Sunbeam 2011 Annual Report Download - page 53

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51
Notes to Consolidated Financial Statements
Jarden Corporation Annual Report 2011 (Dollars in millions, except per share data and unless otherwise indicated)
Years Ending December 31,
Amount
(in millions)
2012 $ 269.6
2013 92.9
2014 107.9
2015 429.7
2016 371.2
Thereafter 1,913.0
Total principal payments 3,184.3
Net discount and other (24.9)
Total $ 3,159.4
At December 31, 2011 and 2010, unamortized deferred debt issue costs were $40.7 and $47.6, respectively. These costs are included
in “Other assets” on the consolidated balance sheets and are being amortized over the respective terms of the underlying debt.
At December 31, 2011 and 2010, the fair market value of total debt was approximately $3,245 and $3,330, respectively.
10. Derivative Financial Instruments
From time to time, the Company enters into derivative transactions to hedge its exposures to interest rate, foreign currency rate and
commodity price fluctuations. The Company does not enter into derivative transactions for trading purposes.
Interest Rate Contracts
The Company manages its fixed and floating rate debt mix using interest rate swaps. The Company uses 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, depending on market conditions, to convert the fixed rates of long-term debt into short-
term variable rates. 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.
Fair Values Hedges
During 2011, the Company terminated $350 notional amount outstanding in swap agreements that exchange a fixed rate of interest
for a variable rate (LIBOR) of interest and received $8.4 in net proceeds. These floating rate swaps, which were to mature in 2017,
were designated as fair value hedges against $350 of principal on the 7 1/2% senior subordinated notes due 2017. The gain on the
termination of these swaps is deferred and is being amortized over the remaining contractual term of the terminated swaps.
Cash Flow Hedges
During 2011, the Company entered into an aggregate $350 notional amount of interest rate swaps that exchange a variable rate of
interest (LIBOR) for an average fixed rate of interest the term of the agreements, which mature on December 31, 2015. These swaps
are forward-starting and are effective commencing December 31, 2013. The Company has designated these swaps as a cash flow
hedges of the interest rate risk attributable to forecasted variable interest (LIBOR) payments.
The Facility contains a covenant that restricts the Company and its subsidiaries from making certain “restricted payments” (any
dividend or other distribution, whether in cash, securities or other property, with respect to any stock or stock equivalents of the
Company or any subsidiary), except that:
• the Company may declare and make dividend payments or other distributions payable in common stock;
• the Company may repurchase shares of its own stock (provided certain financial and other conditions are met); and
• the Company may make restricted payments during any fiscal year not otherwise permitted, provided that certain financial
and other conditions are met
The Facility and the indentures related to the Senior Notes and the Senior Subordinated Notes (the “Indentures”) contain cross-
default provisions pursuant to which a default in respect to certain of the Company’s other indebtedness could trigger a default by
the Company under the Facility, the Foreign Debt and the Indentures. If the Company defaults under the covenants (including the
cross-default provisions), the Company’s lenders could foreclose on their security interest in the Company’s assets, which may have
a material adverse effect on the consolidated financial condition, results of operations or cash flows of the Company.
The Company’s obligations under the Facility, the Senior Subordinated Notes and the Senior Notes are guaranteed, on a joint and
several basis, by certain of its domestic subsidiaries, all of which are directly or indirectly wholly-owned by the Company (see Note 19).
The Company’s debt maturities for the five years following December 31, 2011 and thereafter are as follows: