Indebtedness

Indebtedness consisted of the following at December 31, 2013 and 2012 (in millions):



	December 31, 2013			December 31, 2012
1¹/4% Convertible senior subordinated notes due 2036	$	201.2		$	192.1
4½% Senior term loan due 2016	275.0			264.2
5⁷/8% Senior notes due 2021	300.0			300.0
Credit facility, expires 2016	360.0			465.0
Other long-term debt	114.0			65.5
	1,250.2			1,286.8
Less: Current portion of long-term debt	(110.5		)	(59.1		)
1¹/4% Convertible senior subordinated notes due 2036	(201.2		)	(192.1		)
Total indebtedness, less current portion	$	938.5		$	1,035.6

At December 31, 2013, the aggregate scheduled maturities of long-term debt, excluding the current portion of long-term debt, are as follows (in millions):



2015	$	44.5
2016	576.6
2017	1.3
2018	0.3
Thereafter	315.8
	$	938.5

Convertible senior subordinated notes

The following table sets forth as of December 31, 2013 and 2012 the carrying amount of the equity component, the principal amount of the liability component, the unamortized discount and the net carrying amount of the Company’s 1¹/4% convertible senior subordinated notes (in millions):



	December 31,
	2013		2012
1¼% Convertible senior subordinated notes due 2036:
Carrying amount of the equity component	$	54.3	$	54.3

Principal amount of the liability component	$	201.2	$	201.3
Less: unamortized discount	—		(9.2		)
Net carrying amount	$	201.2	$	192.1

The following table sets forth the interest expense recognized for the years ended December 31, 2013, 2012 and 2011 relating to both the contractual interest coupon and the amortization of the discount on the liability component for the Company’s former 1³/4% convertible senior subordinated notes and the 1¹/4% convertible senior subordinated notes (in millions):



	Years Ended December 31,
	2013		2012		2011
1¾% Convertible senior subordinated notes:
Interest expense	$	—	$	—	$	0.9
1¼% Convertible senior subordinated notes:
Interest expense	$	11.7	$	11.2	$	10.7

The effective interest rate on the liability component for the 1¹/4% convertible senior subordinated notes for each of the years ended December 31, 2013, 2012 and 2011 was 6.1%. The unamortized discount for the 1¹/4% convertible senior subordinated notes was amortized through December 2013, as this was the earliest date that the notes’ holders could require the Company to repurchase the notes.

Cash payments for interest were approximately $66.4 million, $70.0 million and $47.1 million for the years ended December 31, 2013, 2012 and 2011, respectively.

The Company’s 1¹/4% convertible senior subordinated notes, due December 15, 2036, were issued in December 2006 and provided for the settlement upon conversion in cash up to the principal amount of the notes with any excess conversion value settled in shares of the Company’s common stock. Interest is payable on the notes at 1¹/4% per annum, payable semi-annually in arrears in cash on June 15 and December 15 of each year. The notes are convertible into shares of the Company’s common stock at an effective price of $40.44 per share, subject to adjustment, including to reflect the impact to the conversion rate upon payment of any dividends to the Company’s stockholders. The current effective price reflects a conversion rate for the notes of 24.7268 shares of common stock per $1,000 principal amount of notes.

