INDEBTEDNESS

Indebtedness consisted of the following at September 30, 2014 and December 31, 2013 (in millions):



	September 30, 2014			December 31, 2013
1¹/4% Convertible senior subordinated notes due 2036	$	—		$	201.2
4¹/₂% Senior term loan due 2016	252.6			275.0
5⁷/8% Senior notes due 2021	300.0			300.0
Credit facility, expiring 2019	735.0			360.0
Other long-term debt	133.6			114.0
	1,421.2			1,250.2
Less: Current portion of long-term debt	(88.4		)	(110.5		)
1¹/4% Convertible senior subordinated notes due 2036	—			(201.2		)
Total indebtedness, less current portion	$	1,332.8		$	938.5

Convertible Senior Subordinated Notes

The Company’s 1¹/4% convertible senior subordinated notes, due December 15, 2036, were issued in December 2006 and provided for (i) 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, and (ii) the conversion rate to be increased under certain circumstances if the notes were converted in connection with certain change of control transactions occurring prior to December 15, 2013. The notes were unsecured obligations and were convertible into cash and shares of the Company’s common stock upon satisfaction of certain conditions. Interest was 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. Holders of the Company’s 1¼% convertible senior subordinated notes had the ability to convert the notes if, during any fiscal quarter, the closing sales price of the Company’s common stock exceeded 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. The notes were convertible into shares of the Company’s common stock at an effective price of $40.27 per share as of June 30, 2014, subject to adjustment, including to reflect the impact to the conversion rate upon payment of any dividends to the Company’s stockholders. The effective price reflected a conversion rate for the notes of 24.8295 shares of common stock per $1,000 principal amount of notes.

The carrying amount of the equity component of the Company’s 1¹/4% convertible senior subordinated notes was $54.3 million as of December 31, 2013. The discount on the liability component of the notes was fully amortized as of December 31, 2013. The interest expense recognized relating to the contractual interest coupon of the 1¹/4% convertible senior subordinated notes was approximately $0.9 million for the nine months ended September 30, 2014. The interest expense recognized relating to the contractual interest coupon and the amortization of the discount on the liability component of the notes was approximately $2.9 million and $8.8 million for the three and nine months ended September 30, 2013, respectively. The effective interest rate on the liability component for the 1¹/4% convertible senior subordinated notes for the nine months ended September 30, 2013 was 6.1%.

During 2014, holders of the Company’s 1¹/4% convertible senior subordinated notes converted or the Company repurchased approximately $49.7 million of aggregate principal amount of the notes. In May 2014, the Company announced its election to redeem the remaining $151.5 million balance of the notes with a redemption date of June 20, 2014. Substantially all of the holders of the Company’s notes elected to convert their remaining notes prior to the redemption date. During the nine months ended September 30, 2014, the Company issued a total of 1,437,465 shares of its common stock associated with the $81.0 million excess conversion value of all notes converted. The Company reflected the repayment of the principal of the notes totaling $201.2 million within “Repurchase or conversion of convertible senior subordinated notes” within the Company’s Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 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.

4 ¹/2% Senior Term Loan

The Company’s €200.0 million (or approximately $252.6 million as of September 30, 2014) 4¹/2% senior term loan with Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (“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 December 1, 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 an $800.0 million multi-currency revolving credit facility and a $355.0 million term loan facility. The maturity date of the Company’s credit facility is June 28, 2019 and the Company is not required to make quarterly payments towards the term loan facility. 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 US 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 September 30, 2014, the Company had $735.0 million of outstanding borrowings under the credit facility and availability to borrow approximately $420.0 million. As of December 31, 2013, the Company had $360.0 million of outstanding borrowings under its credit facility and availability to borrow approximately $600.0 million. The Company amended and restated its current credit facility agreement on June 30, 2014 to increase its multi-currency revolving credit facility from $600.0 million to $800.0 million and to maintain its $355.0 million term loan facility.

The carrying amounts of long-term debt under the Company’s 4¹/2% senior term loan and credit facility approximate their fair values based on the borrowing rates currently available to the Company for loans with similar terms and average maturities. At September 30, 2014, the estimated fair value of the Company’s 5⁷/8% senior notes, based on the listed market value, was $339.8 million compared to the carrying value of $300.0 million. At December 31, 2013, the estimated fair values of the Company’s 5⁷/8% senior notes and 1¹/4% convertible senior subordinated notes, based on their listed market values, were $322.1 million and $290.5 million, respectively, compared to their carrying values of $300.0 million and $201.2 million, respectively.

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 September 30, 2014 and December 31, 2013, outstanding letters of credit totaled $18.7 million and $16.7 million, respectively.