Document BRZJe1VOOKxRpxnYBZGEeE4kJ

MAFCO CONSOLIDATED GROUP INC (Form 10-K, Received: 03/28/1997 00:00.0... Page 71 of 116 the payment of dividends or distributions by Consolidated Cigar to an amount equal to approximately $9 3 million as of December 31, 1996. F-16 MAFCO CONSOLIDATED GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (c) In connection with the Flavors Disposition, PCT assumed Mafco Worldwide's obligations under the Senior Credit and its 117/8% Senior Subordinated Note indenture Obligations under the Senior Credit bore interest at November 25, 1996 at approximately 8 20%. The fair value of the Company's long-term debt at December 31,1996 is estimated based on the quoted market prices for the same issues or on the current rates offered to the Company for debt of the same remaining maturities The estimated fair value of long-term debt was approximately $3.6 million more than the carrying value of $97.5 million In 1994, the Company recorded an extraordinary loss of $2 7 million, net of $1 7 million tax benefit, as a result of the June 1994 refinancing of certain indebtedness Prepayment premiums, original issue discounts and certain other capitalized costs of the refinanced indebtedness were expensed as such extraordinary loss. Because judgment is required m interpreting market data to develop estimates of fan- value, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange The effect of using different market assumptions or estimation methodologies may be material to the estimated fair value amounts Consolidated Cigar entered mto two five year interest rate swap agreements in an aggregate notional amount of $85 0 million Under the terms of the agreements. Consolidated Cigar receives a fixed interest rate averaging 5 4/5% and pays a variable interest rate equal to the six month LIBOR Consolidated Cigar entered mto such agreements to take advantage of the differential between long-term and short term interest rates and effectively converted the mterest rate on $85.0 million of fixed-rate indebtedness to a variable rate. From inception of the agreements through January 1997 Consolidated Cigar has paid $0 8 million in settlement, which occurs at the end of each six month penod of the agreements. Had Consolidated Cigar terminated these agreements, which the Company considers to be held for other than trading purposes, on January 31, 1997, a combined loss of approximately $1.1 million would have been realized. Future positive or negative cash flows associated with these agreements will depend upon the trend of short-term mterest rates during the remaining life of the agreements In the event of non performance of the counterparties at anytime dunng the remaimng lives of these agreements which expire at December 1998 and January 1999, the Company could lose some or all of any future positive cash flows However, the Company does not anticipate non-performance by such counterparties 9. INCOME TAXES Information pertaining to consolidated income from continuing operations before income taxes and extraordinary item and the applicable provision for income taxes, excluding amounts related to discontinued operations and to the extraordinary item, is as follows: F-17 http.//www.edgarpro.com/EFX_dll/EDGARpro.dll?FetchFihngHTMLl`?ID=969943&Ses 10/19/2003