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Debt | 12 Months Ended
--- | ---
Dec. 31, 2014
Debt Disclosure [Abstract] |
Debt | Debt Short-Term Borrowings The Company utilizes uncommitted lines of credit as needed for its short-term working capital fluctuations. As of December 31, 2014 and 2013, the Company had lines of credit from banks totaling $5.3 million and $5.4 million, respectively, of which no amounts were outstanding and all of which were unused and available, subject to certain restrictions imposed by the indentures governing the Notes and the Credit Agreement. Long-Term Debt A summary of long-term debt and the related weighted average interest rates is shown below (in millions):
December 31, | 2014 |  | 2013
Debt Instrument | Long-Term Debt |  | Weighted Average Interest Rate |  | Long-Term Debt |  | Weighted Average Interest Rate
7.875% Senior Notes due 2018 | $ | — |  |  | N/A |  | $ | 278.8 |  |  | 8.00%
8.125% Senior Notes due 2020 | 243.7 |  |  | 8.25% |  | 278.3 |  |  | 8.25%
4.75% Senior Notes due 2023 | 500.0 |  |  | 4.75% |  | 500.0 |  |  | 4.75%
5.375% Senior Notes due 2024 | 325.0 |  |  | 5.375% |  | — |  |  | N/A
5.25% Senior Notes due 2025 | 650.0 |  |  | 5.25% |  | — |  |  | N/A
| 1,718.7 |  |  |  |  | 1,057.1 |  |  |
Less — Current portion | (243.7 | ) |  |  |  | — |  |  |
Long-term debt | $ | 1,475.0 |  |  |  |  | $ | 1,057.1 |  |  |
Senior Notes As of December 31, 2014, the Company’s senior notes consist of $245 million in aggregate principal amount at maturity of senior unsecured notes due 2020 at a stated coupon rate of 8.125% (the "2020 Notes"), $500 million in aggregate principal amount of senior unsecured notes due 2023 at a stated coupon rate of 4.75% (the "2023 Notes"), $325 million in aggregate principal amount of senior unsecured notes due 2024 at a stated coupon rate of 5.375% (the "2024 Notes") and the 2025 Notes (and together with the 2020 Notes, the 2023 Notes and the 2024 Notes, the "Notes"). 2020 Notes The 2020 Notes were issued in March 2010, at 99.164% of par, resulting in a yield to maturity of 8.25%, and mature on March 15, 2020. Interest is payable on March 15 and September 15 of each year. In November 2014, the Company's Board of Directors authorized the redemption of the remaining outstanding aggregate principal amount of the 2020 Notes on or after March 15, 2015, the first available optional redemption date under the indenture governing the 2020 Notes. In January 2015, the Company issued a notice for the redemption of the 2020 Notes, which will occur on March 15, 2015. The Notes will be redeemed at a price equal to 104.063% of the principal amount thereof, plus accrued and unpaid interest to the redemption date. Accordingly, the 2020 Notes are recorded in current liabilities in the accompanying consolidated balance sheet as of December 31, 2014. In addition, $250 million of cash proceeds from the issuance of the 2025 Notes has been restricted for the redemption of the 2020 Notes. This restricted cash is recorded in other current assets in the accompanying consolidated balance sheet as of December 31, 2014, and is reflected as cash used in financing activities in the accompanying consolidated statement of cash flows for the year ended December 31, 2014 (see "— 2025 Notes" below). 2023 Notes The 2023 Notes were issued in January 2013 and mature on January 15, 2023. Interest is payable on January 15 and July 15 of each year. The 2023 Notes were offered and sold in a private transaction to qualified institutional buyers under Rule 144A and, outside of the United States, pursuant to Regulation S of the Securities Act of 1933, as amended (the "Securities Act"). In accordance with the registration rights agreement entered into at the time of the issuance of the 2023 Notes, the Company completed an exchange offer to exchange the 2023 Notes for substantially identical notes registered under the Securities Act in the second quarter of 2014. The proceeds from the offering of $500 million, net of related issuance costs of $7.4 million, together with the Company’s existing sources of liquidity, were used for general corporate purposes, including, without limitation, the redemption of $70 million in aggregate principal amount of the Company’s 7.875% senior unsecured notes due 2018 (the "2018 Notes") and the 2020 Notes, investments in additional component capabilities and emerging markets and share repurchases under the Company’s common stock share repurchase program (see Note 10, "Capital Stock and Equity"). In connection with the partial redemption of the 2018 Notes and 2020 Notes, the Company paid $72.1 million and recognized a loss of $3.6 million on the partial extinguishment of debt in the year ended December 31, 2013. The Company may redeem the 2023 Notes, in whole or in part, on or after January 15, 2018, at the redemption prices set forth below, plus accrued and unpaid interest to the redemption date.
