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Borrowings | 6 Months Ended
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Jun. 26, 2011
Borrowings |
Borrowings | Note 7 — Borrowings The following table provides the components of long-term debt as of June 26, 2011 and December 31, 2010:
|  | June 26, 2011 |  |  | December 31, 2010 |
|  | (Dollars in thousands) |
Senior Credit Facility: |  |  |  |  |  |  |  |
Term loan, at an average rate of 1.31%, due 10/1/2012 |  | $ | — |  |  | $ | 36,123 |
Term loan, at an average rate of 2.56%, due 10/1/2014 |  |  | 375,000 |  |  |  | 363,877 |
2004 Notes: |  |  |  |  |  |  |  |
6.66% Series 2004-1 Tranche A Senior Notes due 7/8/2011 |  |  | — |  |  |  | 72,500 |
7.14% Series 2004-1 Tranche B Senior Notes due 7/8/2014 |  |  | — |  |  |  | 48,250 |
7.46% Series 2004-1 Tranche C Senior Notes due 7/8/2016 |  |  | — |  |  |  | 45,050 |
3.875% Convertible Senior Subordinated Notes due 2017 |  |  | 400,000 |  |  |  | 400,000 |
6.875% Senior Subordinated Notes due 2019 |  |  | 250,000 |  |  |  | — |
|  |  | 1,025,000 |  |  |  | 965,800 |
Less: Unamortized debt discount on 3.875% Convertible Senior Subordinated Notes due 2017 |  |  | (75,134 | ) |  |  | (79,891 | )
|  |  | 949,866 |  |  |  | 885,909 |
Less: Current portion of borrowings |  |  | — |  |  |  | (72,500 | )
Total long-term debt |  | $ | 949,866 |  |  | $ | 813,409 |
6.875% Senior Subordinated Notes On June 13, 2011, the Company issued $250.0 million of 6.875% Senior Subordinated Notes due 2019 (the "Notes"). The Notes and the guarantees of the Company's obligations under the Notes were issued under the Second Supplemental Indenture (the "Second Supplemental Indenture") executed by the Company, the subsidiaries of the Company named as guarantors therein and Wells Fargo Bank, N.A., as trustee (the "Trustee"). The Second Supplemental Indenture supplements the Indenture, dated as of August 2, 2010 (the "Base Indenture" and, as supplemented by the Second Supplemental Indenture, the "Indenture") between the Company and the Trustee. The Company will pay interest on the Notes semi-annually on June 1 and December 1, commencing on December 1, 2011, at a rate of 6.875% per year. The Notes will mature on June 1, 2019, unless earlier redeemed or purchased by the Company at the holder's option under specified circumstances following a Change of Control or Asset Sale (each as defined in the Indenture) or upon the Company's election to exercise its optional redemption rights, as described below. The Company incurred estimated transaction fees of approximately $4.2 million, including underwriters' discounts and commissions in connection with the public offering of the Notes. The Company used $125 million of the proceeds to repay term loan borrowings under its senior credit facility and recorded a $0.8 million write-off of unamortized debt issuance costs as a loss on extinguishment of debt during the second quarter of 2011. The Notes constitute the Company's general unsecured senior subordinated obligations and are subordinated in right of payment to all of the Company's existing and future senior indebtedness, including the Company's indebtedness under its credit facilities, and will be equal in right of payment with all of the Company's existing and future senior subordinated indebtedness, including the Company's 3.875% Convertible Senior Subordinated Notes due 2017. The obligations under the Notes will be fully and unconditionally guaranteed, jointly and severally, by each of the Company's existing and future domestic subsidiaries that is a guarantor or other obligor under the Company's credit facilities and by certain of the Company's other domestic subsidiaries. The guarantees of the Notes will be subordinated in right of payment to all of the existing and future senior indebtedness of such Guarantors and will be equal in right of payment with all of the future senior subordinated indebtedness of such Guarantors. The Notes and the guarantees will be junior to the existing and future secured indebtedness of the Company and the Guarantors to the extent of the value of the assets securing such indebtedness and will be structurally subordinated to all of the existing and future indebtedness and other liabilities of the Company's non-guarantor subsidiaries. At any time on or after June 1, 2015, the Company may redeem some or all of the Notes at a redemption price of 103.438% of the principal amount of the Notes subject to redemption, declining to 100% of the principal amount on June 1, 2017, plus accrued and unpaid interest. In addition, at any time prior to June 1, 2015, the Company may, on one or more occasions, redeem some or all of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed plus a "make-whole" premium and any accrued and unpaid interest. The "make-whole" premium is the greater of (i) 1.0% of the principal amount of the Notes subject to redemption or (ii) the present value, on the redemption date, of (a) the excess, if any, of the June 1, 2015 option redemption price over the principal amount of the Notes. Present value is determined based upon the present value of the redemption price of the Notes at June 1, 2015 plus all required interest payments on the Notes through June 1, 2015 (other than accrued and unpaid interest to the redemption date), based on a specified Treasury rate for the period most closely corresponding to the period from the redemption date to June 1, 2015, plus 50 basis points. In addition, at any time prior to June 1, 2014, the Company may redeem up to 35% of the aggregate principal amount of the Notes, using the proceeds of certain Company specified equity offerings, at a redemption price equal to 106.875% of the principal amount of the Notes redeemed, plus accrued and unpaid interest. Prepayment of 2004 Senior Notes During the first quarter