Sunbeam 2007 Annual Report Download - page 59

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Contractual Obligations and Commercial Commitments
The following table includes aggregate information about the Company’s contractual obligations as of
December 31, 2007 and the periods in which payments are due. Certain of these amounts are not required to be
included in its Consolidated Balance Sheets:
Year(s)
Total 1 2-3 4-5 After 5
(in millions)
Long-term debt, including capital leases(1) ................ $2,752.4 $297.8 $ 42.0 $1,755.7 $656.9
Operating leases ..................................... 267.8 55.2 75.5 48.5 88.6
Unconditional purchase obligations ...................... 51.3 31.8 15.7 3.8 —
Other current and non-current obligations(2) .............. 83.9 71.5 2.6 2.6 7.2
Total .............................................. $3,155.4 $456.3 $135.8 $1,810.6 $752.7
(1) For further information regarding the Company’s debt and interest rate structure, refer to Note 9 – “Debt”
and Note 10 “Derivative Financial Instruments” to the consolidated financial statements. These amounts
reflect scheduled principal payments only.
(2) Other includes acquisition related earn-out payments of approximately $26 million anticipated to be paid in
2008.
The table above does not reflect tax reserves and accrued interest thereon of $88.5 million and $8.2 million,
respectively, as the Company cannot reasonably predict the timing of the settlement of the related tax positions
beyond 2008. See Note 12 “Taxes on Income” to the Consolidated Financial Statements for additional
information on the Company’s unrecognized tax benefits at December 31, 2007.
Commercial commitments are items that the Company could be obligated to pay in the future and are not
included in the above table. As of December 31, 2007, the Company had approximately $35 million in standby
and commercial letters of credit, all of which expire in 2008.
Certain of these amounts are not required to be included in its Consolidated Balance Sheets.
Risk Management
From time to time the Company may elect to enter into derivative transactions to hedge its exposures to
interest rate and foreign currency fluctuations. The Company does not enter into derivative transactions for
speculative purposes.
The Company actively manages its fixed and floating rate debt mix using interest rate swaps. The Company
will enter into fixed and floating rate swaps to alter its exposure to the impact of changing interest rates on its
consolidated results of operations and future cash outflows for interest. Floating rate swaps are used to convert
the fixed rates of long-term debt into short-term variable rates to take advantage of current market conditions.
Fixed rate swaps are used to reduce the Company’s risk of the possibility of increased interest costs. Interest rate
swap contracts are therefore used by the Company to separate interest rate risk management from the debt
funding decision.
Cash Flow Hedges
As a result of the Pure Fishing acquisition, the Company became a counterparty to a $100 million notional
amount in swap agreements that exchange variable interest rates (LIBOR) for fixed rates of interest over the term
of the agreements. At December 31, 2007, the weighted average fixed rate of interest and weighted average
remaining term of these swaps was 3.95% and 1.2 years, respectively. These swaps are not designated as
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