Black & Decker 2012 Annual Report Download - page 84

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At December 29, 2012, the Company's carrying value of the $300.0 million notes payable due in 2016 includes increases of
$16.0 million associated with the fair value adjustment made in purchase accounting and $10.8 million pertaining to the
unamortized gain on a previously terminated swap.
At December 29, 2012, the Company had a fixed-to-floating interest rate swap on its $150.0 million notes payable due in 2028.
The carrying value of the notes payable due in 2028 includes $3.2 million pertaining to the fair value adjustment of the swap
and $16.4 million associated with fair value adjustments made in purchase accounting.
At December 29, 2012, the Company had a fixed-to-floating interest rate swaps on its $400.0 million notes payable due in
2021. The carrying value of the notes payable due in 2021 includes $1.1 million pertaining to the fair value adjustment of the
swaps and $16.3 million pertaining to the unamortized gain on previously terminated swaps slightly offset by $0.3 million
unamortized discount on the notes.
Unamortized gains and fair value adjustments associated with interest rate swaps are more fully discussed in Note I, Derivative
Financial Instruments.
Commercial Paper and Credit Facilities
At December 29, 2012 and December 31, 2011, the Company had no commercial paper borrowings outstanding against the
Company’s $2.0 billion commercial paper program.
At December 29, 2012, the Company had a $1.0 billion 364 day committed credit facility ("facility"). The facility contains a
one year term-out provision and borrowings under the Credit Agreement may include U.S. Dollars up to the $1.0 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 by July 12, 2013, unless the one
year term-out election is made, or upon an earlier termination date of the Credit Agreement, at the election of the Company. As
of December 29, 2012 and December 31, 2011, the Company had not drawn on the commitments provided by the facility. The
facility is designated to be a liquidity back-stop for the Company's $2.0 billion commercial paper program. In addition, the
Company has a four year $1.2 billion committed credit facility (the “Credit Agreement”). 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. This credit facility is
designated to be a liquidity back-stop for the Company’s $2.0 billion commercial paper program. At December 31, 2011, the
Company had a $750 million 364 day credit facility in connection with the Niscayah acquisition which the Company
terminated with the concurrent execution of the $1.0 billion 364 day facility.
In addition, the Company has short-term lines of credit that are primarily uncommitted, with numerous banks, aggregating
$382.3 million, of which $337.5 million was available at December 29, 2012. Short-term arrangements are reviewed annually
for renewal.
The aggregate amount of committed and uncommitted, long and short-term lines is $2.6 billion, of which $1.1 million is
recorded as short-term borrowings at December 29, 2012. In addition, $43.7 million of the short-term credit lines was utilized
primarily pertaining to outstanding letters of credit for which there are no required or reported debt balances. The weighted
average interest rates on short-term borrowings, primarily commercial paper, for the fiscal years ended December 29, 2012 and
December 31, 2011 were 0.4% and 0.3%, respectively.
Convertible Preferred Units
In November 2010, the Company issued 6,325,000 Convertible Preferred Units (the “Convertible Preferred Units”), each with
a stated amount of $100. The Convertible Preferred Units are initially comprised of a 1/10, or 10%, undivided beneficial
ownership in a $1,000 principal amount junior subordinated note (the “Note”) and a Purchase Contract (the “Purchase
Contract”) obligating holders to purchase one share (subject to adjustment under certain circumstances if holders elect to settle
their Purchase Contracts early) of the Company’s 4.75% Series B Perpetual Cumulative Convertible Preferred Stock (the
“Convertible Preferred Stock”). The Company received $613.5 million in cash proceeds from the Convertible Preferred Units
offering, net of underwriting fees. These proceeds were used to redeem all of the Company’s outstanding 5.902% Fixed
Rate/Floating Rate Junior Subordinated Debt Securities due 2045, at a price of $312.7 million, to contribute $150.0 million to a
U.S. pension plan to improve the funded status of the Company’s pension obligations, to fund the $50.3 million cost of the
capped call transaction as more fully described below, and the remainder to reduce outstanding short-term borrowings and for
other general corporate purposes.