The notes contain certain anti-dilution provisions designed to protect the holders’ interests. If a change of control transaction that qualified as a “fundamental change” occurred on or prior to December 15, 2013, under certain circumstances the Company increased the conversion rate for the notes converted in connection with the transaction by a number of additional shares (as used in this paragraph, the “make whole shares”). A fundamental change is any transaction or event in connection with which 50% or more of the Company’s common stock is exchanged for, converted into, acquired for or constitutes solely the right to receive consideration that is not at least 90% common stock listed on a U.S. national securities exchange, or approved for quotation on an automated quotation system. The amount of the increase in the conversion rate would have depended on the effective date of the transaction and an average price per share of the Company’s common stock as of the effective date. No adjustment to the conversion rate would have been made if the price per share of common stock is less than $31.33 per share or more than $180.00 per share. The number of additional make whole shares range from 7.3658 shares per $1,000 principal amount at $31.33 per share to 0.0000 shares per $1,000 principal amount at $180.00 per share for the year ended December 15, 2013. If the acquirer or certain of its affiliates in the fundamental change transaction had publicly traded common stock, the Company would, instead of increasing the conversion rate as described above, cause the notes to become convertible into publicly traded common stock of the acquirer, with principal of the notes to be repaid in cash, and the balance, if any, payable in shares of such acquirer common stock. At no time will the Company issue an aggregate number of shares of the Company’s common stock upon conversion of the notes in excess of 31.9183 shares per $1,000 principal amount thereof. If the holders of the Company’s common stock receive only cash in a fundamental change transaction, then holders of the notes will receive cash as well. Holders may convert the notes only under the following circumstances: (1) during any fiscal quarter, if the closing sales price of the Company’s common stock exceeds 120% of the conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter; (2) during the five business day period after a five consecutive trading day period in which the trading price per note for each day of that period was less than 98% of the product of the closing sale price of the Company’s common stock and the conversion rate; (3) if the notes have been called for redemption; or (4) upon the occurrence of certain corporate transactions. Beginning December 19, 2013, the Company could redeem any of the notes at a redemption price of 100% of their principal amount, plus accrued interest, as well as settle any excess conversion value with shares of the Company’s common stock. Holders of the notes may require the Company to repurchase the notes at a repurchase price of 100% of their principal amount, plus accrued interest, on December 15, 2016, 2021, 2026 and 2031. Holders may also require the Company to repurchase all or a portion of the notes upon a fundamental change, as defined in the indenture, at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus any accrued and unpaid interest. The notes are senior subordinated obligations and are subordinated to all of the Company’s existing and future senior indebtedness and effectively subordinated to all debt and other liabilities of the Company’s subsidiaries.

Holders of the Company’s 1¹/4% convertible senior subordinated notes had the right to require the Company to repurchase the notes at a repurchase price of 100% of their principal amount, plus any interest, on December 15, 2013. No notes were tendered for repurchase. In addition, holders may convert the notes if, during any fiscal quarter, the closing sales price of the Company’s common stock exceeds 120% of the conversion price of $40.44 per share for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter. As of December 31, 2013, the closing sales price of the Company’s common stock had exceeded 120% of the conversion price of the 1¹/4% convertible senior subordinated notes for at least 20 trading days in the 30 consecutive trading days ending December 31, 2013, and, therefore, the holders of the notes may convert the notes during the three months ending March 31, 2014. Due to the ability of the holders of the notes to convert the notes during the three months ending March 31, 2014, the Company classified the notes as a current liability as of December 31, 2013. As of December 31, 2012, the Company classified the notes as a current liability due to the redemption feature of the notes. The Company classified approximately $9.2 million of the equity component of the 1¹/4% convertible senior subordinated notes as “Temporary equity” as of December 31, 2012. The amount classified as “Temporary equity” was measured as the excess of (i) the amount of cash that would be required to be paid upon conversion over (ii) the current carrying amount of the liability-classified component. As of December 31, 2013, the amount of principal cash required to be repaid upon conversion of the 1¹/4% convertible senior subordinated notes was equivalent to the carrying amount of the liability-classified component. Future classification of the notes between current liabilities and long-term debt will be dependent on the closing sales price of the Company’s common stock during future quarters, until the fourth quarter of 2015.

