XML 43 R25.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Debt | 12 Months Ended
--- | ---
Dec. 31, 2013
Debt Disclosure [Abstract] |
DEBT | DEBT The current and non-current portions of long-term debt and capital lease obligations at December 31, 2013 and December 31, 2012 are as follows (in thousands):
| December 31, 2013 |  | December 31, 2012
| Current |  | Non-Current |  | Current |  | Non-Current
3.25% Convertible Senior Notes due 2028 | $ | — |  |  | $ | 5,334 |  |  | $ | 48,081 |  |  | $ | — |
7.875% Senior Notes due 2021 | — |  |  | 300,000 |  |  | — |  |  | — |
Capital lease obligations | 2,505 |  |  | 796 |  |  | 7,902 |  |  | 3,460 |
| $ | 2,505 |  |  | $ | 306,130 |  |  | $ | 55,983 |  |  | $ | 3,460 |
Minimum future lease payments under capital and operating leases with terms longer than one year are $8.2 million in 2014, $5.1 million in 2015, $1.6 million in 2016, $0.8 million in 2017, $0.8 million in 2018, and $3.3 million thereafter. 3.25% Convertible Senior Notes due 2028 Per the indenture governing the 3.25% Convertible Senior Notes due 2028 (the “Convertible Notes”), the Company announced on February 13, 2013 that it was offering to repurchase all of its outstanding 3.25% Convertible Senior Notes due 2028. As of February 12, 2013, there was $48.7 million aggregate principal amount of Convertible Notes outstanding. The Company repurchased $43.3 million in aggregate principal amount, leaving a balance of $5.3 million as of December 31, 2013. 7.875% Senior Notes due 2021 On January 29, 2013, the Company completed an offering of $300 million in aggregate principal amount of 7.875% Senior Notes due 2021 (the “Notes”) in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The Company commenced an exchange offer for the Notes on September 30, 2013 to exchange the Notes for freely transferable notes containing substantially similar terms, in accordance with the registration rights granted to the holders of the Notes when they were issued. The exchange offer was consummated on November 5, 2013. Revolving Credit Facility On August 1, 2012, Coeur Alaska, Inc. and Coeur Rochester, Inc. (the “Borrowers”), each a wholly-owned subsidiary of the Company, entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, the Borrowers, the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent. The Credit Agreement provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of up to $100.0 million, which principal amount may be increased, subject to receiving additional commitments therefor, by up to $50.0 million. The unused line fee for the twelve months ended December 31, 2013 and 2012, respectively, was $0.6 million and $0.2 million, charged to interest expense. On January 16, 2014, the Company and the Borrowers entered into that certain Amendment No. 1 to Credit Agreement (the “Amendment”) to amend the Credit Agreement. Pursuant to the Amendment, among other things, the pricing of loans and undrawn commitments under the Credit Agreement was modified and certain modifications were made to the financial covenants and negative covenant provisions under the Credit Agreement. The term of the Revolving Credit Facility is four years. Amounts may be borrowed under the Revolving Credit Facility to finance working capital and general corporate purposes of the Company and its subsidiaries, including the payment of fees and expenses incurred in connection with the Revolving Credit Facility. The obligations under the Revolving Credit Facility will be secured by substantially all of the assets of the Company and its domestic subsidiaries, including the land, mineral rights and infrastructure at the Kensington and Rochester mines, as well as a pledge of the shares of certain of the Company's subsidiaries. Borrowings under the Revolving Credit Facility, as amended by the Amendment, bear interest at a rate selected by the Borrowers equal to either LIBOR plus a margin of 2.25% to 4.00% or an alternate base rate plus a margin of 1.25% to 3.00%, with the margin determined by reference to the Company's ratio of consolidated debt to adjusted EBITDA. Voluntary prepayments of the loans and voluntary reductions of the unutilized portion of the commitments under the Revolving Credit Facility are permitted without prepayment premium or penalty, subject to payment of customary LIBOR breakage costs. Amounts so repaid may be re-borrowed subject to