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Long-term Debt | 12 Months Ended
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Dec. 31, 2011
Debt Disclosure [Abstract] |
Long-term Debt | LONG-TERM DEBT
| Interest Rate 2011 |  | December 31,
Dollar amounts in millions |  | 2011 |  | 2010
Debentures: |  |  |  |  |
Senior secured notes, maturing 2017, interest rates fixed | 13 | % |  | $ | 189.6 |  |  | $ | 183.5 |
Bank credit facilities: |  |  |  |  |
Chilean term credit facility, maturing 2019, interest rates fixed | UF+3.9% |  |  | 40.5 |  |  | 42.3 |
Brazilian export financing facility, maturing 2017, interest rates fixed | 6.65 | % |  | 10.0 |  |  | — |
Limited recourse notes payable: |  |  |  |  |
Senior notes, payable 2012, interest rates fixed | 7.1 | % |  | 7.9 |  |  | 7.9 |
Senior notes, payable 2013-2018, interest rates fixed | 7.1 – 7.3% |  |  | 112.0 |  |  | 112.0 |
Other financing: |  |  |  |  |
Non-recourse notes payable 2018, interest rates variable | 0.3 | % |  | 368.7 |  |  | 368.7 |
Other |  |  | 0.4 |  |  | 0.3 |
Total |  |  | 729.1 |  |  | 714.7 |
Less: current portion |  |  | (13.2 | ) |  | (0.2 | )
Net long-term portion |  |  | $ | 715.9 |  |  | $ | 714.5 |
LP believes the carrying amounts of its variable rate long-term debt approximates fair market value. LP estimated the limited recourse notes payable to have a fair value of approximately $122 million and $126 million at December 31, 2011 and 2010. LP estimated the senior secured notes maturing in 2017 to have a fair value of $243 million and $263 million at December 31, 2011 and 2010 based upon market quotations. LP estimates the fair value of the Chilean term credit facility as well as the Brazil export facility at book value based upon the recency of acquisition or refinancing of such debt. In 1997, LP issued $47.9 million of senior notes in a private placement to institutional investors. The remaining $7.9 million of notes mature in 2012. They are secured by the remaining $9.9 million of notes receivable from Sierra Pacific Industries. In the event of a default by Sierra Pacific Industries, LP is fully liable for the notes payable. LP issued $348.6 million of senior notes in June 1998 in a private placement to institutional investors. The remaining $112.0 million of notes mature in principal amounts of $90.0 million in 2013 and $22.0 million in 2018. The notes are secured by $113.7 million of notes receivable from Green Diamond Resource Company (Green Diamond). Pursuant to the terms of the notes payable, in the event of a default by Green Diamond, LP would be liable to pay only 10% of the indebtedness represented by the notes payable. LP issued $368.7 million of senior notes in 2003 in a private placement to unrelated third parties. The notes mature in 2018. The notes are supported by a bank letter of credit. LP’s reimbursement obligations under the letter of credit are secured by $410.0 million in notes receivable from assets sales. In general, the creditors under this arrangement have no recourse to LP’s assets, other than the notes receivable. However, under certain circumstances, LP may be liable for certain liabilities (including liabilities associated with the marketing or remarketing of the notes payable and reimbursement obligations, which are fully cash collateralized, under the letter of credit supporting the notes payable) in an amount not to exceed 10% of the aggregate principle amount of the notes receivable. During 2009, LP issued and sold 375,000 Units consisting of (1) $375 million principal amount at maturity of 13% Senior Secured Notes due 2017 and (2) warrants to purchase 18,395,963 shares of our common stock at an exercise price of $1.39 per share, subject to adjustment in certain circumstances and to mandatory cashless exercise provisions. The units were issued at a discount to the principal amount at maturity of the notes included therein resulting in aggregate gross proceeds of $281.3 million. The effective interest rate of this debt is 19.1% (or 19.7% including the warrants). Simultaneous with the closing of the unit sale, LP used a portion of the proceeds to retire $126.6 million aggregate principal amount of our 8.875% Senior Notes due 2010 for $126.0 million. Subsequently in 2009, LP redeemed 35% of the outstanding Senior Secured Notes ($131.3 million principal amount at maturity) at a price of $858.14 per $1,000 principal amount at maturity or $112.6 million with a portion of the proceeds from the issuance and sale of 20,700,000 shares of common stock through a public offering. In connection with this repurchase, LP recorded a loss on early debt extinguishment of $21.1 million which included $3.7 million associated with the write off of the related financing costs. LP has a credit facility which provides for a committed asset-based borrowing capacity of up to $100 million, with a $60 million sublimit for U.S. letters of credit and a $10 million sublimit for Canadian letters of credit. In October 2011, LP entered into an amendment to its credit facility which (1) extends the maturity from September 10, 2012 to October 14, 2016, (2) decreases the interest rate payable for certain types of loans, (3) permits LP to include in its borrowing base certain inventory that was previously excluded, (4) increases LP's flexibility to incur and prepay certain debt and (5) provides that the credit facility lenders' second priority liens on certain assets of LP and its subsidiaries that secure certain indebtedness of LP and its subsidiaries to other parties on a first priority basis will be automatically released in connection with the repayment of such other indebtedness. The availability of credit under the credit facility is subject to a borrowing base, which is calculated based on certain percentages of accounts