Sunbeam 2012 Annual Report Download - page 25

Jarden Corporation Annual Report 2012 23
Management’s Discussion and Analysis
Jarden Corporation Annual Report 2012
CAPITAL RESOURCES
In September 2012, the Company completed a private offering for the sale of $500 million aggregate principal amount of the
Convertible Notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act and received net proceeds of
approximately $487 million after deducting fees and expenses. Upon closing, the Company used approximately $100 million of
the net proceeds to repurchase the Company’s common stock in privately negotiated transactions pursuant to its stock repurchase
program. The remainder of the net proceeds has and will be used for general corporate purposes. The conversion rate is
approximately 14.115 shares of the Company’s common stock (subject to customary adjustments, including in connection with a
fundamental change transaction) per $1 thousand principal amount of the Convertible Notes, which is equivalent to a conversion
price of approximately $70.85 per share. The Convertible Notes are not subject to redemption at the Company’s option prior to the
maturity date. Prior to June 1, 2018, the Convertible Notes will be convertible only upon the occurrence of certain events and during
certain periods, and thereafter, at any time until the second scheduled trading day immediately preceding the maturity date. If the
Company undergoes a fundamental change (as defined in the indenture governing the Convertible Notes) prior to maturity, holders
of the Convertible Notes will have the right, at their option, to require the Company to repurchase for cash some or all of their
Convertible Notes at a repurchase price equal to 100% of the principal amount of the Convertible Notes being repurchased, plus
accrued and unpaid interest.
In February 2012, the Company entered into an amendment to and borrowed $300 million under the Facility, which is comprised
of $150 million under its existing senior secured term loan A facility that matures in March 2016 and bears interest at LIBOR plus a
spread of 225 basis points; and $150 million under its existing senior secured term loan B facility that matures in January 2017 and
bears interest at LIBOR plus a spread of 300 basis points. The proceeds were used, in part, to repurchase shares of the Company’s
common stock under its accelerated stock repurchase program.
At December 31, 2012, there was no amount outstanding under the Company’s $250 million senior secured revolving credit facility
(the “Revolver”) that matures in 2016. The Revolver bears interest at certain selected rates, including LIBOR plus a spread of 225
basis points. At December 31, 2012, commitment fee on unused balances was 0.38% per annum.
The Company maintains a $400 million receivables purchase agreement (the “Securitization Facility”) that matures in February 2015.
At December 31, 2012, the borrowing rate margin and the unused line fee on the Securitization Facility were 0.90% and 0.45% per
annum, respectively. At December 31, 2012, the Securitization Facility had outstanding borrowings totaling $384 million.
At December 31, 2012, net availability under the Revolver and the Securitization Facility was approximately $237 million, after
deducting approximately $29 million of outstanding standby and commercial letters of credit.
Certain foreign subsidiaries of the Company maintain working capital lines of credit with their respective local financial institutions
for use in operating activities. At December 31, 2012, the aggregate amount available under these lines of credit totaled
approximately $97 million.
The Company was not in default of any of its debt covenants at December 31, 2012.
In January 2012, the Company commenced a “modified Dutch auction” self-tender offer (the “Offer”) to purchase up to $500
million in value of its common stock. In March 2012, pursuant to the terms of the Offer, the Company repurchased approximately
12.1 million shares of its common stock for a total purchase price of approximately $435 million or $36.00 per share. The repurchase
of shares of common stock under the Offer was made pursuant to the Company’s existing stock repurchase program (the “Stock
Repurchase Program”), pursuant to which the Company was then authorized to repurchase up to $500 million aggregate amount of
outstanding shares of common stock at prevailing market prices or in privately-negotiated transactions.
On September 11, 2012, the Company’s Board of Directors authorized an increase in the then available amount under the Stock
Repurchase Program to allow for the repurchase of up to $250 million in aggregate of the Company’s common stock.
In September 2012, pursuant to the Stock Repurchase Program, the Company used approximately $100 million of the net proceeds
from the Convertible Notes offering to repurchase approximately 1.9 million shares of its common stock at a price per share of
$52.87 through privately negotiated transactions.
During 2012, 2011 and 2010, the Company repurchased approximately 14.4 million, 2.5 million and 1.4 million shares, respectively, of
its common stock under these stock repurchase programs at a per share average price of $38.61, $30.42 and $29.62, respectively. At
December 31, 2012, approximately $131 million remains available under the Stock Repurchase Program.
On February 14, 2013, the Company announced that the Board approved a 3-for-2 stock split (the “Stock Split”) of its outstanding
shares of common stock. Stockholders of record at the close of business on February 25, 2013 will receive one additional share
of Jarden common stock for every two shares of Jarden common stock owned on that date. The additional shares are expected
to be distributed on or about March 18, 2013. After giving effect to the Stock Split, the Company expects to have approximately
118 million shares of common stock outstanding.