customary requirements. The Revolving Credit Facility, as amended by the Amendment, contains representations and warranties, events of default and affirmative and negative covenants that are usual and customary, including covenants that, among other things, restrict the ability of the Company and its subsidiaries to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, engage in asset sales and make dividends and distributions and share repurchases. The Revolving Credit Facility, as amended by the Amendment, also contains financial covenants that require (i) the ratio of consolidated debt to adjusted EBITDA to be not greater than 3.25 to 1.00 for the quarter ended December 31, 2013 and not greater than 4.75 to 1.00 for any fiscal quarter ending after October 1, 2015 (for quarters ending between January 1, 2014 to September 30, 2015, the ratio of consolidated debt to adjusted EBITDA will not be tested), (ii) the ratio of adjusted EBITDA to interest expense to be not less than 3.00 to 1.00 for fiscal quarters ending between October 1, 2013 and June 30, 2014, after which the ratio may not be less than (a) 2.75 to 1.00 for the quarter ending September 30, 2014, (b) 1.50 to 1.00 for the quarters ended December 31, 2014 and March 31, 2015, (c) 2.00 to 1.00 for the quarter ending June 30, 2015, (d) 2.75 to 1.00 for the quarters ending September 30, 2015 and December 31, 2015 and (e) 3.00 to 1.00 for any quarter ending after January 1, 2016, (iii) the tangible net worth to be not less than the greater of (a) $900 million and (b)(1) for quarters ending between October 1, 2013 and September 30, 2014, 85% of our tangible net worth as of the fiscal year ending December 31, 2013 and (2) for quarters ending thereafter, 85% of the tangible net worth as of December 31 of the previous fiscal year plus 25% of net income, if positive, for the period after December 31 of such previous fiscal year to the date of measurement, or minus any net losses with limits of $50 million on any net losses in any fiscal year, (iv) minimum adjusted EBITDA to be at least $100 million for the most recently ended four fiscal quarter period for quarters ending between January 1, 2014 and September 30, 2014, after which minimum adjusted EBITDA must be at least (a) $50 million for the fiscal quarters ending December 31, 2014 and March 31, 2015, (b) $75 million for the fiscal quarter ending June 30, 2015, (c) $100 million for the fiscal quarters ending September 30, 2015 and December 31, 2015 and (d) $110 million for any fiscal quarter after January 1, 2016, (v) the ratio of consolidated secured debt to adjusted EBITDA, tested quarterly, to be not greater than 1.25 to 1.00, and (vi) the minimum cash balance, tested quarterly, to be not less than $50 million. The Amendment further restricted the Company's ability to pay dividends and make share repurchases for so long as the ratio of consolidated debt to adjusted EBITDA is greater than 3.00 to 1.00. The Company was in compliance with all covenants under the Revolving Credit Facility as of December 31, 2013. As of December 31, 2013, no amounts were outstanding under the Revolving Credit Facility. Lines of Credit At December 31, 2013, Manquiri had two outstanding lines of credit supporting value added tax recoveries in Bolivia. The lines are held with Banco Bisa, $7.0 million bearing interest at 2.75% per annum, and Banco de Crédito, $4.0 million bearing interest at 2.5% per annum. There was no balance outstanding on the two lines of credit at December 31, 2013 and December 31, 2012, respectively. Kensington Term Facility On August 16, 2012, Coeur Alaska repaid all obligations and indebtedness outstanding under the Coeur Alaska, Inc. Term Facility Agreement, as amended and restated on December 20, 2010, with Credit Suisse AG (the "Kensington Term Facility"), which totaled approximately $68.6 million and resulted in a $1.0 million loss on the debt extinguishment in 2012. Upon payment in full, the Kensington Term Facility was terminated and all of the liens granted under the Kensington Term Facility were released. As a condition to the Kensington Term Facility with Credit Suisse, the Company agreed to enter into a gold hedging program which protects a minimum of 243,750 ounces of gold production over the life of the term facility against the risk associated with fluctuations in the market price of gold. This program consists