.0 million of senior unsecured Term Notes, maturing on December 1, 2021 (“2021 Term
Notes”) with fixed interest payable semi-annually in arrears at a rate of 3.40% per annum. The 2021 Term Notes rank equally with all
of the Company’s existing and future unsecured and unsubordinated debt. The 2021 Term Notes are guaranteed on a senior unsecured
basis by The Black & Decker Corporation, a subsidiary of the Company, and are not obligations of or guaranteed by any of the
Company’s other subsidiaries. As a result, the 2021 Term Notes are structurally subordinated to all debt and other liabilities of the
Company’s subsidiaries, other than The Black & Decker Corporation. The Company received net proceeds of $397.0 million which
reflects a discount of $0.4 million to achieve a 3.40% interest rate and paid $2.6 million of fees associated with the transaction. The
Company used the net proceeds from the offering primarily to reduce its short term borrowings under its existing commercial paper
program. The 2021 Term Notes include a Change of Control provision that would apply should a Change of Control event (as defined
in the Indenture governing the 2021 Term Notes) occur. The Change of Control provision states that the holders of the Term Notes
may require the Company to repurchase, in cash, all of the outstanding 2021 Term Notes for a purchase price at 101.0% of the original
principal amount, plus any accrued and unpaid interest outstanding up to the repurchase date. Additionally, the 2021 Term Notes
include a par call whereby the Company, on or after September 1, 2021, may elect to repay the notes at par. The $402.9 million of
debt reported at December 31, 2011 reflects the fair value adjustment related to a fixed-to-floating interest rate swap entered into in
December 2011, as detailed in Note I, Derivative Financial Instruments.
In October 2011, the Company repaid $198.0 million of outstanding borrowings on the Niscayah historical revolving credit facility
that was assumed as part of the September 2011 acquisition.
In August 2011, the Company increased its commercial paper program from $1.5 billion to $2.0 billion. At December 31, 2011 and
January 1, 2011, the Company had no commercial paper borrowings outstanding against the Company’s commercial paper program.
In July 2011, in connection with the Niscayah acquisition, the Company entered into a $1.25 billion 364 day credit facility
(“Facility”). Borrowings under the Facility may include U.S. Dollars or Euros up to the commitment and bear interest at a floating rate
dependent upon the denomination of the borrowing. In accordance with the terms of the agreement, the Facility has been decreased to
$750 million in December 2011 where it will remain until it expires in July 2012, or upon an earlier termination date at the election of
the Company. This credit facility is designated to be a liquidity back-stop for the Company’s $2.0 billion commercial paper program.
In May 2011, the Company repaid its $400 million notes payable due 2011 with proceeds from additional borrowings of commercial
paper.