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Debt and Credit Facilities | 12 Months Ended
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Dec. 31, 2014
Debt Disclosure [Abstract] |
Debt and Credit Facilities | Note 11 Debt and Credit Facilities Our total debt outstanding consisted of the amounts set forth on the following table:
|  | December 31, |  |  | December 31, |
(In millions) |  | 2014 |  |  | 2013 |
Short-term borrowings (1) |  | $ | 130.4 |  |  | $ | 81.6 |
Current portion of long-term debt(2) |  |  | 1.1 |  |  |  | 201.5 |
Total current debt |  |  | 131.5 |  |  |  | 283.1 |
Term Loan A Facility due July 2017, less unamortized lender fees of $0.3 in 2014(3)(4) |  |  | 249.7 |  |  |  | — |
Term Loan A Facility due July 2019 (October 2016 prior to refinance), less unamortized lender fees of $10.6 in 2014 and $8.4 in 2013 (3)(4) |  |  | 1,129.4 |  |  |  | 634.8 |
Term Loan B Facility due October 2018, less unamortized lender fees of $7.3 in 2013, and unamortized discount of $10.8 in 2013(3) |  |  | — |  |  |  | 681.6 |
8.125% Senior Notes due September 2019(5) |  |  | — |  |  |  | 750.0 |
6.50% Senior Notes due December 2020(6) |  |  | 428.1 |  |  |  | 424.1 |
8.375% Senior Notes due September 2021 |  |  | 750.0 |  |  |  | 750.0 |
4.875% Senior Notes due December 2022(5) |  |  | 425.0 |  |  |  | — |
5.25% Senior Notes due April 2023 |  |  | 425.0 |  |  |  | 425.0 |
5.125% Senior Notes due December 2024(5) |  |  | 425.0 |  |  |  | — |
6.875% Senior Notes due July 2033, less unamortized discount of $1.3 in 2014 and $1.4 in 2013 |  |  | 448.7 |  |  |  | 448.6 |
Other |  |  | 1.6 |  |  |  | 2.3 |
Total long-term debt, less current portion |  |  | 4,282.5 |  |  |  | 4,116.4 |
Total debt(7) |  | $ | 4,414.0 |  |  | $ | 4,399.5 |
(1) | December 31, 2014 is comprised primarily of $36 million of borrowings outstanding under our U.S. accounts receivable securitization program and $23 million outstanding under our revolving credit facility, of which we have the intent and ability to repay within twelve months as of December 31, 2014, and $71 million short-term borrowings from various lines of credits. As of December 31, 2013, we had no amounts outstanding under either the U.S. or European program, and we did not utilize these programs during 2013.
(2) | The Company’s $150 million 12% Senior Notes due February 2014 (“12% Senior Notes”) were included in current portion of long-term debt as of December 31, 2013. We repaid the 12% Senior Notes upon their maturity using cash on hand and committed liquidity.
(3) | On July 25, 2014, the Company entered into a second restatement agreement for refinancing of the Term Loan A facilities, Term Loan B facilities and revolving credit facilities with new Term Loan A facilities. See below for further information.
(4) | Term Loan A facilities have required prepayments which are due in 2016.
(5) | In November 2014, the Company issued $425 million of 4.875% Senior Notes due December 1, 2022 and $425 million of 5.125% Senior Notes due December 1, 2024. The proceeds from this note were used to repurchase the Company’s $750 million 8.125% Notes due September 15, 2019. See below for further information.
(6) | On October 16, 2014, the Company terminated the $100 million of outstanding interest rate swaps on our 6.5% Senior Notes due December 1, 2020. See below for further information.
(7) | The weighted average interest rate on our total outstanding debt was 5.2% as of December 31, 2014 and 6.2% as of December 31, 2013.
