Graco 2010 Annual Report Download - page 32

Newell Rubbermaid Inc. 2010 Annual Report
28 NEWELL RUBBERMAID 2010 Annual Report
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Cash provided by operating activities for 2009 was $602.8 million compared to $454.9 million for 2008. This improvement is
primarily attributable to working capital improvements, driven mainly by $243.1 million of cash provided by reducing inventories
in 2009 compared to $30.9 million in 2008, and an approximate $75.0 million decrease in payments in 2009 compared to 2008
for annual performance-based compensation, which is generally paid in the first quarter of the year based on the previous year’s
results. Cash provided by operating activities for 2009 includes a $75.0 million voluntary cash contribution the Company made
to its primary U.S. defined benefit pension plan and $126.6 million paid to settle foreign exchange contracts on intercompany
financing arrangements and cross-currency interest rate swaps.
In August 2010, the Company announced a Capital Structure Optimization Plan (the “Plan”), which was substantially complete
as of December 31, 2010 pending the settlement of the Company’s accelerated stock buyback expected in March 2011. The Plan
included the issuance of $550.0 million of 4.70% senior notes due 2020. The Company used the proceeds from the sale of the new
notes, cash on hand, and short-term borrowings to fund the repurchase of $500.0 million of shares of its common stock through
an accelerated stock buyback program and completed a cash tender offer for its outstanding $300.0 million principal amount of
10.60% notes due 2019, which resulted in the repurchase of $279.3 million principal amount of the notes. The Company received
$544.9 million of net proceeds from the issuance of the new 4.70% notes due 2020. The aggregate $547.3 million of net proceeds
from borrowings during 2010 compares with $634.8 million of net proceeds during 2009, which primarily relate to proceeds from the
offering and sale of $300.0 million of 10.60% notes due 2019 and $345.0 million convertible senior notes in March 2009. In connection
with the Plan, the Company received $71.1 million of net proceeds associated with the settlement of convertible note hedge and
warrant transactions during 2010. Net proceeds from short-term borrowings during 2010 included $100.0 million of borrowings
under the Company’s receivables facility and $34.0 million of commercial paper, which compares to $70.0 million of borrowings
under the receivables and $125.0 million of borrowings under the syndicated revolving credit facility (the “Revolver”) in 2009.
The Company received proceeds of $634.8 million and $1,318.0 million from the issuance of debt in 2009 and 2008, respectively.
In March 2009, the Company completed the offering and sale of $300.0 million of 10.60% notes due 2019 and $345.0 million convertible
senior notes. The $624.3 million of net proceeds from these note issuances were used to complete the tender offers to repurchase
$325.0 million principal amount of medium-term notes and purchase convertible note hedge transactions and for general corporate
purposes. Also related to the issuance of the convertible senior notes, the Company entered into warrant transactions in which
the Company sold warrants to third parties for approximately $32.7 million. During 2009, the Company borrowed and repaid
$70.0 million under a 364-day receivables facility that was completed in September 2009 and borrowed and repaid $125.0 million
under its Revolver. Proceeds from the issuance of debt in 2008 include $400.0 million of borrowings pursuant to an unsecured
three-year term loan (the “Term Loan”) and $750.0 million from the offering and sale of senior unsecured notes, consisting of
$500.0 million in 5.50% senior unsecured notes due April 2013 and $250.0 million in 6.25% senior unsecured notes due April 2018.
Net proceeds from the Term Loan were used to repay outstanding commercial paper and for general corporate purposes, and
net proceeds from the note offering were used to fund acquisitions, repay debt, and for general corporate purposes.
Uses
Historically, the Company’s primary uses of liquidity and capital resources have included acquisitions, dividend payments, capital
expenditures and payments on debt.
The Company made aggregate payments on short- and long-term debt of $710.8 million during 2010. In August 2010, the
Company completed a cash tender offer for $279.3 million of the $300.0 million principal amount of 10.60% notes due 2019 and
paid cash of $402.2 million upon settlement. The Company also completed an exchange offer for $324.7 million of the $345.0 million
principal amount of 5.5% convertible notes due 2014 (the “Convertible Notes”) (the “Exchange Offer”) and issued 37.7 million
shares of common stock and paid cash consideration of $52.0 million to holders accepting the Exchange Offer. The Company paid
$1.0 million in fees and expenses associated with the Exchange Offer. The Company made payments on medium-term notes and
other debt of $108.6 million and made payments of $200.0 million on its term loan during 2010.
The Company made aggregate payments on short- and long-term debt of $1,113.0 million during 2009. The $1,113.0 million of
repayments in 2009 includes $329.7 million used to complete tender offers to repurchase $180.1 million principal amount of the
$250.0 million medium-term notes due December 2009 and $144.9 million principal amount of the $250.0 million medium-term
notes due May 2010 (the “Tender Offers”), the $448.0 million repayment of the floating-rate note issued under the Company’s
2001 receivables facility, the repayment of $125.0 million of borrowings under the Revolver, a $50.0 million principal payment on
the Term Loan, and the repayment of the remaining $69.9 million principal amount outstanding of the $250.0 million medium-term
notes due December 2009. Also, as part of the convertible note hedge transactions entered into in March 2009, the Company
purchased call options from third parties for $69.0 million. See Footnote 10 of the Notes to Consolidated Financial Statements
for additional information on the call option transaction.
The Company made aggregate payments on short- and long-term debt of $772.5 million during 2008. In July 2008, the Company
redeemed its $250.0 million of Reset notes due July 2028 for $302.2 million, which includes the Company’s purchase of the
remarketing option embedded in the Reset notes from a third party for $52.2 million. In July 2008, the Company also repaid
$65.0 million of its $75.0 million outstanding 6.11% medium-term notes due July 2028 in accordance with the terms of the notes.
The Company utilized its commercial paper program to fund the redemption of the Reset notes, the purchase of the remarketing
option, and the repayment of the $65.0 million of 6.11% medium-term notes due July 2028. The remaining payments made on
debt during 2008 mainly represent the payoff of commercial paper.
The Company did not invest in significant acquisitions in 2010 and 2009. Cash used for acquisitions was $655.7 million in 2008,
which relates primarily to the acquisitions of Technical Concepts and Aprica. See Footnote 2 of the Notes to Consolidated Financial
Statements for further information.
Aggregate dividends paid were $55.4 million, $71.4 million and $234.5 million in 2010, 2009 and 2008, respectively.