receivable and inventory and at any given time may limit the amount of borrowings and letters of credit otherwise available under the facility. In addition, the credit facility contains a covenant requiring us to maintain a fixed charge coverage ratio of at least 1.1 to 1.0 at any time that our unused borrowing base capacity after adjustment to exclude certain past due trade payables falls below $15 million. At December 31, 2011, LP had $87.3 million of unused borrowing base capacity under the credit facility. The credit facility allows LP to pledge, as security for its reimbursement obligations in respect of letters of credit issued under the facility, cash collateral in an amount not less than 105% of the of the stated amount of such letters of credit. The above-described preclusion to LP’s utilization of $15 million of the capacity otherwise available under the facility does not apply to such cash collateralized letters of credit. At December 31, 2011, LP had no borrowings outstanding under the facility. Outstanding under this facility at December 31, 2011, were $9.9 million in letters of credit which were collateralized by $10.7 million of cash. Based upon LP’s available cash balances, LP does not currently anticipate using this facility except to obtain and maintain letters of credit. At December 31, 2011, LP estimates the fixed charge coverage ratio to be 0.2, and LP anticipate that the fixed charge coverage ratio will remain below 1.1 to 1.0 throughout 2012, and, accordingly be subject to the limitation on its ability to fully utilize the adjusted borrowing base capacity as described above. As a result, LP’s ability to obtain and maintain non-cash collateralized letters of credit under this facility may become constrained to an amount that does not exceed the excess of its adjusted borrowing base over $15 million. The credit facility contains customary covenants applicable to LP and its subsidiaries, other than certain unrestricted subsidiaries, including certain financial covenants as well as restrictions on, among other things, our ability to: incur debt; incur liens; declare or make distributions to our stockholders; make loans and investments; repay debt; enter into mergers, acquisitions and other business combinations; form or acquire subsidiaries; amend or modify our governing documents; enter into hedging arrangements; engage in other businesses other than our business as currently conducted; and enter into transactions with affiliates. The credit facility also contains customary events of default, the occurrence of which could result in the acceleration of our obligation to repay the indebtedness outstanding. Obligations under the indenture governing our Senior Secured Notes due 2017 are, in general, secured by a first-priority lien on the collateral that secures obligations under the credit facility on a second-priority basis, and by a second-priority lien on the collateral that secures obligations under the credit facility on a first-priority basis, subject to the terms of an intercreditor agreement, and are guaranteed by the subsidiaries that guarantee obligations under the credit facility. The indenture contains customary covenants applicable to us and our subsidiaries, other than certain unrestricted subsidiaries, including restrictions on actions and activities that are restricted under the credit facility. The indenture also contains customary events of default, the occurrence of which could result in acceleration of our obligations to repay the indebtedness outstanding thereunder. In December 2009, LP Chile entered into a term loan agreement with Banco de Credito e Inversiones for UF 943,543.7391 (equivalent to $39 million at the time of inception). The loan will be repaid in 16 semi-annual principal payments beginning in June 2012 and ending December 2019. The loan bears interest at UF plus 3.90% per annum, and is partially secured by a first priority security interest in substantially all of the real property owned by LP Chile. The loan contains various restrictive covenants and requires the maintenance by LP Chile of a debt to equity ratio of less than or equal to 1. If LP Chile is late in making payments, it will also be required to maintain a ratio of net debt to earnings before interest, taxes, depreciation and amortization (EBITDA) of less than or equal to 2.5 and a ratio of EBITDA to financial costs of at least 3. The loan agreement also contains customary events of default, the occurrence of which could result in acceleration of LP’s obligations to repay the indebtedness outstanding. As of December 31, 2011, no principal payments have been made on this loan. Any increases or decreases in the loan balance shown are related to the change in the underlying foreign currency exchange rates or required inflation adjustments. In August 2011, LP entered into an export financing loan agreement with a Brazilian bank. This loan is to be repaid in 10 equal semi-annual payments beginning in January 2013 and ending July 2017. The weighted average interest rate for all long-term debt at December 31, 2011 and 2010 was approximately 5.5 percent and 5.7 percent. Required repayment of principal for long-term debt is as follows:
Dollar amounts in millions |
Year ended December 31, |
2012 | $ | 13.2 |
2013 | 97.0 |
2014 | 7.0 |
2015 | 7.0 |
2016 | 7.0 |
2017 and after | 597.9 |
Total | $ | 729.1 |
Cash paid during 2011, 2010 and 2009 for interest (net of capitalized interest) was $56.6 million, $57.0 million and $63.7 million.

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- Definition The entire disclosure for long-term debt. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 22 -Article 5 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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