Black & Decker 2014 Annual Report Download - page 84

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debentures, defer interest payments on the debentures, from time to time, for one or more Optional Deferral Periods (as defined
in the indenture governing the 2052 Junior Subordinated Debentures) of up to five consecutive years per period. Deferral of
interest payments cannot extend beyond the maturity date of the debentures. Additionally, the 2052 Junior Subordinated Debentures
include an optional redemption whereby the Company may elect to redeem the debentures, in whole or in part, at the redemption
price plus accrued and unpaid interest if redeemed before July 25, 2017, or at 100% of their principal amount plus accrued and
unpaid interest if redeemed after July 25, 2017.
In May 2012, the Company repaid the $320.0 million principal of its Convertible Notes at maturity, in cash. Additionally, the
Company settled the conversion option value by delivering 640,018 common shares. The conversion rate was 15.6666 per $1,000
note (equivalent to a conversion price set at $63.83 per common share), and the applicable market value of the Company's stock
at settlement was $73.24. The Company's Bond Hedge also matured May 17, 2012 resulting in the receipt of 640,772 common
shares from the counterparties. The aggregate effect of these financial instruments was a 754 share reduction in the Company’s
common shares. During August and September 2012, 4,938,624 stock warrants associated with the Convertible Notes expired.
No shares were issued upon their expiration as the warrants were out of the money.
At January 3, 2015, the Company's carrying value of its $400.0 million notes payable due 2021 includes a loss of $8.5 million
pertaining to the fair value adjustment of fixed-to-floating interest rate swaps, $12.7 million pertaining to the unamortized gain
on previously terminated swaps and a $0.3 million unamortized discount on the notes.
At January 3, 2015, the Company's carrying value on its $150.0 million notes payable due 2028 includes gains of $1.7 million
pertaining to the fair value adjustment of the fixed-to-floating interest rate swaps and $14.3 million associated with fair value
adjustments made in purchase accounting.
At January 3, 2015, the Company's carrying value of its $400.0 million notes payable due in 2040 includes $37.7 million pertaining
to the unamortized loss on previously terminated fixed-to-floating interest rate swaps and a $0.2 million unamortized discount on
the notes.
At January 3, 2015, the Company's carrying value of its $400.0 million 2053 Junior Subordinated Debentures includes a $1.3
million loss pertaining to the fair value adjustment of the fixed-to-floating interest rate swaps.
Unamortized gains and fair value adjustments associated with interest rate swaps are more fully discussed in Note I, Derivative
Financial Instruments.
Commercial Paper and Credit Facilities
At January 3, 2015, the Company had no commercial paper borrowings outstanding and at December 28, 2013, the Company had
$368.0 million of commercial paper borrowings outstanding against the Company’s $2.0 billion commercial paper program.
In June 2013, the Company terminated its four year $1.2 billion committed credit facility with the concurrent execution of a new
five year $1.5 billion committed credit facility (the “Credit Agreement”). Borrowings under the Credit Agreement may include
U.S. Dollars up to the $1.5 billion commitment or in Euro or Pounds Sterling subject to a foreign currency sub-limit of $400.0
million and bear interest at a floating rate dependent upon the denomination of the borrowing. Repayments must be made on June
27, 2018 or upon an earlier termination date of the Credit Agreement, at the election of the Company. The Credit Agreement is
designated to be a liquidity back-stop for the Company's $2.0 billion commercial paper program. As of January 3, 2015, the
Company has not drawn on this commitment. In June 2014, the Company's $500 million 364 day committed credit facility (the
"Facility") expired. The Facility was designated to be part of a liquidity back-stop for the Company's commercial paper program.
Following an evaluation of the Company's liquidity position, the Company elected not to negotiate a new 364 day committed
credit facility.
In addition, the Company has short-term lines of credit that are primarily uncommitted, with numerous banks, aggregating $670.5
million, of which $568.2 million was available at January 3, 2015. Short-term arrangements are reviewed annually for renewal.
At January 3, 2015, the aggregate amount of committed and uncommitted, long- and short-term lines was $2.7 billion, of which
$1.6 million was recorded as short-term borrowings at January 3, 2015 excluding commercial paper borrowings outstanding. In
addition, $102.3 million of the short-term credit lines was utilized primarily pertaining to outstanding letters of credit for which
there are no required or reported debt balances. The weighted average interest rates on short-term borrowings, primarily commercial
paper, for the fiscal years ended January 3, 2015 and December 28, 2013 were 0.2% and 0.3%, respectively.