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Debt | 9 Months Ended
--- | ---
Sep. 30, 2012
Debt [Abstract] |
DEBT | 5. DEBT Short-term borrowings consisted of the following:
($ in millions) |  | September 30, 2012 |  |  | December 31, 2011 |
Non-U.S. lines of credit |  | $ | 2.0 |  |  | $ | 9.0 |
Total short-term borrowings |  | $ | 2.0 |  |  | $ | 9.0 |
Long-term borrowings consisted of the following:
($ in millions) |  | September 30, 2012 |  |  | December 31, 2011 |
Revolving Credit Facility |  | $ | — |  |  | $ | 180.0 |
ABL Facility |  |  | 6.9 |  |  |  | — |
Term Loan |  |  | 149.1 |  |  |  | — |
12.98% private placement note due 2012 |  |  | — |  |  |  | 27.3 |
Private placement note, floating rate (8.85% at December 31, 2011) |  |  | — |  |  |  | 6.2 |
Capital lease obligations |  |  | 1.9 |  |  |  | 0.5 |
|  |  | 157.9 |  |  |  | 214.0 |
Unamortized balance of terminated fair value interest rate swaps |  |  | — |  |  |  | 0.1 |
|  |  | 157.9 |  |  |  | 214.1 |
Less current maturities |  |  | (5.7 | ) |  |  | — |
Less current capital lease obligations |  |  | (0.4 | ) |  |  | (0.1 | )
Less financial services activities — borrowings (included in discontinued operations) |  |  | — |  |  |  | (0.9 | )
Total long-term borrowings and capital lease obligations, net |  | $ | 151.8 |  |  | $ | 213.1 |
On February 22, 2012, the Company entered into a Credit Agreement, by and among the Company, as borrower, and General Electric Capital Corporation, as a co-collateral agent, and Wells Fargo Capital Finance, LLC, as administrative agent and co-collateral agent, providing the Company with a new $100 million secured credit facility (the “ABL Facility”). The ABL Facility is a five-year asset-based revolving credit facility pursuant to which up to $100 million initially will be available, with the right, subject to certain conditions, to increase the availability under the facility by up to an additional $25 million. The ABL Facility provides for loans and letters of credit in an amount up to the aggregate availability under the facility subject to meeting certain borrowing base conditions, with a sub-limit of $50 million for letters of credit. Borrowings under the ABL Facility bear interest, at the Company’s option, at a base rate or a LIBOR rate, plus, in each case, an applicable margin. The applicable margin ranges from 1.00% to 2.75% for base rate borrowings and 1.75% to 3.50% for LIBOR borrowings. The Company must also pay a commitment fee to the facility lenders equal to 0.50% per annum on the unused portion of the ABL Facility along with other standard fees. Letter of credit fees are payable on outstanding letters of credit in an amount equal to the applicable LIBOR margin plus other customary fees. The Company is allowed to prepay in whole or in part advances under the ABL Facility without penalty or premium other than customary “breakage” costs with respect to LIBOR loans. The ABL Facility requires that the Company, on a consolidated basis, maintain a minimum monthly fixed charge coverage ratio, along with other customary restrictive covenants, certain of which are subject to materiality thresholds. The Company was in compliance with all of its debt covenants as of September 30, 2012. The obligations under the ABL Facility are secured by (i) a first priority security interest in the Company’s and its domestic subsidiaries’ accounts, inventory, chattel paper, payment intangibles, cash and cash equivalents and other working capital assets (the “ABL First Priority Collateral”) and (ii) a second priority security interest in all other now or hereafter acquired domestic property and assets, the stock or other equity interests in each of the domestic subsidiaries and certain of the first-tier foreign subsidiaries, subject to certain exclusions. The Company’s obligations under the ABL Facility are guaranteed by certain of the Company’s domestic subsidiaries. On February 22, 2012, the Company also entered into a Financing Agreement by and among the Company, as borrower, certain subsidiaries of the Company, as guarantors, the lenders party thereto (the “Term Lenders”) and TPG Specialty Lending, Inc., as administrative agent, collateral agent and sole lead arranger, pursuant to which the Term Lenders agreed to provide the Company with a $215 million term loan (the “Term Loan”). The Term Loan is a five-year, secured term loan maturing on February 22, 2017. Installment payments under the Term Loan do not commence until March 2013. The Term Loan allows for mandatory prepayments in certain specified situations. Except in these certain specified situations, the Term Loan is not repayable in the first 12 months of the term and thereafter is subject to the following prepayment premium; (i) 2.75% in months 13-24, (ii) 2.00% in months 25-36 and (iii) nothing thereafter. These provisions are subject to change upon the occurrence of certain specified events. The Term Loan will bear interest, at the Company’s option, at a base rate or adjusted LIBOR rate, plus, in each case, an applicable margin. The applicable margin ranges from 9.00% to 10.00% for base rate borrowings and 10.00% to 11.00% for LIBOR borrowings. The Company is required to pay certain customary fees in connection with the Term Loan. The Term Loan requires the Company to comply with financial covenants related to the maintenance of a minimum fixed charge coverage ratio, maximum capital expenditures, minimum liquidity, and maximum leverage ratio. The Term Loan has other restrictive covenants which are substantively similar to those applicable to the ABL Facility. The Company was in compliance with all of its debt covenants as of September 30, 2012. The obligations under the Term Loan are secured by (i) a first priority security interest in all now or hereafter acquired domestic property and assets (excluding the ABL First Priority Collateral), the stock or other equity interests in each of the domestic subsidiaries and certain of the first-tier foreign subsidiaries, subject to certain exclusions, and (ii) a second priority security interest in the ABL First Priority Collateral. The Company’s obligations under the Term Loan are guaranteed by certain of the Company’s domestic subsidiaries. Under the Term Loan, dividends shall be permitted only if the following conditions are met:
| • |  | No default or event of default shall exist or shall result from such payment;
| • |  | The fixed charge ratio of the Company and its subsidiaries shall be, both before and after the dividend payment (on a pro forma basis), not less than 1.50 to 1.00; and
| • |  | The leverage ratio of the Company and its subsidiaries shall be, both before and after the dividend payment (on a pro forma basis), less than 2.00 to 1.00.
