Sunbeam 2005 Annual Report Download - page 28

Management’s Discussion and Analysis of Financial Condition and
Results of Operations (cont’d)
Cash and Financing Availability
Cash provided by financing activities increased to $1.3 billion from $98.1 million for the years ended
December 31, 2005 and 2004, respectively, primarily due to the funding associated with the AHI
Acquisition and the THG Acquisition.
We believe that our cash and cash equivalents on hand, cash generated from our operations and our
availability under our senior credit facility is adequate to satisfy our working capital and capital expenditure
requirements for the foreseeable future. However, we may raise additional capital from time to time to take
advantage of favorable conditions in the capital markets or in connection with our corporate development
activities. Our ability to access both debt and equity capital markets and to obtain attractive rates of return
on our invested capital is dependent on the capital market conditions in general. For example, rising
interest rates could increase our interest expense. Additionally, stock market devaluation in general could
devalue our publicly traded common stock and thereby make it more difficult to attract equity investors.
Contractual Obligations and Commercial Commitments
The following table includes aggregate information about our contractual obligations as of
December 31, 2005 and the periods in which payments are due. Certain of these amounts are not required
to be included in our consolidated balance sheets:
Total
Less
than 1
Year 1-3 Years 3-5 Years After 5 Years
(in millions)
Long-term debt, including scheduled interest
payments (1) ..................................... $2,278.8 $182.3 $222.9 $219.2 $1,654.4
Capital leases, including scheduled interest payments ..... 24.1 2.2 4.4 17.5 —
Operating leases .................................... 129.4 30.1 39.8 23.0 36.5
Unconditional purchase obligations .................... 3.9 3.5 0.4 — —
Pension and post-retirement obligations ................ 221.7 20.6 59.8 39.1 102.2
Other current and non-current obligations ............... 40.6 38.2 1.2 1.2 —
Total .............................................. $2,698.5 $276.9 $328.5 $300.0 $1,793.1
(1) The debt amounts are based on the principal payments that will be due upon their maturity as well as
scheduled interest payments, excluding the impact from interest rate swaps.Interest payments on our
variable debt have been calculated based on their scheduled payment dates and using the weighted
average interest rate on our variable debt as of December 31, 2005. Interest payments on our fixed rate
debt are calculated based on their scheduled payment dates. The debt amounts exclude approximately
$16.6 million of amortizing non-debt balances arising from the interest rate swap transactions described in
Note 6 – Derivative Financial Instruments to Item 8. Financial Statements and Supplementary Data.
Commercial commitments are items that we could be obligated to pay in the future and are not
included in the above table:
‰As of December 31, 2005, we had $67.8 million in standby and commercial letters of credit all of
which expire in 2006,
‰In connection with the USPC Acquisition, we may be obligated to pay an earn-out provision with a
potential payment in cash of up to $2 million and an additional potential payment of up to $8
million (for a potential total of up to $10 million) in either cash or our common stock in 2007, at our
discretion, provided that certain earnings performance targets are met. This obligation is included
in “Deferred consideration for acquisitions” within the Consolidated Balance Sheet.
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