Black & Decker 2014 Annual Report Download - page 107

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93
The following table presents the carrying values and fair values of the Company's financial assets and liabilities, as well as the
Company's debt, as of January 3, 2015 and December 28, 2013 (millions of dollars):
January 3, 2015 December 28, 2013
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
Other investments ........................................................... $ 11.7 $ 11.9 $ 14.8 $ 14.7
Derivative assets ............................................................. $ 144.2 $ 144.2 $ 91.7 $ 91.7
Derivative liabilities........................................................ $ 148.4 $ 148.4 $ 212.3 $ 212.3
Long-term debt, including current portion...................... $ 3,845.7 $ 4,323.8 $ 3,809.3 $ 3,889.4
The other investments relate to the West Coast Loading Corporation ("WCLC") trust and are considered Level 1 instruments
within the fair value hierarchy. The long-term debt instruments are considered Level 2 instruments and are measured using a
discounted cash flow analysis based on the Company’s marginal borrowing rates. The differences between the carrying values
and fair values of long-term debt are attributable to the stated interest rates differing from the Company's marginal borrowing
rates. The fair values of the Company's variable rate short term borrowings approximate their carrying values at January 3,
2015 and December 28, 2013. The fair values of foreign currency and interest rate swap agreements, comprising the derivative
assets and liabilities in the table above, are based on current settlement values.
As discussed in Note B, Accounts and Notes Receivable, the Company has a deferred purchase price receivable related to sales
of trade receivables. The deferred purchase price receivable will be repaid in cash as receivables are collected, generally within
30 days, and as such the carrying value of the receivable approximates fair value.
Refer to Note I, Derivative Financial Instruments, for more details regarding derivative financial instruments, Note S,
Contingencies, for more details regarding the other investments related to the WCLC trust, and Note H, Long-Term Debt and
Financing Arrangements, for more information regarding the carrying values of the long-term debt.
N. OTHER COSTS AND EXPENSES
Other-net is primarily comprised of intangible asset amortization expense (See Note F, Goodwill and Intangible Assets),
currency related gains or losses, environmental remediation expense and other charges primarily consisting of merger and
acquisition-related transaction costs, as well as pension curtailments and settlements. During the years ended January 3, 2015,
December 28, 2013, and December 29, 2012, Other-net included $1.7 million, $30.8 million, and $53.3 million in merger and
acquisition-related costs, respectively.
Research and development costs, which are classified in SG&A, were $174.6 million, $170.7 million and $151.4 million for
fiscal years 2014, 2013 and 2012, respectively.
O. RESTRUCTURING CHARGES
A summary of the restructuring reserve activity from December 28, 2013 to January 3, 2015 is as follows (in millions):
12/28/2013
Net
Additions Usage Currency 1/3/2015
Severance and related costs ......................................... $ 169.9 $ 15.1 $ (96.7)$ (7.1)$ 81.2
Facility closures and other ........................................... 21.6 3.7 (8.2)(0.7)16.4
Total............................................................................. $ 191.5 $ 18.8 $ (104.9)$ (7.8)$ 97.6
During 2014, the Company recognized $18.8 million of net restructuring charges. The net severance charge of $15.1 million
relates to cost reductions associated with the severance of employees, inclusive of reversals due to changes in management's
strategy for certain businesses as a result of new developments during 2014 as well as adjustments of severance accruals due to
the finalization of previously approved headcount actions. Also included in net restructuring charges are facility closure costs
of $3.7 million.
Of the $97.6 million reserves remaining as of January 3, 2015, the majority are expected to be utilized by the end of 2015.
Segments: The $18.8 million of net charges recognized in 2014 includes: $12.8 million of net charges pertaining to the CDIY
segment; $2.2 million of net reserve reductions pertaining to the Industrial segment; $6.5 million of net charges pertaining to
the Security segment; and $1.7 million of net charges pertaining to Corporate charges.