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Debt | 6 Months Ended
--- | ---
Jun. 30, 2013
Long-term Debt, Unclassified [Abstract] |
Debt | Debt The following table provides details of the carrying value of debt as of the dates indicated (in millions):
Description |  | Maturity Date |  | June 30, 2013 |  | December 31, 2012
Credit facility |  | August 22, 2016 |  | $ | 70.6 |  |  | $ | 134.0 |
4.875% senior notes |  | March 15, 2023 |  | 400.0 |  |  | — |
7.625% senior notes |  | February 1, 2017 |  | — |  |  | 150.0 |
New 4.0% Notes, $105.3 million principal amount |  | June 15, 2014 |  | 102.3 |  |  | 100.9 |
New 4.25% Notes, $97.0 million principal amount |  | December 15, 2014 |  | 93.3 |  |  | 92.1 |
Original 4.0% Notes |  | June 15, 2014 |  | 9.6 |  |  | 9.7 |
Original 4.25% Notes |  | December 15, 2014 |  | 3.0 |  |  | 3.0 |
Capital lease obligations, weighted average interest rate of 2.7% |  | In installments through March 2020 |  | 118.4 |  |  | 79.0 |
Notes payable for equipment and other debt, weighted average interest rate of 3.1% |  | In installments through May 2018 |  | 59.2 |  |  | 30.2 |
Total debt |  | $ | 856.4 |  |  | $ | 598.9 |
Less current maturities |  | (49.9 | ) |  | (52.6 | )
Long-term debt |  | $ | 806.5 |  |  | $ | 546.3 |
4.875% Senior Notes On March 18, 2013, the Company issued $400 million of 4.875% senior notes due March 15, 2023 (the “4.875% Senior Notes”) in a registered public offering. The 4.875% Senior Notes bear interest at a rate of 4.875% per annum, payable on March 15 and September 15 of each year, commencing on September 15, 2013. The 4.875% Senior Notes are senior unsecured unsubordinated obligations and rank equal in right of payment with existing and future unsubordinated debt, and rank senior in right of payment to existing and future subordinated debt. The 4.875% Senior Notes, as well as the Company's senior convertible notes described below, are effectively junior to MasTec's secured debt, including the Company's credit facility, to the extent of the value of the assets securing that debt. The 4.875% Senior Notes are guaranteed on an unsecured unsubordinated basis by MasTec's direct and indirect 100%-owned domestic subsidiaries that guarantee the Company's credit facility. The Company has the option to redeem all or a portion of the 4.875% Senior Notes at any time on or after March 15, 2018 at the redemption prices set forth in the indenture that governs the 4.875% Senior Notes (the “4.875% Senior Notes Indenture”) plus accrued and unpaid interest, if any, to the redemption date. At any time prior to March 15, 2018, the Company may redeem all or a part of the 4.875% Senior Notes at a redemption price equal to 100% of the principal amount of 4.875% Senior Notes redeemed plus an applicable premium, as defined in the 4.875% Senior Notes Indenture, together with accrued and unpaid interest, if any, to the redemption date. In addition, at any time prior to March 15, 2016, the Company may redeem up to 35% of the principal amount of the 4.875% Senior Notes using the net cash proceeds of one or more sales of the Company's capital stock, as defined in the 4.875% Senior Notes Indenture, at a redemption price of 104.875% of the principal amount, plus accrued and unpaid interest to the redemption date. The 4.875% Senior Notes Indenture, among other things, generally limits the ability of the Company and certain of its subsidiaries, subject to certain exceptions, to (i) incur additional debt and issue preferred stock, (ii) create liens, (iii) pay dividends, acquire shares of capital stock, make payments on subordinated debt or make investments, (iv) place limitations on distributions from certain subsidiaries, (v) issue guarantees, (vi) issue or sell the capital stock of certain subsidiaries, (vii) sell assets, (viii) enter into transactions with affiliates and (ix) effect mergers. The 4.875% Senior Notes Indenture provides for customary events of default, as well as customary remedies upon an event of default, as defined in the 4.875% Senior Notes Indenture, including acceleration of repayment of outstanding amounts. Approximately $7.6 million in financing costs were incurred in connection with the issuance of the 4.875% Senior Notes. These deferred financing costs are included in other long-term assets in the condensed unaudited consolidated financial statements and will be amortized over the term of the 4.875% Senior Notes using the effective interest method. The Company used a portion of the proceeds from the 4.875% Senior Notes offering to fund the repurchase and redemption of the Company's $150 million principal amount of 7.625% senior notes due 2017 (the “7.625% Senior Notes”), discussed below, and to repay the outstanding balance of the Company's credit facility. The remaining net proceeds were used for working capital and other general corporate purposes. Repurchase and Redemption of 7.625% Senior Notes On March 18, 2013, the Company repurchased approximately $121.1 million of its 7.625% Senior Notes in a tender offer at a price of 102.792% of the principal amount, which included an early tender payment of $30.00 per $1,000 principal amount of notes tendered. The holders of the tendered 7.625% Senior Notes also received accrued interest from the most recent interest payment date to, but not including, the date of repurchase. In addition, on March 29, 2013, the Company redeemed the remaining outstanding $28.9 million aggregate principal amount of the 7.625% Senior Notes in accordance with their terms at a price