Black & Decker 2014 Annual Report Download - page 47

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of underwriting discounts and commission, before offering expenses, and recorded $345 million in long-term debt. The proceeds
were used primarily to repay commercial paper borrowings.
In the fourth quarter of 2014, the Company repurchased $46 million of 2022 Term Notes. In the fourth quarter of 2013, the
Company extinguished $300 million of its Black & Decker Corporation 5.75% senior notes due 2016. In the third quarter of
2012, the Company repurchased $900 million of its long-term debt via open market tender and exercise of its right under the
redemption provision of each of the notes. The initial funding of the repurchased debt was accomplished by utilizing excess
cash on hand and the issuance of Commercial Paper.
The Company has a five year $1.5 billion committed credit facility (the “Credit Agreement”). Borrowings under the Credit
Agreement may include U.S. Dollars up to the $1.5 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 June 27, 2018 or upon an earlier termination date of the Credit Agreement, at the election of the
Company. In June 2014, the Company’s $500.0 million 364 day committed credit facility (the “Facility”) expired. The Facility
was designated to be part of a liquidity back-stop for the Company’s commercial paper program. Following an evaluation of the
Company’s liquidity position, the Company elected not to negotiate a new 364 day committed credit facility. The Company’s
$2.0 billion commercial paper program is backed by its $1.5 billion Credit Agreement. As of January 3, 2015, the Company has
not drawn on the Credit Agreement.
Refer to Note H, Long-Term Debt and Financing Arrangement, and Note J, Capital Stock, in the Notes to Consolidated
Financial Statements in Item 8 for further discussion of the Company's financing arrangements.
Cash and cash equivalents totaled $497 million as of January 3, 2015, comprised of $46 million in the U.S. and $451 million in
foreign jurisdictions. As of December 28, 2013 cash and cash equivalents totaled $496 million, comprised of $57 million in the
U.S. and $439 million in foreign jurisdictions. Concurrent with the Black & Decker 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 $369 million of associated
deferred tax liabilities at January 3, 2015. 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, or will be remitted substantially free of additional tax, consistent with the Company’s overall growth strategy
internationally, including acquisitions and long-term financial objectives. 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.
Contractual Obligations: The following table summarizes the Company’s significant contractual obligations and commitments
that impact its liquidity:
Payments Due by Period
(Millions of Dollars) Total 2015 2016 – 2017 2018 – 2019 Thereafter
Long-term debt(a).................................................. $ 3,866 $ 6 $ 9 $ 986 $ 2,865
Interest payments on long-term debt(b) ................ 3,596 168 336 298 2,794
Operating leases..................................................... 331 84 117 72 58
Inventory purchase commitments(c) ..................... 275 275 — — —
Deferred compensation.......................................... 2412219
Marketing obligations............................................ 77 26 45 6 —
Derivatives (d) ....................................................... 41 — 7 34 —
Forward stock purchase contract (e)...................... 150 — 150 — —
Pension funding obligations(f) .............................. 94 94 — — —
Contract adjustment fees (g).................................. 31 17 14 — —
Total contractual cash obligations ......................... $ 8,485 $ 671 $ 680 $ 1,398 $ 5,736
(a) Future payments on long-term debt encompass all payments related to aggregate debt maturities, excluding certain fair
value adjustments included in long-term debt, as discussed further in Note H, Long-Term Debt and Financing
Arrangements.
(b) Future interest payments on long-term debt reflect the applicable fixed interest rate or variable rate for floating rate debt
in effect at January 3, 2015.