of 2011, the Company prepaid the entire outstanding $165.8 million principal amount of its senior notes issued in 2004 ("2004 Notes"). In addition, the Company paid the holders of the 2004 Notes a $13.9 million prepayment make-whole amount and accrued and unpaid interest. The Company recorded the prepayment make-whole amount and a $0.7 million write-off of unamortized debt issuance costs incurred prior to the prepayment of the 2004 Notes as a loss on extinguishment of debt during the first quarter of 2011. The Company used $150 million in borrowings under its revolving credit facility and available cash to fund the prepayment of the 2004 Notes. Amendments to Credit Facility In March 2011, the Company entered into an agreement (the "Incremental Agreement"), which supplemented the Credit Agreement, dated as of October 1, 2007 (the "Credit Agreement") among the Company, the guarantors party thereto, the lending institutions identified in the Credit Agreement, Bank of America, N.A., as syndication agent, and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent. The Incremental Agreement provided for additional term loan borrowings under the Credit Agreement in an aggregate principal amount of $100 million (the "Incremental Term Loans"). The proceeds of the Incremental Term Loans were used to repay $80 million of borrowings under the Company's revolving credit facility that were borrowed in connection with the prepayment of the 2004 Notes that occurred in March 2011. In addition, in March 2011, $36.1 million of term loans maturing on October 1, 2012 were converted to term loans with a new maturity date of October 1, 2014. In addition, all of the Company's $33.7 million of revolving credit facility commitments with a termination date of October 1, 2012 were converted to revolving credit facility commitments with a new termination date of October 1, 2014 (as noted below, all outstanding revolving credit borrowings were repaid with proceeds from the sale of the marine business). In connection with the extension of these maturity dates, the range of the applicable interest rate margins, and the commitment fee rate on unused but committed portions of the revolving credit facility were increased. As described below under "Revolving Credit Facility Borrowings," the Company incurred transaction fees of approximately $0.3 million in connection with the extensions that will be amortized over the extended term of the facility as interest expense. As a result of the Incremental Term Loans, the amendment to the Credit Agreement and repayment of $125 million in term borrowings using the proceeds of the offering of its 6.875% Senior Subordinated Notes, the Company had $375 million of term loans outstanding on June 26, 2011. All of the term loans will mature on October 1, 2014 Interest on the term loans bear interest at an applicable rate elected by the Company equal to either the "base rate" (the greater of either the federal funds effective rate plus 0.5%, the prime rate or one month LIBOR plus 1.0%) plus an applicable margin of 0.50% to 1.75%, or a "LIBOR rate" for the period corresponding to the applicable interest period of the borrowings plus an applicable margin of 1.50% to 2.75%. The actual amount of the applicable margin will be based on the ratio of Consolidated Total Indebtedness to Consolidated EBITDA (each as defined in the Credit Agreement). At June 26, 2011, all outstanding term loans were subject to the "LIBOR rate" of 0.3125% plus an applicable margin of 2.25%, resulting in an interest rate of 2.5625%. .Revolving Credit Facility Borrowings During the first quarter of 2011, the Company borrowed $165 million under its $400 million revolving credit facility to fund the VasoNova acquisition and the retirement of the 2004 Notes. The borrowings were subsequently repaid with the proceeds from the sale of the marine business (for additional information regarding the sale of the marine business, see Note 15, "Divestiture related activities") and borrowings under the Incremental Term Loans. As of June 26, 2011, the Company had no outstanding borrowings and approximately $3 million in outstanding standby letters of credit issued under its revolving credit facility. In connection with the extension of term loan maturities that occurred in March 2011, the commitment fee rate on unused but committed portions of the revolving credit facility increased to a range of 0.375% to 0.50%. The actual amount of the commitment fee rate is based on the ratio of Consolidated Total Indebtedness to Consolidated EBITDA (each as defined in the Credit Agreement). At June 26, 2011, the commitment fee rate was 0.375%. Fair Value of Long-Term Debt The carrying amount of long-term debt reported in the condensed consolidated balance sheet as of June 26, 2011 is $949.9 million. Using a discounted cash flow technique that incorporates a market interest yield curve with adjustments for duration, optionality, and risk profile, the Company has determined the fair value of its debt to be $1,081.6 million at June 26, 2011. The Company's implied credit rating is a factor in determining the market interest yield curve. Debt Maturities As of June 26, 2011, the aggregate amounts of the securitization program and long-term debt maturing during the remainder of 2011, during each of the next three fiscal years and thereafter were as follows:
|  | (Dollars in thousands) |
2011 |  | $ | 29,700 |
2012 |  |  | — |
2013 |  |  | — |
2014 |  |  | 375,000 |
2015 and thereafter |  |  | 650,000 |

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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 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. 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 Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 + Details
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