Rayovac 2009 Annual Report Download - page 185

Table of Contents
Index to Financial Statements SPECTRUM BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
The Company may redeem all or a part of the 12% Notes, upon not less than 30 or more than 60 days notice, beginning August 28, 2012 at specified
redemption prices. Further, the indenture governing the 12% Notes require the Company to make an offer, in cash, to repurchase all or a portion of the
applicable outstanding notes for a specified redemption price, including a redemption premium, upon the occurrence of a change of control of the Company
, as defined in such indenture.
As of September 30, 2009, the Successor Company had outstanding principal of $218,076 under the 12% Notes.
The indenture governing the 12% Notes, or the 2019 Indenture, contains customary covenants that limit, among other things, the incurrence of
additional indebtedness, payment of dividends on or redemption or repurchase of equity interests, the making of certain investments, expansion into
unrelated businesses, creation of liens on assets, merger or consolidation with another company, transfer or sale of all or substantially all assets, and
transactions with affiliates.
In addition, the 2019 Indenture provides for customary events of default, including failure to make required payments, failure to comply with certain
agreements or covenants, failure to make payments on or acceleration of certain other indebtedness, and certain events of bankruptcy and insolvency.
Events of default under the indenture arising from certain events of bankruptcy or insolvency will automatically cause the acceleration of the amounts due
under the 12% Notes. If any other event of default under the 2019 Indenture occurs and is continuing, the trustee for the indenture or the registered holders
of at least 25% in the then aggregate outstanding principal amount of the 12% Notes, may declare the acceleration of the amounts due under those notes.
As of September 30, 2009, the Successor Company was in compliance with all covenants under the 12% Notes. The Successor Company, however, is
subject to certain limitations as a result of the Company’s Fixed Charge Coverage Ratio under the 2019 Indenture being below 2:1. Until the test is satisfied,
the Successor Company and certain of its subsidiaries are limited in their ability to make significant acquisitions or incur significant additional senior credit
facility debt beyond the Senior Credit Facilities. The Successor Company does not expect its inability to satisfy the Fixed Charge Coverage Ratio test to
impair its ability to provide adequate liquidity to meet the short−term and long−term liquidity requirements of its existing businesses, although no assurance
can be given in this regard.
(9) Income Taxes
Income tax (benefit) expense was calculated based upon the following components of income from continuing operations before income tax:
Successor
Company Predecessor Company
One Month
Ended
September 30,
2009
Eleven Months
Ended
August 30,
2009 2008 2007
Pretax (loss) income:
United States $ (28,043) $ 936,379 $(654,003) $(544,967)
Outside the United States 8,043 186,975 (260,815) 37,712
Total pretax (loss) income $ (20,000) $ 1,123,354 $(914,818) $(507,255)
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