XML 44 R9.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Long-Term Debt | 12 Months Ended
--- | ---
Dec. 31, 2011
Long-term Debt, Unclassified [Abstract] |
Long-term Debt [Text Block] |
| LONG-TERM DEBT AND LEASE OBLIGATIONS
Long-term debt consists of the following:
| December 31,
| 2011 |  | 2010
| (in millions)
Revolving credit facility | $ | — |  |  | $ | — |
9.25% Notes, net of discount | 379.0 |  |  | 420.3 |
7.875% Notes | 300.0 |  |  | 300.0 |
7.75% Notes | 200.0 |  |  | — |
5.25% Notes, net of discount | 249.9 |  |  | 249.9 |
2.00% Convertible Notes | — |  |  | 0.4 |
Foreign credit facilities | 45.2 |  |  | 32.6 |
Capital lease obligations | 6.1 |  |  | 6.8 |
Long-term debt | $ | 1,180.2 |  |  | $ | 1,010.0 |
REVOLVING CREDIT FACILITY In the second quarter of 2011, we amended and restated the Credit Agreement dated as of January 9, 2004 (as amended and restated, the “Amended and Restated Revolving Credit Agreement” and the facility thereunder, the “Amended Revolving Credit Facility”). As of December 31, 2011, the Amended Revolving Credit Facility provided up to $86.8 million of revolving bank financing commitments through June 2013 and $235.0 million of such revolving bank financing commitments through June 30, 2016. At December 31, 2011, $293.3 million was available under the Amended Revolving Credit Facility, which reflected a reduction of $28.5 million for standby letters of credit issued against the facility. The Amended and Restated Revolving Credit Agreement, among other things, increased the aggregate commitments by approximately $79.0 million and extended the maturity of $235.0 million of the aggregate commitments to June 30, 2016. We paid debt issuance costs of $5.9 million, $1.6 million and $14.5 million associated with the amendments and restatements of our Revolving Credit Facility in 2011, 2010 and 2009, respectively. Borrowings under the Amended Revolving Credit Facility bear interest at rates based on adjusted LIBOR or an alternate base rate, plus an applicable margin. The applicable margin for LIBOR based loans for lenders who extended their maturities will be between 3.00% and 4.50%, depending upon the corporate ratings of the Company. The applicable margin for lenders who did not extend their maturities remained unchanged. Under the Amended Revolving Credit Facility, we are required to comply with financial covenants related to secured indebtedness leverage, total net leverage, and cash interest expense coverage. The Amended Revolving Credit Facility limits our ability to make certain investments, declare or pay dividends or distributions on capital stock, redeem or repurchase capital stock and certain debt obligations, incur liens, incur indebtedness, or merge, make acquisitions and sell assets. The Amended Revolving Credit Facility is secured on a first priority basis by substantially all of the assets of Holdings, AAM Inc. and each guarantor party thereto, including a pledge of all capital stock of the U.S. subsidiaries of Holdings and each guarantor and a portion of the capital stock of AAM Inc. and each guarantor's first-tier foreign subsidiaries. In addition, obligations under the Amended Revolving Credit Facility are guaranteed by Holdings and AAM Inc.'s U.S. subsidiaries, all of which are directly owned by AAM Inc. The Amended Revolving Credit Facility provides back-up liquidity for our other credit facilities. We intend to use the availability of long-term financing under the Amended Revolving Credit Facility to refinance any current maturities related to such debt agreements that are not otherwise refinanced on a long-term basis in their local markets. 9.25% NOTES In 2009, we issued $425.0 million of 9.25% senior secured notes due 2017 (9.25% Notes). The notes were issued at a discount of $5.5 million. Net proceeds from these notes were used for the repayment of certain indebtedness. In 2010 and 2009, we paid debt issuance costs of $0.3 million and $12.6 million, respectively, related to the 9.25% Notes. In the second quarter of 2011, we elected to exercise an option to redeem 10% of our 9.25% Notes outstanding at a redemption price of 103% of the principal amount. This resulted in a principal payment of $42.5 million and a $1.3 million payment for the redemption premium, as well as a payment related to accrued interest. Upon repayment, we expensed $1.4 million for the write off of a proportional amount of unamortized debt discount and issuance costs related to this debt. We had been amortizing the debt issuance costs and debt discount over the expected life of the borrowing. We have the right to voluntarily redeem an additional 10% of our 9.25% Notes in June 2012 and another 10% twelve months thereafter. The 9.25% Notes share the collateral package equally and ratably with the Amended Revolving Credit Facility as described above. The indenture governing the 9.25% Notes limits our ability to make certain investments, declare or pay dividends or distributions on capital stock, redeem or repurchase capital stock and certain debt obligations, incur liens, incur indebtedness, transact with affiliates or merge, make acquisitions and sell assets. 7.875% NOTES In 2007, we issued $300.0 million of 7.875% senior unsecured notes due 2017 (7.875% Notes). Net proceeds from these notes were used for general corporate purposes, including payment of amounts outstanding under our Revolving Credit Facility. 