Black & Decker 2011 Annual Report Download - page 42

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Cash payments for dividends were $276 million, $202 million, and $104 million in 2011, 2010 and 2009, respectively. The increase in
cash dividends in 2011 was primarily attributable to the increase in dividends per common share to $0.41 per share, as announced in
February 2011 which represents the 44
th
consecutive year of dividend increases. The increase in 2010 cash dividend payments versus
2009 is due to higher shares outstanding stemming from the Merger.
The Company repurchased $11 million of common stock in 2011, $5 million in 2010, and $3 million in 2009. Proceeds from the
issuance of common stock totaled $120 million in 2011, $396 million in 2010 and $61 million in 2009. The Company received
$320 million of cash proceeds in 2010 from the settlement of the forward stock purchase contracts element of the Equity Units. The
remaining amounts in each year mainly relate to the exercise of stock options.
Credit Ratings and Liquidity:
The Company maintains strong investment grade credit ratings from the major U.S. rating agencies on its senior unsecured debt
(average A-), as well as its short-term commercial paper borrowings. There have been no changes to any of the ratings during 2011.
Failure to maintain strong investment grade rating levels could adversely affect the Company’s cost of funds, liquidity and access to
capital markets, but would not have an adverse effect on the Company’s ability to access committed credit facilities. In March 2011,
the Company entered into a new four year $1.2 billion committed credit facility (the “Credit Agreement”). In connection with entering
into the Credit Agreement the Company terminated the existing $800.0 million Amended and Restated Credit Agreement.
Additionally, the $700.0 million 364-Day Credit Agreement dated as of March 12, 2010 expired in accordance with its terms on
March 11, 2011. Borrowings under the Credit Agreement may include U.S. Dollars up to the $1.2 billion commitment or in Euro or
Pounds Sterling subject to a foreign currency sublimit of $400.0 million and bear interest at a floating rate dependent upon the
denomination of the borrowing. Repayments must be made on March 11, 2015 or upon an earlier termination date of the Credit
Agreement, at the election of the Company. The Company has not drawn on the commitments provided by the Credit Agreement. In
July 2011, in connection with the Niscayah acquisition, the Company entered into a $1.25 billion 364 day credit facility
(“Facility”). Borrowings under the Facility may include U.S. Dollars or Euros up to the commitment and bear interest at a floating rate
dependent upon the denomination of the borrowing. The Facility decreased to $750 million (as per the terms of the agreement) in
December 2011 where it will remain until it expires in July 2012, or upon an earlier termination date at the election of the Company.
The Company has not drawn on the commitments provided by the Facility. These credit facilities are designated to be liquidity back-
stops for the Company’s commercial paper program. Finally, in August 2011, the Company increased its commercial paper program
from $1.5 billion to $2.0 billion.
As discussed in Note J, Capital Stock, of the Notes to the Consolidated Financial Statements in Item 8, in the third quarter of 2011 the
Company entered into a forward share purchase contract on its common stock which obligates the Company to pay $350.0 million to
the financial institution counterparty not later than August 2013, or earlier at the Company’s option, for the 5,581,400 shares
purchased.
Cash and cash equivalents totaled $907 million as of December 31, 2011, comprised of $82 million in the U.S. and $825 million in
foreign jurisdictions. As of January 1, 2011 cash and cash equivalents totaled $1.743 billion, comprised of $70 million in the U.S. and
$1.673 billion in foreign jurisdictions. Concurrent with the Merger, the Company made a determination to repatriate certain legacy
Black & Decker foreign earnings, on which U.S. income taxes had not previously been provided. As a result of this repatriation
decision, the Company has recorded approximately $421.7 million of associated deferred tax liabilities at December 31, 2011. Current
plans and liquidity requirements do not demonstrate a need to repatriate other foreign earnings. Accordingly, all other undistributed
foreign earnings of the Company are considered to be permanently reinvested, consistent with the Company’s overall growth strategy
internationally, including acquisitions and long-term financial objectives (as demonstrated by the recent acquisition of Niscayah). No
provision has been made for taxes that might be payable upon remittance of these undistributed foreign earnings. However, should
management determine at a later point to repatriate additional foreign earnings, the Company would be required to accrue and pay
taxes at that time.