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Long-Term Debt | 12 Months Ended
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Dec. 31, 2012
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,
| 2012 |  | 2011
| (in millions)
Amended Revolving Credit Facility | $ | — |  |  | $ | — |
9.25% Notes, net of discount | 337.5 |  |  | 379.0 |
7.875% Notes | 300.0 |  |  | 300.0 |
7.75% Notes | 200.0 |  |  | 200.0 |
6.625% Notes | 550.0 |  |  | — |
5.25% Notes, net of discount | — |  |  | 249.9 |
Foreign credit facilities | 61.0 |  |  | 45.2 |
Capital lease obligations | 5.6 |  |  | 6.1 |
Long-term debt | $ | 1,454.1 |  |  | $ | 1,180.2 |
AMENDED REVOLVING CREDIT FACILITY On August 31, 2012, 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, 2012, the Amended Revolving Credit Facility provided up to $72.8 million of revolving bank financing commitments through June 2013 and $365.0 million of revolving bank financing commitments through June 30, 2016. At December 31, 2012, $414.6 million was available under the Amended Revolving Credit Facility, which reflected a reduction of $23.2 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 $116.0 million and increased the commitments maturing on June 30, 2016 (the class D facility) to $365.0 million. The class D facility includes loans held by lenders that agreed to extend and/or increase their respective commitments and new lenders to the facility. The Amended and Restated Revolving Credit Agreement also includes a class C loan facility of approximately $72.8 million, which matures on June 30, 2013. We expensed $0.3 million for the write-off of a proportionate amount of unamortized debt issuance costs related to the class C facility. We had been amortizing the debt issuance costs over the expected life of the borrowing. We paid debt issuance costs of $1.7 million, $5.9 million and $1.6 million associated with the amendments and restatements of our Revolving Credit Facility in 2012, 2011 and 2010, 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 the class C and class D facilities remains unchanged. Under the Amended Revolving Credit Facility, certain negative covenants were revised to provide increased flexibility. In the event AAM achieves investment grade corporate credit ratings from S&P and Moody's, AAM may elect to release all of the collateral from the liens granted pursuant to the Collateral Agreement, subject to notice requirements and other conditions. The Amended Revolving Credit Facility is secured on a first priority basis by all or substantially all of the assets of AAM and each guarantor under the Collateral Agreement dated as of November 7, 2008, as amended and restated as of December 18, 2009 and as further amended on June 30, 2011, among AAM and its domestic subsidiaries and JPMorgan Chase Bank, N.A., as collateral agent for the lenders under the Amended and Restated Revolving Credit Agreement and the secured noteholders under the Indenture dated as of December 18, 2009, among AAM, as issuer, the guarantors and U.S. Bank National Association, as trustee. The Amended Revolving Credit Facility provides back-up liquidity for our foreign 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, we paid debt issuance costs of $0.3 million related to the 9.25% Notes. In 2012 and 2011, we elected to exercise an option to redeem 10% of the original amount of our 9.25% Notes outstanding at a redemption price of 103% of the principal amount. This resulted in principal payments of $42.5 million and $1.3 million for the redemption premiums, as well as payments of accrued interest in both 2012 and 2011. We expensed $1.0 million in 2012 and $1.4 million in 2011 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 discount and debt issuance costs over the expected life of the borrowing. Pursuant to the terms of our 9.25% Notes, we have the right to voluntarily redeem an additional 10% in October 2013. In addition, we have the right to redeem any remaining 9.25% Notes outstanding in January 2014. 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. Pursuant to the terms of our 7.875% Notes, we may voluntarily redeem any or all of the outstanding 7.875% Notes at any time. 7.75% NOTES In 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. 6.625% NOTES In the third quarter of 2012, we issued $550.0 million of 6.625% senior unsecured notes due 2022 (6.625% Notes). Concurrently with the offering of the 6.625% Notes, we made a tender offer to purchase our 5.25% Notes, of which the aggregate principal amount outstanding at the time of the tender offer was $250.0 million. Net proceeds from the 6.625% Notes were used to fund the purchase of $137.8 million of the outstanding 5.25% Notes pursuant to the tender offer, certain pension obligations and for other general corporate purposes. We also used the net proceeds to fund the redemption of the remaining 5.25% Notes, including the payment of interest, and to redeem $42.5 million aggregate principal amount of our 9.25% Notes. We paid debt issuance costs of $8.9 million related to the 6.625% Notes in 2012. 5.25% NOTES On September 18, 2012, in connection with the cash tender offer, we purchased $137.8 million aggregate principal amount of the 5.25% Notes, and paid accrued interest. Upon purchase, we expensed $9.2 million related to a tender premium, $0.5 million of professional fees and unamortized debt issuance costs of $0.1 million related to this debt. We had been amortizing the debt issuance costs over the expected life of the borrowing. On October 3, 2012, we voluntarily redeemed the remaining 5.25% Notes outstanding. This resulted in a principal payment of $112.2 million, a payment of $7.3 million related to a make-whole premium, as well as payment of accrued interest. Upon redemption, we expensed $0.1 million of unamortized debt discount and issuance costs related to this debt. We had been amortizing the debt issuance costs over the expected life of the borrowing. LEASES We lease certain facilities under capital leases expiring at various dates. The gross asset cost of our capital leases was $6.7 million at December 31, 2012 and $16.1 million at December 31, 2011. The net book value included in property, plant and equipment, net on the balance sheet was $5.6 million and $6.0 million at December 31, 2012 and 2011, respectively. The weighted-average interest rate on these capital lease obligations at December 31, 2012 was 8.9%. We also lease certain manufacturing machinery and equipment, commercial office and production facilities, vehicles and other assets under operating leases expiring at various dates. In the fourth quarter of 2012, we entered into a sale-leaseback transaction for $13.2 million of equipment to be used in production starting in 2013. We received proceeds of $12.1 million in 2012 as a result of this transaction. Future minimum payments under noncancelable operating leases are as follows: $9.6 million in 2013, $8.3 million in 2014, $7.1 million in 2015, $5.8 million in 2016 and $4.1 million in 2017. Our total expense relating to operating leases was $9.0 million, $6.8 million and $5.3 million in 2012, 2011 and 2010, 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. 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, 2012, $61.0 million was outstanding under these facilities and an additional $15.1 million was available. DEBT MATURITIES Aggregate maturities of long-term debt are as follows (in millions):
2013 | $ | 55.5 |
2014 | 2.4 |
2015 | 4.2 |
2016 | 0.4 |
2017 | 638.0 |
Thereafter | 753.6 |
Total | $ | 1,454.1 |
INTEREST EXPENSE AND INVESTMENT INCOME Interest expense was $101.6 million in 2012, $83.9 million in 2011 and $89.0 million in 2010. The increase in interest expense in 2012 reflects higher average outstanding borrowings as compared to 2011. 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. We capitalized interest of $8.2 million in 2012, $8.3 million in 2011 and $4.0 million in 2010. The weighted-average interest rate of our long-term debt outstanding at December 31, 2012 was 7.9% as compared to 8.0% and 8.2% at December 31, 2011 and 2010, respectively. The amount of accrued interest included in other accrued expenses on our Consolidated Balance Sheet was $35.1 million and $32.0 million as of December 31, 2012 and 2011, respectively. Investment income was $0.6 million in 2012, $1.2 million in 2011 and $3.8 million in 2010. 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.

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- Definition The entire disclosure for long-term debt. + References Reference 1: 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 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 22 -Article 5 + Details
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