Avon 2009 Annual Report Download - page 75

NOTE 4. Debt and Other Financing
Debt
Debt at December 31 consisted of the following:
2009 2008
Debt maturing within one year:
Notes payable $122.8 $125.4
Commercial paper –499.7
Yen credit facility –102.0
7.15% Notes, due November 2009 –300.0
Current portion of long-term debt 15.3 4.3
Total $138.1 $1,031.4
Long-term debt:
5.125% Notes, due January 2011 $499.8 $499.7
4.80% Notes, due March 2013 249.8 249.7
4.625% Notes, due May 2013 116.3 114.1
5.625% Notes, due March 2014 497.7 –
5.75% Notes, due March 2018 249.3 249.2
4.20% Notes, due July 2018 249.3 249.2
6.50% Notes, due March 2019 345.9 –
Other, payable through 2019 with
interest from 1.3% to 14.0% 87.4 14.7
Total long-term debt 2,295.5 1,376.6
Adjustments for debt with fair value
hedges 27.6 83.9
Less current portion (15.3) (4.3)
Total $2,307.8 $1,456.2
Notes payable included short-term borrowings of international
subsidiaries at average annual interest rates of approximately
5.8% at December 31, 2009, and 7.6% at December 31, 2008.
Other long-term debt, payable through 2019, included obligations
under capital leases of $15.3 at December 31, 2009, and $11.4
at December 31, 2008, which primarily relate to leases of auto-
mobiles and equipment. In addition, other long-term debt, payable
through 2019, at December 31, 2009, included financing lease
obligations entered into in 2009 for $72.1, which primarily
relates to the sale and leaseback of equipment and software in
one of our distribution facilities in North America.
Adjustments for debt with fair value hedges includes adjust-
ments to reflect net unrealized gains of $27.6 at December 31,
2009, and net unrealized gains of $80.0 at December 31, 2008,
on debt with fair value hedges and unamortized gains on termi-
nated swap agreements and swap agreements no longer des-
ignated as fair value hedges of $0 at December 31, 2009, and
$3.9 at December 31, 2008. See Note 7, Financial Instruments
and Risk Management.
We held interest-rate swap contracts that swap approximately
82% at December 31, 2009, and 50% at December 31, 2008 of
our long-term debt to variable rates. See Note 7, Financial Instru-
ments and Risk Management.
In March 2009, we issued $850.0 principal amount of notes
payable in apublic offering. $500.0 of the notes bear interest at
aper annum coupon rate equal to 5.625%, payable semi-
annually, and mature on March 1, 2014 (the “2014 Notes”).
$350.0 of the notes bear interest at aper annum coupon rate
equal to 6.50%, payable semi-annually, and mature on March 1,
2019 (the “2019 Notes”). The net proceeds from the offering of
$837.6 were used to repay the outstanding indebtedness under
our commercial paper program and for general corporate pur-
poses. In connection with the offering of the 2014 Notes, we
entered into five-year interest-rate swap agreements with
notional amounts totaling $500.0 to effectively convert the fixed
interest rate on the 2014 Notes to avariable interest rate, based
on LIBOR. The carrying value of the 2014 Notes represents the
$500.0 principal amount, net of the unamortized discount to face
value of $2.3 at December 31, 2009. The carrying value of the
2019 Notes represents the $350.0 principal amount, net of the
unamortized discount to face value of $4.1 at December 31, 2009.
In March 2008, we issued $500.0 principal amount of notes
payable in apublic offering. $250.0 of the notes bear interest
at aper annum coupon rate equal to 4.80%, payable semi-
annually, and mature on March 1, 2013, unless previously
redeemed (the “2013 Notes”). $250.0 of the notes bear interest
at aper annum coupon rate of 5.75%, payable semi-annually,
and mature on March 1, 2018, unless previously redeemed (the
“2018 Notes”). The net proceeds from theoffering of $496.3 were
used to repay outstanding indebtedness under our commercial
paper program and forgeneral corporate purposes. The carrying
value of the2013 Notes represents the$250.0 principal amount,
net of theunamortized discount to face value of $.2 at December
31, 2009, and $.3 at December31, 2008. The carrying value of the
2018 Notes represents the$250.0 principal amount, net of the
unamortized discount to face value of $.7 at December31, 2009,
and $.8 at December 31, 2008.
In January 2006, we issued in apublic offering $500.0 principal
amount of notes payable (the “5.125% Notes”) that mature on
January 15, 2011, and bear interest, payable semi-annually, at a
per annum rate equal to 5.125%. The net proceeds from the
offering were used for general corporate purposes, including the
repayment of short-term domestic debt. The carrying value of
the 5.125% Notes represents the$500.0 principal amount, net of
the unamortized discount to face value of $.2 at December 31,
2009, and $.3 at December 31, 2008.
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