Graco Inc.

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SEC Filings

10-K
GRACO INC filed this Form 10-K on 02/21/2017
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Under terms of the amended revolving credit agreement, borrowings may be denominated in U.S. dollars or certain other currencies. Loans denominated in U.S. dollars bear interest, at the Company’s option, at either a base rate or a LIBOR-based rate. Loans denominated in currencies other than U.S. dollars bear interest at a LIBOR-based rate. The base rate is an annual rate equal to a margin ranging from zero percent to 0.75 percent, depending on the Company’s cash flow leverage ratio (debt to earnings before interest, taxes, depreciation, amortization and extraordinary non-operating or non-cash charges and expenses) plus the highest of (i) the bank’s prime rate, (ii) the federal funds rate plus 0.5 percent, or (iii) one-month LIBOR plus 1.5 percent. In general, LIBOR-based loans bear interest at LIBOR plus 1 percent to 1.75 percent, depending on the Company’s cash flow leverage ratio. In addition to paying interest on the outstanding loans, the Company is required to pay a fee on the unused amount of the loan commitments at an annual rate ranging from 0.125 percent to 0.25 percent, depending on the Company’s cash flow leverage ratio.

On December 30, 2016, the Company had $544 million in lines of credit, including the $500 million in committed credit facilities described above and $44 million with foreign banks. The unused portion of committed credit lines was $504 million as of December 30, 2016. In addition, the Company has unused, uncommitted lines of credit with foreign banks totaling $26 million. Borrowing rates under these credit lines vary with the prime rate, rates on domestic certificates of deposit and the London Interbank market. The Company pays facility fees at an annual rate of up to 0.15 percent on certain of these lines. No compensating balances are required.

Various debt agreements require the Company to maintain certain financial ratios as to cash flow leverage and interest coverage. The Company is in compliance with all financial covenants of its debt agreements as of December 30, 2016.

Annual maturities of debt are as follows (in thousands):
 
2017
 
2018
 
2019
 
2020
 
2021
 
Thereafter
Maturities of debt
$
8,913

 
$
75,000

 
$

 
$
75,000

 
$
5,685

 
$
150,000


Interest paid on debt was $17.6 million in 2016, $17.5 million in 2015 and $18.6 million in 2014.

G. Shareholders’ Equity

At December 30, 2016, the Company had 22,549 authorized, but not issued, cumulative preferred shares, $100 par value. The Company also has authorized, but not issued, a separate class of 3 million shares of preferred stock, $1 par value.

Changes in components of accumulated other comprehensive income (loss), net of tax were (in thousands):
 
Pension and
Postretirement
Medical
 
Cumulative
Translation
Adjustment
 
Total
Balance, December 27, 2013
$
(50,132
)
 
$
3,783

 
$
(46,349
)
Other comprehensive income (loss) before reclassifications
(29,563
)
 
(27,935
)
 
(57,498
)
Amounts reclassified from accumulated other comprehensive income
3,111

 

 
3,111

Balance, December 26, 2014
(76,584
)
 
(24,152
)
 
(100,736
)
Other comprehensive income (loss) before reclassifications
641

 
(10,423
)
 
(9,782
)
Amounts reclassified from accumulated other comprehensive income
6,021

 

 
6,021

Balance, December 25, 2015
(69,922
)
 
(34,575
)
 
(104,497
)
Other comprehensive income (loss) before reclassifications
(12,169
)
 
(31,227
)
 
(43,396
)
Amounts reclassified from accumulated other comprehensive income
5,665

 

 
5,665

Balance, December 30, 2016
$
(76,426
)
 
$
(65,802
)
 
$
(142,228
)


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