of 102.542% of the principal amount thereof plus accrued interest from the most recent interest payment date to, but not including, the date of redemption. A debt extinguishment loss of $5.6 million was recognized during the first quarter of 2013 in connection with the repurchase and redemption of the 7.625% Senior Notes, including $4.1 million of early payment premiums and $1.5 million of unamortized deferred financing costs. This loss is separately disclosed within the condensed unaudited consolidated statements of operations. Credit Facility As of June 30, 2013, the Company had outstanding revolving loans under its credit facility, referred to as the "Credit Facility," of $70.6 million, which accrued interest at a weighted average rate of approximately 3.04% per annum. As of December 31, 2012, the Company had outstanding revolving loans of $134.0 million, which accrued interest at a weighted average rate of approximately 3.95% per annum. Letters of credit of approximately $119.6 million and $120.8 million were outstanding under the Credit Facility as of June 30, 2013 and December 31, 2012, respectively. The remaining borrowing capacity under the Credit Facility of $409.8 million and $345.2 million as of June 30, 2013 and December 31, 2012, respectively, was available for revolving loans or up to $230.4 million and $229.2 million, respectively, of new letters of credit. Outstanding letters of credit mature at various dates and most have automatic renewal provisions, subject to prior notice of cancellation. As of June 30, 2013, interest on outstanding letters of credit accrued at either 1.125% or 2.25% per annum, based on the type of letter of credit issued. As of December 31, 2012, interest on outstanding letters of credit accrued at either 1% or 2% per annum. The unused facility fee was 0.40% and 0.35% as of June 30, 2013 and December 31, 2012, respectively. Senior Convertible Notes New Senior Convertible Notes. The Company has $105.3 million of New 4.0% Notes and $97.0 million of New 4.25% Notes. The principal balance of the New Convertible Notes was divided between the fair value of the debt component and the fair value of the common stock conversion feature of the notes, which resulted in a total debt discount of $17.4 million as of March 2011, when the New Convertible Notes were issued. The debt discount is being accreted to interest expense over the remaining terms of the New Convertible Notes, which will increas e interest expense during the terms of the New Convertible Notes above their 4.0% and 4.25% cash interest rates to an effective interest rate of 6.73%. As of June 30, 2013, the remaining period of amortization associated with the debt discount and related financing costs was approximately 1.2 years. The fair value of the common stock conversion feature is recorded as a component of shareholders’ equity. The carrying values of the debt and equity components of the New Convertible Notes as of the dates indicated are as follows (in millions):
| June 30, 2013 |  | December 31, 2012
| New 4.0% Senior Convertible Notes |  | New 4.25% Senior Convertible Notes |  | New 4.0% Senior Convertible Notes |  | New 4.25% Senior Convertible Notes
Principal amount | $ | 105.3 |  |  | $ | 97.0 |  |  | $ | 105.3 |  |  | $ | 97.0 |
Unamortized debt discount and financing costs | (3.0 | ) |  | (3.7 | ) |  | (4.4 | ) |  | (4.9 | )
Net carrying amount of debt component | $ | 102.3 |  |  | $ | 93.3 |  |  | $ | 100.9 |  |  | $ | 92.1 |
Carrying amount of equity component | $ | 8.9 |  |  | $ | 8.5 |  |  | $ | 8.9 |  |  | $ | 8.5 |
See Note 2 - Earnings Per Share for details regarding the value of the premium over the principal amount of the New Convertible Notes. Debt Guarantees and Covenants The Company’s New Convertible Notes and Original Convertible Notes are, and, through March 29, 2013, the Company's 7.625% Senior Notes were, fully and unconditionally guaranteed on an unsecured, unsubordinated, joint and several basis by certain of the Company's existing and future 100%-owned direct and indirect domestic subsidiaries that are guarantors of the Company's Credit Facility or other outstanding indebtedness. The Company's 4.875% Senior Notes are guaranteed on an unsecured, unsubordinated, joint and several basis by the Company's 100%-owned domestic subsidiaries that guarantee the Credit Facility. See Note 20 - Supplemental Guarantor Condensed Unaudited Consolidating Financial Information. MasTec was in compliance with all provisions and covenants pertaining to its outstanding debt instruments as of June 30, 2013 and December 31, 2012. Interest Expense, Net The following table provides details of interest expense, net, classified within continuing operations for the periods indicated (in millions):
| For the Three Months Ended June 30, |  | For the Six Months Ended June 30,
| 2013 |  | 2012 |  | 2013 |  | 2012
Interest expense: |  |  |  |  |  |  |
Contractual and other interest expense | $ | 9.2 |  |  | $ | 7.1 |  |  | $ | 16.8 |  |  | $ | 13.5 |
Accretion of senior convertible note discount | 1.3 |  |  | 1.2 |  |  | 2.6 |  |  | 2.4 |
Amortization of deferred financing costs and commitment fees | 1.4 |  |  | 1.3 |  |  | 2.7 |  |  | 2.7 |
Total interest expense | $ | 11.9 |  |  | $ | 9.6 |  |  | $ | 22.1 |  |  | $ | 18.6 |
Interest income | (0.1 | ) |  | (0.1 | ) |  | (0.2 | ) |  | (0.2 | )
Interest expense, net | $ | 11.8 |  |  | $ | 9.5 |  |  | $ | 21.9 |  |  | $ | 18.4 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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