Twelve-Month Period Commencing January 15, | 2023 Notes
2018 | 102.375%
2019 | 101.583%
2020 | 100.792%
2021 and thereafter | 100.000%
Prior to January 15, 2016, the Company may redeem up to 35% of the aggregate principal amount of the 2023 Notes, in an amount not to exceed the amount of net cash proceeds of one or more equity offerings, at a redemption price equal to 104.75% of the aggregate principal amount thereof, plus accrued and unpaid interest to the redemption date, provided that at least 65% of the original aggregate principal amount of the 2023 Notes remains outstanding after the redemption and any such redemption is made within 90 days after the closing of such equity offering. Prior to January 15, 2018, the Company may redeem the 2023 Notes, in whole or in part, at a redemption price equal to 100% of the aggregate principal amount thereof, plus a "make-whole" premium as of, and accrued and unpaid interest to, the redemption date. 2024 Notes The 2024 Notes were issued in March 2014 and mature on March 15, 2024. Interest is payable on March 15 and September 15 of each year. The proceeds from the offering of $325 million, net of related issuance costs of $3.9 million, together with existing cash on hand, were used to redeem the remaining outstanding aggregate principal amount of the 2018 Notes ($280 million) and 10% of the original aggregate principal amount of the 2020 Notes ($35 million). In connection with these transactions, the Company paid $327.1 million and recognized losses of $17.5 million on the extinguishment of debt in the year ended December 31, 2014. The Company may redeem the 2024 Notes, in whole or in part, on or after March 15, 2019, at the redemption prices set forth below, plus accrued and unpaid interest to the redemption date.
Twelve-Month Period Commencing March 15, | 2024 Notes
2019 | 102.688%
2020 | 101.792%
2021 | 100.896%
2022 and thereafter | 100.000%
Prior to March 15, 2017, the Company may redeem up to 35% of the aggregate principal amount of the 2024 Notes, in an amount not to exceed the amount of net cash proceeds of one or more equity offerings, at a redemption price equal to 105.375% of the aggregate principal amount thereof, plus accrued and unpaid interest to the redemption date, provided that at least 65% of the original aggregate principal amount of the 2024 Notes remains outstanding after the redemption and any such redemption is made within 90 days after the closing of such equity offering. Prior to March 15, 2019, the Company may redeem the 2024 Notes, in whole or in part, at a redemption price equal to 100% of the aggregate principal amount thereof, plus a "make-whole" premium as of, and accrued and unpaid interest to, the redemption date. 2025 Notes The 2025 Notes were issued in November 2014 and mature on January 15, 2025. Interest is payable on January 15 and July 15 of each year. In January 2015, the Company used $350 million of the proceeds from the offering of $650 million, net of related issuance costs of $8.4 million, along with $500 million in borrowings under the Term Loan Facility (see " — Credit Agreement" below), to finance the acquisition of Eagle Ottawa (see Note 3, "Acquisitions"). The $350 million of cash proceeds from the offering restricted for the acquisition of Eagle Ottawa is recorded in other long-term assets in the accompanying consolidated balance sheet as of December 31, 2014, and is reflected as cash used in investing activities in the accompanying consolidated statement of cash flows for the year ended December 31, 2014. The remaining proceeds will be used to redeem the remaining outstanding aggregate principal amount of the 2020 Notes (see " — 2020 Notes" above) and for general corporate purposes, including the payment of fees and expenses associated with the acquisition of Eagle Ottawa and related financing transactions. The Company may redeem the 2025 Notes, in whole or in part, on or after January 15, 2020, at the redemption prices set forth below, plus accrued and unpaid interest to the redemption date.
Twelve-Month Period Commencing January 15, | 2025 Notes
2020 | 102.625%
2021 | 101.750%
2022 | 100.875%
2023 and thereafter | 100.000%
Prior to January 15, 2018, the Company may redeem up to 40% of the aggregate principal amount of the 2025 Notes, in an amount not to exceed the amount of net cash proceeds of one or more equity offerings, at a redemption price equal to 105.25% of the aggregate principal amount thereof, plus accrued and unpaid interest to the redemption date, provided that at least 50% of the original aggregate principal amount of the 2025 Notes remains outstanding after the redemption and any such redemption is made within 120 days after the closing of such equity offering. Prior to January 15, 2020, the Company may redeem the 2025 Notes, in whole or in part, at a redemption price equal to 100% of the aggregate principal amount thereof, plus a "make-whole" premium as of, and accrued and unpaid interest to, the redemption date. 2012 Redemption of Senior Notes In 2012, the Company redeemed 10% of the original aggregate principal amount of each of the 2018 Notes and 2020 Notes ($70 million in aggregate) at a redemption price equal to 103% of the principal amount redeemed, plus accrued and unpaid interest to the redemption date. In connection with these transactions, the Company paid $72.1 million and recognized a loss of $3.7 million on the partial extinguishment of debt in the year ended December 31, 2012. Guarantees The Notes are senior unsecured obligations. The Company’s obligations under the Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by certain domestic subsidiaries, which are directly or indirectly 100% owned by Lear. See Note 16, "Supplemental Guarantor Consolidating Financial Statements." Covenants The indenture governing the 2020 Notes contains restrictive covenants