Sunbeam 2002 Annual Report Download - page 41

Jarden Corporation
Notes to Consolidated Financial Statements (Continued)
The New Credit Agreement contains certain restrictions on the conduct of the Company’s business,
including, among other things restrictions, generally, on: incurring debt; making investments; exceeding
certain agreed upon capital expenditures; creating or suffering liens; completing certain mergers; consolida-
tions and sales of assets and with permitted exceptions, acquisitions; declaring dividends; redeeming or
prepaying other debt; and certain transactions with affiliates. The New Credit Agreement also requires the
Company to maintain certain financial covenants.
The seller debt financing consists of a non-interest bearing note in the principal amount of $10 million that
is due on March 31, 2003 and a note in the principal amount of $5 million, bearing interest at 5%, which is due
on April 24, 2004. For accounting purposes, the Company has imputed an interest rate of 5% on the $10 million
non-interest bearing note.
Until it was replaced by the New Credit Agreement on April 24, 2002, our senior credit facility, as amended
(‘‘Old Credit Agreement’’), provided for a revolving credit facility of $40 million and a term loan which
amortized periodically as required by the terms of the agreement. Interest on borrowings under the Old Credit
Agreement’s term loan and the revolving credit facilities were based upon fixed increments over adjusted
LIBOR or the agent bank’s alternate borrowing rate as defined in the agreement. The agreement also required
the payment of commitment fees on the unused balance. During the first quarter 2002, approximately $38
million of tax refunds the Company received were used to repay a portion of the outstanding amounts under
the Old Credit Agreement.
In May 1999, we entered into a three-year interest rate swap with an initial notional value of $90 million.
The swap effectively fixed the interest rate on approximately 60% of our term debt at a maximum rate of 7.98%
for the three-year period. The swap matured and was terminated in March 2002.
As of December 31, 2002, the Company had $47.5 million outstanding under the term loan facility and
zero outstanding under the $50 million revolving credit facility of the New Credit Agreement. The Company’s
weighted average interest rate on this outstanding amount at December 31, 2002 was 4.3%. Net availability
under the revolving credit agreement was approximately $45.8 million as of December 31, 2002, after
deducting $4.2 million of issued letters of credit. The Company is required to pay commitment fees on the
unused balance of the revolving credit facility.
As of December 31, 2001, the Company had outstanding amounts of $75.5 million and $9.4 million under
the term loan and revolving credit facilities, respectively, of its Old Credit Agreement. The weighted average
interest rate of the term loan facility was 4.3% exclusive of the effects of the interest rate swap see above. The
weighted average interest rate of the revolving credit facility was 4.7%.
As of December 31, 2002, maturities on Long-term Debt, net of unamortized debt discounts, over the next
five years, were $16.1 million in 2003, $13.9 million in 2004, $11.3 million in 2005, $13.7 million in 2006, $7.5
million in 2007 and $154.4 million thereafter.
The Company’s Long-term Debt includes approximately $6.6 million of non-debt balances (included in the
‘‘thereafter’’ balance above) arising from the interest rate swap transactions described in Note 16.
Because the interest rates applicable to the senior debt under the New Credit Agreement are based on
floating rates identified by reference to market rates, the fair market value of the senior debt as of December 31,
2002 approximates its carrying value. Also, because the interest rates applicable to the senior debt under the
Old Credit Agreement were based on floating rates identified by reference to market rates, the fair market value
of the senior debt as of December 31, 2001 approximated its carrying value.
As of December 31, 2002, the Company had incurred costs in connection with the issuance of the Notes,
New Notes and the New Credit Agreement of approximately $7.4 million, which are included in Other Assets
on the Consolidated Balance Sheet and amortized over the respective terms of the debt.
Interest paid on the Company’s borrowings during the years ended December 31, 2002, 2001 and 2000 was
$10.5 million, $9.5 million and $11.4 million, respectively.
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