7.75% NOTES In the fourth quarter of 2011, we issued $200.0 million of 7.75% senior unsecured notes due 2019 (7.75% Notes). Net proceeds from these notes were used for general corporate purposes, including the repayment of certain amounts outstanding under our Revolving Credit Facility. In 2011, we paid debt issuance costs of $5.0 million related to the 7.75% Notes. 5.25% NOTES The 5.25% Notes are senior unsecured obligations due February 2014. 2.00% CONVERTIBLE NOTES The 2.00% Senior Convertible Notes due 2024 were convertible into cash under terms of the indenture. A total of $0.4 million of the notes were converted into cash in 2011. The remaining outstanding 2.00% Convertible Notes were fully redeemed in the third quarter of 2011. LEASES We lease certain facilities under capital leases expiring at various dates. The gross asset cost of our capital leases was $16.1 million at December 31, 2011 and December 31, 2010. The net book value included in property, plant and equipment, net on the balance sheet was $6.0 million and $6.6 million at December 31, 2011 and 2010, respectively. The weighted-average interest rate on these capital lease obligations at December 31, 2011 was 8.8%. We also lease certain commercial office and production facilities, vehicles and other assets under operating leases expiring at various dates. Future minimum payments under noncancelable operating leases are as follows: $5.2 million in 2012, $4.0 million in 2013, $3.5 million in 2014, $2.1 million in 2015 and $1.4 million in 2016. Our total expense relating to operating leases was $6.8 million, $5.3 million and $33.4 million in 2011, 2010 and 2009, respectively. This includes a reduction to cost of goods sold of $0.5 million and $2.3 million related to the purchase of previously idled leased assets in 2011 and 2010, respectively, and expense of $21.1 million in 2009 related to the permanent idling of leased assets. See Note 2 - Restructuring Actions for more detail on these charges. FOREIGN CREDIT FACILITIES We utilize local currency credit facilities to finance the operations of certain foreign subsidiaries. These credit facilities, some of which are guaranteed by Holdings and/or AAM, Inc., expire at various dates through January 2015. At December 31, 2011, $45.2 million was outstanding under these facilities and an additional $16.0 million was available. SECOND LIEN TERM LOAN FACILITY As part of the 2009 Settlement and Commercial Agreement with GM, we entered into certain agreements which, among other things, provided us with expedited payment terms of “net 10 days” in exchange for a 1% early payment discount and a $100.0 million Second Lien Term Loan Facility with GM through December 31, 2013. We paid $0.3 million of debt issuance costs related to the Second Lien Term Loan Facility in 2010. Pursuant to the terms of such agreements, we elected to terminate the expedited payment terms and the Second Lien Term Loan Agreement, effective June 30, 2011. As a result of these terminations, our Access and Security Agreement with GM expired on September 28, 2011. DEBT MATURITIES Aggregate maturities of long-term debt are as follows (in millions):
2012 | $ | 41.8 |
2013 | 2.7 |
2014 | 251.7 |
2015 | 0.4 |
2016 | 0.5 |
Thereafter | 883.1 |
Total | $ | 1,180.2 |
INTEREST EXPENSE AND INVESTMENT INCOME Interest expense was $83.9 million in 2011, $89.0 million in 2010 and $84.5 million in 2009. The decrease in interest expense in 2011 as compared to 2010 relates primarily to higher capitalized interest as a result of increased capital expenditures to support our significant global program launches. The increase in interest expense in 2010 as compared to 2009 primarily reflects higher interest rates and amortization of debt issuance costs. We capitalized interest of $8.3 million in 2011, $4.0 million in 2010 and $7.1 million in 2009. The weighted-average interest rate of our long-term debt outstanding at December 31, 2011 was 8.0% as compared to 8.2% and 8.3% at December 31, 2010 and 2009, respectively. The amount of accrued interest included in other accrued expenses on our Consolidated Balance Sheet was $32.0 million and $31.1 million as of December 31, 2011 and 2010, respectively. Investment income was $1.2 million in 2011, $3.8 million in 2010 and $2.0 million in 2009. Investment income includes interest and dividends earned on cash and cash equivalents and realized and unrealized gains and losses on our short-term investments during the period. In 2008, redemptions were temporarily suspended for certain money-market and other similar funds in which we invest. We recorded a gain of $0.1 million and $2.3 million in 2011 and 2010, respectively, related to distributions of our short-term investments, from which distributions were previously suspended. In 2009, we recorded an other-than-temporary impairment of $1.3 million based on the estimated fair value of our remaining investments in these funds.

X
- Details
Name: | us-gaap_LongTermDebtAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for long-term debt. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 22 -Article 5 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
Name: | us-gaap_LongTermDebtTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration