Sunbeam 2005 Annual Report Download - page 25

Management’s Discussion and Analysis of Financial Condition and
Results of Operations (cont’d)
was initially recorded in other comprehensive income with the remainder being reflected in SG&A in our
Consolidated Statements of Operations. U.S. dollar equivalent contractual notional amounts to purchase
and sell currencies for open foreign exchange contracts as of December 31, 2005 totaled $93.2 million.
As of December 31, 2005, we had $1.3 billion outstanding under our Term Loan facility including the
debt of approximately $56 million outstanding through certain of our foreign subsidiaries and no amounts
outstanding under our revolving credit facility (consisting of domestic revolver and swing line borrowings).
As of December 31, 2005, our net availability under the credit agreement was approximately $132.2 million,
after deducting $67.8 million of issued letters of credit. The letters of credit outstanding included $9.5
million securing the deferred consideration arising from the USPC Acquisition. We are required to pay
commitment fees on the unused balance of the revolving credit facility. At December 31, 2005, the annual
commitment fee on unused balances was 0.50%.
As of December 31, 2005, our 9
3
⁄ 4 % senior subordinated notes (the “Notes”) traded at a premium,
resulting in an estimated fair value, based upon quoted market prices, of approximately $185.4 million
compared to the book value of $179.9 million.
As of December 31, 2005, borrowings outstanding under various other foreign credit lines entered into
by certain of our non-U.S. subsidiaries totaled $5.9 million, and are primarily reflected as “Short-term debt
and current portion of long-term debt” in our Consolidated Balance Sheets. Certain of these foreign credit
lines are secured by the non-U.S. subsidiaries’ inventory and/or accounts receivable.
As of December 31, 2005, we also had capital lease obligations and other equipment financing
arrangements totaling $19.9 million.
On February 24, 2006 we executed an amendment to our senior credit facility which modified certain
covenants and permitted us to increase our repurchases of common stock. In connection with this
amendment, we agreed to repay $26.0 million of principal outstanding under the Term Loan facility, which
was repaid in March 2006 and accordingly classified as “Short-term debt and current portion of long term
debt” in our Consolidated Balance Sheets.
On March 1, 2006, pursuant to the new stock repurchase program, the Company repurchased 2.0
million shares of the Company’s common stock for $50.0 million through a privately negotiated sale.
2004 Activity
During 2004, the following changes were made to our capital resources:
‰we completed a $116 million add-on to our Term B loan facility (“Term B Add-on”) under a
Second Amended Credit Agreement, to partially fund the USPC Acquisition;
‰we repaid $5.4 million of seller debt financing;
‰we issued an aggregate of 1,432,620 restricted shares of common stock under our 2003 Stock
Incentive Plan, of which, in conjunction with the AHI transaction, the restrictions on 1,102,500 of
these shares were lapsed at the time of issuance and we accelerated the granting of a further
210,000 of these shares; and
‰in anticipation of the additional floating rate debt financing required to complete the AHI
Acquisition, we entered into two interest rate swaps that converted an aggregate of $300 million of
existing floating rate interest payments under our term loan facility for a fixed obligation.
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