that, among other things, limit the ability of the Company and its subsidiaries to: (i) incur additional debt, (ii) pay dividends and make other restricted payments, (iii) create or permit certain liens, (iv) issue or sell capital stock of the Company’s restricted subsidiaries, (v) use the proceeds from sales of assets and subsidiary stock, (vi) create or permit restrictions on the ability of the Company’s restricted subsidiaries to pay dividends or make other distributions to the Company, (vii) enter into transactions with affiliates, (viii) enter into sale and leaseback transactions and (ix) consolidate or merge or sell all or substantially all of the Company’s assets. The foregoing limitations are subject to exceptions as set forth in the 2020 Notes. In addition, if in the future the 2020 Notes have an investment grade credit rating from both Moody’s Investors Service and Standard & Poor’s Ratings Services and no default has occurred and is continuing, certain of these covenants will, thereafter, no longer apply to the 2020 Notes for so long as the 2020 Notes have an investment grade credit rating by both rating agencies. The indenture governing the 2020 Notes also provides for customary events of default. Subject to certain exceptions, the indentures governing the 2023 Notes, 2024 Notes and 2025 Notes contain restrictive covenants that, among other things, limit the ability of the Company to: (i) create or permit certain liens and (ii) consolidate or merge or sell all or substantially all of the Company’s assets. In addition, the indentures governing the 2023 Notes and 2024 Notes limit the ability of the Company to enter into sale and leaseback transactions. The indentures governing the Notes also provide for customary events of default. As of December 31, 2014, the Company was in compliance with all covenants under the indentures governing the Notes. Credit Agreement In November 2014, the Company amended and restated its Credit Agreement to, among other things, increase the borrowing capacity of the revolving credit facility from $1.0 billion to $1.25 billion, extend the maturity date from January 30, 2018 to November 14, 2019, and establish the $500 million Term Loan Facility, which matures on January 5, 2020. In connection with this transaction, the Company paid related issuance costs of $5.8 million and recorded a loss on the extinguishment of debt of $0.4 million. As of December 31, 2014 and 2013, there were no borrowings outstanding under the revolving credit facility. Aggregate borrowings and repayments under the revolving credit facility were both $22.0 million in 2014 and $518.7 million in 2013. As of December 31, 2014, there were no borrowings outstanding under the Term Loan Facility. In January 2015, the Company borrowed $500 million under the Term Loan Facility to finance the acquisition of Eagle Ottawa. Advances under the revolving credit facility generally bear interest at a variable rate per annum equal to (i) the Eurocurrency Rate (as defined) plus an adjustable margin of 1.0% to 2.25% based on the Company’s corporate rating (1.50% as of December 31, 2014), payable on the last day of each applicable interest period but in no event less frequently than quarterly, or (ii) the Adjusted Base Rate (as defined) plus an adjustable margin of 0.0% to 1.25% based on the Company’s corporate rating (0.50% as of December 31, 2014), payable quarterly. A facility fee, which ranges from 0.25% to 0.50% of the total amount committed under the revolving credit facility, is payable quarterly. Loans under the Term Loan Facility bear interest based on the Eurocurrency rate or base rate plus a margin, ranging from 1.25% to 2.25% for Eurocurrency and 0.25% to 1.25% for base rate. The Company’s obligations under the Credit Agreement are secured on a first priority basis by a lien on substantially all of the U.S. assets of the Company and its domestic subsidiaries, as well as 100% of the stock of the Company’s domestic subsidiaries and 65% of the stock of certain of the Company’s foreign subsidiaries. In addition, obligations under the revolving credit facility are guaranteed, jointly and severally, on a first priority basis, by certain domestic subsidiaries, which are directly or indirectly 100% owned by Lear. See Note 16, "Supplemental Guarantor Consolidating Financial Statements." The Credit Agreement contains various customary representations, warranties and covenants by the Company, including, without limitation, (i) covenants regarding maximum leverage and minimum interest coverage, (ii) limitations on fundamental changes involving the Company or its subsidiaries and (iii) limitations on indebtedness, liens, investments and restricted payments. As of December 31, 2014, the Company was in compliance with all covenants under the credit agreement. Scheduled Maturities As of December 31, 2014, there are no scheduled maturities of long-term debt in the next five years. As discussed in "— 2020 Notes" above, in January 2015, the Company issued a notice for the redemption of the remaining outstanding aggregate principal amount of the 2020 Notes, which will occur on March 15, 2015. As discussed in "— Credit Agreement" above, in January 2015, the Company borrowed $500 million under the Term Loan Facility to finance the acquisition of Eagle Ottawa. Including these subsequent events, scheduled maturities for the five succeeding years, as of the date of this Report, are shown below (in millions):
2015 | $ | 254.4 |
2016 | 21.8 |
2017 | 34.4 |
2018 | 46.9 |
2019 | 37.5 |

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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 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: 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 3: 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 + Details
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