During the year ended December 31, 2013, holders of the Company’s 1¹/4% convertible senior subordinated notes converted less than $0.1 million of principal amount of the notes. The Company issued 286 shares of its common stock associated with the less than $0.1 million excess conversion value of the notes. The Company reflected the repayment of the principal of the notes totaling less than $0.1 million within “Conversion of convertible senior subordinated notes” within the Company’s Consolidated Statements of Cash Flows for the year ended December 31, 2013. During 2011, holders of the Company’s former 1³/4% convertible senior subordinated notes converted approximately $161.0 million of principal amount of the notes. The Company issued 3,926,574 shares of its common stock associated with the $195.9 million excess conversion value of the notes. The Company reflected the repayment of the principal of the notes totaling $161.0 million within “Conversion of convertible senior subordinated notes” within the Company’s Consolidated Statement of Cash Flows for the year ended December 31, 2011.

Subsequent to December 31, 2013, holders of the Company’s 1¹/4% convertible senior subordinated notes converted approximately $49.6 million of principal amount of the notes. The Company issued 377,957 shares of its common stock associated with the $21.9 million excess conversion value of the notes.

4 ¹/2% Senior term loan

The Company’s €200.0 million (or approximately $275.0 million) 4¹/2% senior term loan with Rabobank is due May 2, 2016. The Company has the ability to prepay the term loan before its maturity date. Interest is payable on the term loan at 4¹/2% per annum, payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year. The term loan contains covenants restricting, among other things, the incurrence of indebtedness and the making of certain payments, including dividends, and is subject to acceleration in the event of default. The Company also has to fulfill financial covenants with respect to a total debt to EBITDA ratio and an interest coverage ratio.

5 ⁷/8% Senior notes

The Company’s $300.0 million of 5⁷/8% senior notes due 2021 constitute senior unsecured and unsubordinated indebtedness. Interest is payable on the notes semi-annually in arrears on June 1 and December 1 of each year. At any time prior to September 1, 2021, the Company may redeem the notes, in whole or in part from time to time, at its option, at a redemption price equal to the greater of (i) 100% of the principal amount plus accrued and unpaid interest, including additional interest, if any, to, but excluding, the redemption date or (ii) the sum of the present values of the remaining scheduled payments of principal and interest (exclusive of interest accrued to the date of redemption) discounted to the redemption date at the treasury rate plus 0.5%, plus accrued and unpaid interest, including additional interest, if any. Beginning September 1, 2021, the Company may redeem the notes, in whole or in part from time to time, at its option, at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest, including additional interest, if any.

Credit facility

The Company’s revolving credit and term loan facility consists of a $600.0 million multi-currency revolving credit facility and a $360.0 million term loan facility. The maturity date of the Company’s credit facility is December 1, 2016. The Company is required to make quarterly payments towards the term loan of $5.0 million that will increase to $10.0 million commencing March 2015. Interest accrues on amounts outstanding under the credit facility, at the Company’s option, at either (1) LIBOR plus a margin ranging from 1.0% to 2.0% based on the Company’s leverage ratio, or (2) the base rate, which is equal to the higher of (i) the administrative agent’s base lending rate for the applicable currency, (ii) the federal funds rate plus 0.5%, and (iii) one-month LIBOR for loans denominated in U.S. dollars plus 1.0% plus a margin ranging from 0.0% to 0.5% based on the Company’s leverage ratio. The credit facility contains covenants restricting, among other things, the incurrence of indebtedness and the making of certain payments, including dividends, and is subject to acceleration in the event of a default. The Company also has to fulfill financial covenants with respect to a total debt to EBITDA ratio and an interest coverage ratio. As of December 31, 2013, the Company had $360.0 million of outstanding borrowings under the credit facility and availability to borrow approximately $600.0 million. As of December 31, 2012, the Company had $465.0 million of outstanding borrowings under the credit facility and availability to borrow approximately $515.0 million.

Standby letters of credit and similar instruments

The Company has arrangements with various banks to issue standby letters of credit or similar instruments, which guarantee the Company’s obligations for the purchase or sale of certain inventories and for potential claims exposure for insurance coverage. At December 31, 2013 and 2012, outstanding letters of credit totaled $16.7 million and $15.8 million, respectively.