Black & Decker 2012 Annual Report Download - page 104

90
December 29, 2012 December 31, 2011
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
Long-term debt, including current portion……………... $ 3,536.9 $
3,677.3
$
3,452.2
$
3,623.4
Derivative assets………………………………………... $ 99.0 $
99.0
$
142.5
$
142.5
Derivative liabilities…………………………………….. $ 91.5 $
91.5
$
181.7
$
181.7
The fair values of long-term debt instruments are considered Level 2 instruments within the fair value hierarchy and are
estimated using a discounted cash flow analysis, based on the Company’s marginal borrowing rates. The differences in
carrying values in long-term debt are attributable to the stated interest rates differing from the Company's marginal borrowing
rates. The fair value of the Company's variable rate short term borrowings approximate their carrying value at December 29,
2012 and December 31, 2011. The fair values of foreign currency and interest rate swap agreements, comprising the derivative
assets and liabilities in the table above, are based on current settlement values.
As discussed in Note B, Accounts and Notes Receivable, the Company has a deferred purchase price receivable related to sales
of trade receivables. The deferred purchase price receivable will be repaid in cash as receivables are collected, generally within
30 days, and as such the carrying value of the receivable approximates fair value.
N. OTHER COSTS AND EXPENSES
Other-net is primarily comprised of intangible asset amortization expense (See Note F, Goodwill and Intangible Assets, for
further discussion), currency related gains or losses, environmental expense and merger, and acquisition-related and other
charges primarily consisting of transaction costs, partially offset by pension curtailments and settlements. During the years
ended December 29, 2012, December 31, 2011, and January 1, 2011, Other-net included $53.3 million, $48.8 million, and
$36.3 million in merger and acquisition related costs, respectively.
Research and development costs, which are classified in SG&A, were $174.8 million, $139.3 million and $124.5 million for
fiscal years 2012, 2011 and 2010, respectively.
O. RESTRUCTURING AND ASSET IMPAIRMENTS
A summary of the restructuring reserve activity from December 31, 2011 to December 29, 2012 is as follows (in millions):
12/31/2011 Acquisitions
Net
Additions
Usage Currency 12/29/2012
2012 Actions
Severance and related costs…………….. $
—
$
—
$ 144.1 $
(68.2
) $ 2.2 $ 78.1
Asset impairments………………………
—
—
13.3 (13.3)
—
—
Facility closure………………………….
—
—
16.3 (8.1)
—
8.2
Subtotal 2012 actions……………...
—
—
173.7 (89.6) 2.2 86.3
Pre-2012 Actions
Severance and related costs…………….. 66.5
—
(0.9) (31.9) 0.3 34.0
Facility closure…………………………. 3.5
—
2.3 (0.9)
—
4.9
Subtotal Pre-2012 actions………… 70.0
—
1.4 (32.8) 0.3 38.9
Total……………………………………. $
70.0
$
—
$ 175.1 $
(122.4
) $ 2.5 $ 125.2
2012 Actions: During 2012, the Company continued with restructuring activities associated with the Merger, Niscayah and
other acquisitions, and recognized $61.2 million of restructuring charges related to activities initiated in the current year. Of
those charges, $39.5 million relates to severance charges associated with the reduction of approximately 500 employees, $10.9
million relates to facility closure costs, and $10.8 million relates to asset impairment charges.
In addition, the Company has initiated cost reduction actions in 2012 that were not associated with the Merger or other
acquisition activities, resulting in severance charges of $104.6 million pertaining to the reduction of approximately
1,600 employees, $5.4 million of facility; closure costs, and $2.5 million of asset impairment charges.
Of the $86.3 million reserves remaining as of December 29, 2012, the majority are expected to be utilized by the end of 2013.