The Company used the proceeds from the ABL Facility and the Term Loan to (i) repay outstanding balances under the Company’s existing $240 million secured revolving credit facility, dated as of April 25, 2007, as amended, which was to mature on April 25, 2012 (the “Prior Credit Agreement”); (ii) retire the Company’s private placement notes issued pursuant to the Note Purchase Agreement, dated as of June 1, 2009, as amended, and pursuant to the Master Note Purchase Agreement dated as of June 1, 2003, as amended (together, the “Prior Note Purchase Agreements”); (iii) finance the ongoing general corporate needs of the Company and its subsidiaries; and (iv) pay fees and expenses associated with repayment of amounts due under the Prior Credit Agreement and the Prior Note Purchase Agreements, including the payment of approximately $1.0 million in resulting breakage fees and premiums under the Prior Credit Agreement and Prior Note Purchase Agreements, and pay fees and expenses associated with the ABL Facility and the Term Loan. In accounting for the classification of its outstanding debt as of December 31, 2011, the Company considered the guidance in ASC 470-10-45-14. As the Company had effectively refinanced short-term debt on a long-term basis subsequent to the condensed consolidated balance sheet date, the amounts outstanding under the Prior Credit Agreement and the Prior Note Purchase Agreements as of December 31, 2011 were reflected as a component of long-term borrowings and capital lease obligations on the condensed consolidated balance sheet. As of December 31, 2011, $180.0 million was drawn on the Prior Credit Agreement leaving available borrowings of $49.1 million that included $32.5 million of capacity used for existing letters of credit. On September 4, 2012, the Company prepaid $65.0 million of its outstanding principal balance of its Term Loan debt at par with no prepayment penalty and related accrued interest of $0.1 million with net proceeds from the sale of FSTech. This prepayment was executed in accordance with the terms of the Financing Agreement. The Company also prepaid $10.0 million of debt drawn under the ABL Facility on the same date with net proceeds from the sale of FSTech. As of September 30, 2012, the available borrowing base under the ABL Facility was $62.9 million. As of September 30, 2012, there was $6.9 million in cash drawn and $31.3 million of undrawn letters of credit under the ABL Facility, reducing net availability for borrowings to $24.7 million. As of September 30, 2012, $2.0 million was drawn against the Company’s non-U.S. lines of credit which provide for borrowings up to $14.1 million. The Financing Agreement included a provision that if as of September 30, 2012, the outstanding ABL Facility debt plus the outstanding Term Loan debt was less than $170.0 million, the installment payments required against the Term Loan due on March 31, 2013, June 30, 2013, September 30, 2013, and December 31, 2013 would be reduced on a pro rata basis, dollar-for-dollar by the amount the outstanding ABL Facility debt plus the outstanding Term Loan debt was less than $170.0 million as of September 30, 2012. The balance of the ABL Facility debt plus the outstanding Term Loan debt was $156.0 million on September 30, 2012. The resulting variance of $14.0 million between the target of $170.0 million and the actual balance of $156.0 million will reduce the required 2013 quarterly installment payments against the Term Loan by $3.5 million per quarter. Aggregate maturities of total borrowings amount to approximately $2.5 million in 2012, $8.0 million in 2013, $32.6 million in 2014, $32.6 million in 2015, $32.4 million in 2016, and $51.8 million thereafter. These maturities primarily reflect the payment terms of the ABL Facility and the Term Loan. The fair values of aggregate borrowings were $185.2 million and $221.4 million at September 30, 2012 and December 31, 2011, respectively. Included in current maturities are $2.0 million of other non-U.S. lines of credit, $5.7 million of Term Loan, and $0.4 million of capital lease obligations. Upon execution of the Company’s new debt agreements in February 2012, the remaining unamortized deferred financing costs related to the Prior Credit Agreement and the Prior Note Purchase Agreement were written off. In the first quarter of 2012, the Company recorded $1.6 million of costs related to the termination of its prior debt agreements. The costs included $1.0 million of make-whole interest payments and a write-off of deferred financing costs of $0.6 million. The Company has incurred $8.3 million of debt issuance costs associated with the execution of its new debt agreements through September 30, 2012, of which $6.9 million was paid in 2012. Financing costs incurred related to the new debt agreements are deferred and amortized over the remaining life of the new debt. On September 4, 2012, the Company expensed $1.9 million of deferred debt issuance costs related to the $75.0 million prepayment of the outstanding principal for the Term Loan and ABL Facility. At September 30, 2012 and December 31, 2011, deferred financing fees totaled $5.1 million and $1.0 million, respectively, and are included in deferred charges and other assets on the condensed consolidated balance sheet.

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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 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 Reference 2: 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 3: 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 4: 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. + Details
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