External Debt and Financing Arrangements

6 Months Ended

Jun. 30, 2015

External Debt and Financing Arrangements

7.	External Debt and Financing Arrangements

In June 2015, we issued $900 million of unsecured senior notes (“Senior Notes”) in a registered public offering. The Senior Notes consist of two tranches: $400 million of five-year notes due 2020 with a coupon of 3% and $500 million of ten-year notes due 2025 with a coupon of 4%. We used the proceeds from the Senior Notes offering to pay down our revolving credit facility and for general purposes. On June 30, 2015, the outstanding amount of the Senior Notes, net of underwriting commissions and price discounts, was $891.1 million.

We have a $975 million committed revolving credit facility, as well as a term loan in the initial amount of $525 million, both of which expire in July 2018. Both facilities can be used for general corporate purposes. On June 30, 2015 and December 31, 2014, our outstanding borrowings under the revolving credit facility were zero and $145.0 million, respectively; the amounts outstanding under the term loan were $498.7 million and $525.0 million, respectively. At June 30, 2015 and December 31, 2014, the current portion of long-term debt was zero and $26.3 million, respectively. The interest rates under all of these facilities are variable based on LIBOR at the time of the borrowing and the Company’s leverage as measured by a debt to Adjusted EBITDA ratio. Based upon the Company’s debt to Adjusted EBITDA ratio at June 30, 2015, the Company’s borrowing rate could range from LIBOR + 1.0% to LIBOR + 2.0%. At June 30, 2015, we were in compliance with all covenants under these facilities.

We currently have uncommitted bank lines of credit in China, which provide for unsecured borrowings for working capital of up to $25.7 million in aggregate, of which zero was outstanding, as of June 30, 2015 and December 31, 2014. The weighted-average interest rates on these borrowings were zero and 7.2% in the six-month periods ended June 30, 2015 and 2014, respectively. The weighted-average interest rates on these borrowings were zero and 5.3% in the three-month periods ended June 30, 2015 and 2014, respectively.

As of June 30, 2015, JPMorgan Chase & Co. and its wholly owned subsidiaries (“JPM”) owned over 10% of the Company’s common stock. JPMorgan Chase Bank, N.A., a subsidiary of JPM, was a lender of $41.4 million of our total debt under our credit facilities and held $2.3 million of our cash balances. In addition, JPMorgan Investment Management, Inc., another subsidiary of JPM, manages pension assets in the Company’s Master Retirement Trust, which totaled $26.9 million as of June 30, 2015. J.P. Morgan Securities LLC was an underwriter in the Company’s June 2015 issuance of $900 million of Senior Notes. JPMorgan Chase & Co. does not participate in management of the Company nor do any of its employees sit on our Board of Directors.