Annual report pursuant to Section 13 and 15(d)

Long-Term Debt

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Long-Term Debt
12 Months Ended
Dec. 31, 2011
Long-Term Debt [Abstract]  
Long-Term Debt

4.    Long-Term Debt

Long-term debt consists of the following (in millions):

 

 

                 
    December 31,  
    2011     2010  

Borrowings under prior senior secured credit facility

  $     $ 174.9  

Borrowings under the new senior secured revolving credit facility

    202.0        

Capital leases

    1.4       2.9  

Other debt

    0.2       0.3  
   

 

 

   

 

 

 
      203.6       178.1  

Less: current portion

    1.5       3.1  
   

 

 

   

 

 

 

Long-term portion

  $ 202.1     $ 175.0  
   

 

 

   

 

 

 

 

On July 21, 2006, the Company entered into a $300.0 million senior secured credit facility, or the Prior Credit Facility, comprised of a $200.0 million term loan and a $100.0 million revolving credit facility, with a syndicate of financial institutions as lenders. In September 2007, the Company and its lenders amended the credit agreement, increasing the amount of the revolving credit facility by an aggregate principal amount of $150.0 million to $250.0 million primarily to finance the increase in the Company’s share repurchase program. See Note 8, Shareholders’ Equity, for further discussion of the share repurchase program and the share repurchase amounts during the years ended December 31, 2011, 2010 and 2009. The term loan bore interest at LIBOR plus a margin of 1.5%, or the base rate plus a margin of 0.50%. The revolving credit facility bore interest at LIBOR plus a margin of 1.25%, or the base rate plus a margin of 0.25%.

On March 9, 2011, the Company entered into a $700.0 million senior secured revolving credit facility, or the New Credit Facility, with a syndicate of financial institutions as lenders and terminated its Prior Credit Facility. The New Credit Facility has a five year maturity and expires on March 9, 2016. During March 2011, U.S. dollar borrowings under the New Credit Facility incurred interest at the base rate plus a margin of 0.75% or LIBOR plus a margin of 1.75%. After March 2011, based on the Company’s consolidated leverage ratio, U.S. dollar borrowings under the New Credit Facility bear interest at either LIBOR plus the applicable margin between 1.50% and 2.50% or the base rate plus the applicable margin between 0.50% and 1.50%. The Company, based on its consolidated leverage ratio, pays a commitment fee between 0.25% and 0.50% per annum on the unused portion of the New Credit Facility. The New Credit Facility also permits the Company to borrow limited amounts in Mexican Peso and Euro currencies based on variable rates. The base rate under the New Credit Facility represents the highest of the Federal Funds Rate plus 0.50%, one-month LIBOR plus 1.00%, and the prime rate offered by Bank of America.

In March 2011, the Company used $196.0 million in U.S. dollar borrowings under the New Credit Facility to repay all amounts outstanding under the Prior Credit Facility. The Company incurred approximately $5.7 million of debt issuance costs in connection with the New Credit Facility. These debt issuance costs were recorded as deferred financing costs on the Company’s consolidated balance sheet and are being amortized over the term of the New Credit Facility. On December 31, 2011 and 2010, the weighted average interest rate for borrowings under the New Credit Facility and the Prior Credit Facility was 1.89% and 1.75%, respectively.

The New Credit Facility requires the Company to comply with a leverage ratio and an interest coverage ratio. In addition, the New Credit Facility contains customary covenants, including covenants that limit or restrict the Company’s ability to incur liens, incur indebtedness, make investments, dispose of assets, make certain restricted payments, pay dividends, repurchase its common shares, merge or consolidate and enter into certain transactions with affiliates. The Prior Credit Facility also required the Company to comply with a leverage ratio and an interest coverage ratio. The Prior Credit Facility also contained customary covenants, including covenants that limited or restricted the Company’s ability to incur liens, incur indebtedness, make investments, dispose of assets, make certain restricted payments, merge or consolidate and enter into certain transactions with affiliates. As of December 31, 2011 and 2010, the Company was compliant with its debt covenants under the New Credit Facility and Prior Credit Facility, respectively.

During 2011, the Company borrowed $859.7 million and $54.0 million under the New Credit Facility and Prior Credit Facility, respectively, and paid a total of $657.7 million and $228.9 million of the New Credit Facility and Prior Credit Facility, respectively. During 2010, the Company borrowed an aggregate amount of $427.0 million and paid a total amount of $487.0 million of the Prior Credit Facility. During 2009, the Company borrowed an aggregate amount of $212.0 million and paid a total amount of $298.7 million of the Prior Credit Facility. As of December 31, 2011, the U.S. dollar amount outstanding under the New Credit Facility was $202.0 million. There were no outstanding foreign currency borrowings as of December 31, 2011 under the New Credit Facility. As of December 31, 2010, the amounts outstanding under the Prior Credit Facility, consisting of a term loan and revolving credit facility, were $143.9 million and $31.0 million, respectively.

 

There are no annual scheduled principal payments under the Company’s New Credit Facility. All borrowings against the New Credit Facility must be repaid prior to its termination in March 2016.

Interest expense was $9.9 million, $9.7 million, and $9.6 million, for the years ended December 31, 2011, 2010 and 2009, respectively. Interest expense for the year ended December 31, 2011 included a $0.9 million write-off of unamortized deferred financing costs resulting from the extinguishment of the Prior Credit Facility, as discussed above.