Graco 2012 Annual Report Download - page 69

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In connection with the Plan, on August 17, 2010, the Company commenced an exchange offer for its $345.0 million outstanding
principal amount of Convertible Notes (the “Exchange Offer”). The Company offered to exchange 116.198 shares of its common
stock and a cash payment of $160 for each $1,000 principal amount of Convertible Notes tendered in the Exchange Offer. Holders
of the Convertible Notes exchanged $324.7 million principal amount of Convertible Notes in the Exchange Offer. The Company
issued approximately 37.7 million shares of its common stock valued at $638.0 million and paid approximately $52.0 million of
cash in exchange for the $324.7 million principal amount of Convertible Notes and retired the Convertible Notes received in the
Exchange Offer. The value of the shares issued in connection with the Exchange Offer, $638.0 million, increased stockholders’
equity, and the value of the equity component of the Convertible Notes received and extinguished in the Exchange Offer, $334.4
million, reduced stockholders’ equity during 2010. See Footnote 9 for further information. The Company settled the convertible
note hedge and warrant transactions with the counterparties and received $369.5 million from the counterparties for the value of
the convertible note hedge and paid the counterparties $298.4 million for the warrants. See Footnote 10 for further information.
In 2011, the Company exchanged 2.3 million shares valued at $44.7 million and $3.1 million of cash in exchange for substantially
all of the $20.3 million principal amount of Convertible Notes that remained outstanding after completion of the Exchange Offer.
The $44.7 million value of the shares issued in connection with the transactions increased stockholders’ equity, and the value of
the equity component of the Convertible Notes received and extinguished in the transactions, $25.8 million, reduced stockholders’
equity. See Footnote 9 for further information.
The following table displays the components of accumulated other comprehensive loss as of and for the year ended December 31,
2012 (in millions):
Foreign Currency
Translation
Loss, net of tax
Unrecognized
Pension & Other
Postretirement
Costs, net of tax
Derivative Hedging
Income (Loss), net of
tax Accumulated Other Comprehensive Loss
Balance at December 31, 2011 $ (207.1) $ (501.3) $ 1.4 $ (707.0)
Current period change 40.6 (119.8) (2.8) (82.0)
Balance at December 31, 2012 $ (166.5) $ (621.1) $ (1.4) $ (789.0)
The following table depicts the components of other comprehensive income (loss) presented on a pretax basis and the associated
income tax impact (in millions):
Foreign Currency
Translation Income
(Loss)
Change in
Unrecognized
Pension & Other
Postretirement
Costs Derivative Hedging Income (Loss)
Other
Comprehensive
Income (Loss)
2012
Pretax $ 42.1 $ (156.4) $ (4.1) $ (118.4)
Tax (expense) benefit (1.5) 36.6 1.3 36.4
After-tax $ 40.6 $ (119.8) $ (2.8) $ (82.0)
2011
Pretax $ (27.7) $ (112.4) $ 2.6 $ (137.5)
Tax benefit (expense) — 36.5 (1.0) 35.5
After-tax $ (27.7) $ (75.9) $ 1.6 $ (102.0)
2010
Pretax $ (13.1) $ (37.3) $ 0.3 $ (50.1)
Tax benefit (expense) — 30.3 — 30.3
After-tax $ (13.1) $ (7.0) $ 0.3 $ (19.8)
FOOTNOTE 4
Restructuring Costs
Project Renewal
In October 2011, the Company announced Project Renewal, a program designed to reduce the complexity of the organization and
increase investment in growth platforms within the business. In connection with the program, the Company consolidated three
operating groups into two and 13 global business units into nine. In addition, the Company consolidated a limited number of
manufacturing facilities and distribution centers as part of the program, with the goal of increasing operational efficiency, reducing
costs and improving gross margin. In October 2012, the Company committed to an expansion of Project Renewal, designed to