of a series of zero cost collars which consist of a floor price and a ceiling price of gold. Coeur Alaska has transferred these hedge positions to Wells Fargo Bank, N.A., as hedge provider. Call options protecting 97,000 ounces of gold were outstanding at December 31, 2012. The weighted average strike price of the call options was $1,968. Put options protecting 122,000 ounces of gold were outstanding at December 31, 2012. The weighted average strike price of the put options was $968. During the year ended December 31, 2013, the Company unwound the gold hedging program. Palmarejo Gold Production Royalty Obligation On January 21, 2009, Coeur Mexicana entered into a gold production royalty transaction with Franco-Nevada Corporation under which Franco-Nevada purchased a royalty covering 50% of the life of mine gold to be produced from its Palmarejo silver and gold mine in Mexico. The royalty agreement provides for a minimum obligation to be paid monthly on a total of 400,000 ounces of gold, or 4,167 ounces per month over an initial eight year period. Each monthly payment is an amount equal to the greater of 4,167 ounces of gold or 50% of actual gold production multiplied by the excess of the monthly average market price of gold above $400 per ounce, subject to a 1% annual inflation compounding adjustment commencing January 21, 2013. As of December 31, 2013, payments had been made on a total of 259,069 ounces of gold with further payments to be made on an additional 140,931 ounces of gold. After payments have been made on a total of 400,000 ounces of gold, the royalty obligation is payable in the amount of 50% of actual gold production per month multiplied by the excess of the monthly average market price of gold above $400 per ounce, adjusted as described above. Payments under the royalty agreement are to be made in cash or gold bullion. During the years ended December 31, 2013 and 2012, the Company paid $57.0 million and $74.7 million, respectively, in royalty payments to Franco-Nevada Corporation. Payments made during the minimum obligation period will result in a reduction to the remaining minimum obligation. Payments made beyond the minimum obligation period will be recognized in operating expenses. The Company used an implicit interest rate of 30.0% to discount the original obligation, based on the fair value of the consideration received projected over the expected future cash flows at inception of the obligation. The discounted obligation is accreted to its expected future value over the expected minimum payment period based on the implicit interest rate. The Company recognized accretion expense for the years ended December 31, 2013, 2012, and 2011 of $17.6 million, $19.1 million, and $22.2 million respectively. As of December 31, 2013 and 2012, the remaining minimum obligation under the royalty agreement was $51.2 million and $61.9 million, respectively. Interest Expense Interest expense is made up of the following (in thousands):
| Years Ended December 31,
| 2013 |  | 2012 |  | 2011
| (in thousands)
3.25% Convertible Senior Notes due 2028 | $ | 466 |  |  | $ | 1,581 |  |  | $ | 1,581 |
7.875 % Senior Notes due 2021 | 21,853 |  |  | — |  |  | — |
Revolving Credit Facility | 612 |  |  | 213 |  |  | — |
1.25% Convertible Senior Notes due 2024 (terminated in 2011) | — |  |  | — |  |  | 1 |
Senior Term Notes (terminated in 2011) | — |  |  | — |  |  | 1,381 |
Kensington Term Facility (terminated in 2012) | — |  |  | 2,339 |  |  | 4,383 |
Capital lease obligations | 415 |  |  | 997 |  |  | 1,620 |
Other debt obligations | 291 |  |  | 881 |  |  | 1,379 |
Accretion of Franco Nevada royalty obligation | 17,641 |  |  | 19,139 |  |  | 22,230 |
Amortization of debt issuance costs | 2,143 |  |  | 1,146 |  |  | 2,050 |
Accretion of debt discount | 576 |  |  | 2,536 |  |  | 2,324 |
Capitalized interest | (2,694 | ) |  | (2,663 | ) |  | (2,175 | )
Total interest expense, net of capitalized interest | $ | 41,303 |  |  | $ | 26,169 |  |  | $ | 34,774 |

X
- Definition The entire disclosure for debt and capital lease obligations can be reported. 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. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References No definition available. + Details
Name: | us-gaap_DebtAndCapitalLeasesDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

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