Graco 2007 Annual Report Download - page 60

Newell Rubbermaid Inc. 2007 Annual Report
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FOOTNOTE 8
Other Accrued Liabilities
Accrued liabilities included the following as of December 31, (in millions):
2007 2006
Customer accruals $304.0 $277.1
Accrued self-insurance liability 82.1 86.9
Accrued restructuring (See Footnote 4) 39.7 31.8
Accrued pension, defined contribution and other postretirement benefits 49.9 49.2
Accruals for manufacturing expenses, including inventory received 122.0 118.2
Accrued medical and life insurance 11.4 14.7
Accrued interest and interest rate swaps 31.5 43.1
Accrued contingencies, primarily legal, environmental and warranty 27.4 35.5
Other 76.7 54.4
Other accrued liabilities $744.7 $710.9
Customer accruals are promotional allowances and rebates, including cooperative advertising, given to customers in exchange for their selling
efforts. The self-insurance accrual is primarily casualty liabilities such as workers’ compensation, general and product liability and auto liability and is
estimated based upon historical loss experience combined with actuarial evaluation methods, review of significant individual files and the application
of risk transfer programs.
FOOTNOTE 9
Credit Arrangements
The Company has short-term foreign and domestic uncommitted lines of credit with various banks that are available for short-term financing. Borrowings
under the Company’s uncommitted lines of credit are subject to the discretion of the lender. As of December 31, 2007 and 2006, the Company had notes
payable to banks in the amount of $15.3 million and $23.9 million, respectively, with weighted average interest rates of 10.9% and 6.3%, respectively.
On November 14, 2005, the Company entered into a $750.0 million five-year syndicated revolving credit facility (the “Revolver”). On an annual basis,
the Company may request an extension of the Revolver (subject to lender approval) for additional one-year periods. The Company elected to extend the
Revolver for additional one-year periods in both October 2006 and October 2007, and, as a result, the Revolver will now expire in November 2012. All but one
lender approved the extension in 2006. Accordingly, the Company has a $750.0 million facility through November 2010, and a $725.0 million facility from
November 2010 to November 2012. At both December 31, 2007 and 2006, there were no borrowings under the Revolver.
In lieu of borrowings under the Revolver, the Company may issue up to $750.0 million of commercial paper through 2010 and $725.0 million thereafter,
through 2012. The Revolver provides the committed backup liquidity required to issue commercial paper. Accordingly, commercial paper may only be issued
up to the amount available for borrowing under the Revolver. The Revolver also provides for the issuance of up to $100.0 million of standby letters of credit
so long as there is a sufficient amount available for borrowing under the Revolver. At December 31, 2007, there was $197.0 million of commercial paper
outstanding and no standby letters of credit issued under the Revolver. At December 31, 2006, there was no commercial paper outstanding and there were
no standby letters of credit issued under the Revolver.
The Revolver permits the Company to borrow funds on a variety of interest rate terms. The Revolver requires, among other things, that the Company
maintain certain interest coverage and total indebtedness to total capital ratios, as defined in the agreement. The Revolver also limits the amount of
indebtedness subsidiaries may incur. As of December 31, 2007 and 2006, the Company was in compliance with the provisions of the agreement governing
the Revolver.