Senior Notes 2014 Activity In the fourth quarter 2014, Sealed Air issued $425 million of 4.875% Senior Notes due December 1, 2022 and $425 million of 5.125% Senior Notes due December 1, 2024. The proceeds from this note were used to repurchase the company’s $750 million 8.125% Notes due September 2019. The aggregate repurchase price was $837 million, which included the principal amount of $750 million, a premium of $75 million and accrued interest of $12 million. We recognized a total pre-tax loss of $84 million on the repurchase, which included the premiums mentioned above. Also included in the loss on debt redemption was $9 million of accelerated amortization of original non-lender fees related to the 8.125% Senior Notes. We also capitalized $13 million of non-lender fees incurred in connection with the 4.875% Senior Notes and 5.125% Senior Notes that are included in other assets on our consolidated balance sheet. In the fourth quarter of 2014, we terminated the swaps that were associated with the 6.5% Senior Notes although the 6.5% Senior Notes remained outstanding. The $3 million gain on termination of swaps increased the carrying amount of our 6.5% Senior Note, which is being amortized using effective interest method over the remaining maturities of the Senior Note and included in interest expense on our consolidated statement of operations. 2013 Activity In March 2013, we issued $425 million of 5.25% Senior Notes and used substantially all of the proceeds to retire the 7.875% Senior Notes due June 2017. We repurchased the 7.875% Senior Notes at fair value. The aggregate repurchase price was $431 million, which included the principal amount of $400 million, a 6% premium of $23 million and accrued interest of $8 million. We recognized a total net pre-tax loss of $32 million, which included the premiums mentioned above. The 5.25% Senior Notes will mature on April 1, 2023 and interest is payable on April 1 and October 1 of each year, commencing October 1, 2013. 2012 Activity In November 2012, we issued $425 million of 6.50% Senior Notes and used substantially all of the proceeds to retire the 5.625% Senior Notes due July 2013. We repurchased the 5.625% Senior Notes at fair value. The aggregate repurchase price was $421 million, which included the principal amount of $400 million, a 3% premium of $13 million and accrued interest of $8 million. As a result, we recognized a net pre-tax loss of $12 million, which included the premium mentioned above, less a gain of $1 million on the termination of a related interest rate swap. The loss on debt redemption is included on our consolidated statements of operations. Credit Facility 2014 Activity Amended and Restated Senior Secured Credit Facilities On July 25, 2014, the Company entered into a second restatement agreement (the “Second Restatement Agreement”) whereby its senior secured credit facility was amended and restated (the “Second Amended and Restated Credit Agreement”) with Bank of America, N.A., as agent, and the other financial institutions party thereto. The changes include (i) the refinancing of the Term Loan A facilities, Term Loan B facilities and revolving credit facilities with new Term Loan A facilities (including facilities in Canadian dollars, euros, Japanese yen, pounds sterling and U.S. dollars) in an aggregate principal amount equivalent to $1,330 million and revolving credit facilities of $700 million, (ii) a new $100 million delayed draw Term Loan A facility (used for our Brazilian operations), (iii) a 0.75% reduction of the interest rate margin for the Term Loan A facilities and revolving credit facilities, (iv) extension of the final maturity of the Term Loan A facilities and revolving credit commitment to July 25, 2019, (v) adjustments to the financial maintenance covenant of Consolidated Net Debt to Consolidated EBITDA (as defined in the Second Amended and Restated Credit Agreement) and other covenants to provide additional flexibility to the Company and (vi) other amendments. Term Loan B was fully extinguished as a result of the Refinancing. On August 29, 2014, we completed the $100 million delayed draw of the Term Loan A facility. In connection with this loan, we also entered into interest rate and currency swaps in a notional amount of $100 million, which convert our floating U.S. dollar denominated obligation under the Term Loan A into a fixed rate Brazilian real denominated obligation. As a result of the Second Restatement Agreement, we recognized $18 million of loss on debt redemption in our consolidated statements of operations. This amount includes $13 million of accelerated amortization of original issuance discount related to the Term Loan B and lender and non-lender fees related to the entire credit facility. Also included in the loss on debt redemption was $5 million of non-lender fees incurred in connection with the Second Restatement Agreement. In addition, we incurred $2 million of lender fees that are included in the carrying amounts of the outstanding debt under the credit facility. We also capitalized $5 million of non-lender fees that are included in other assets on our consolidated balance sheet. The amortization expense related to original issuance discount and lender and non-lender fees is calculated using the effective interest rate method over the lives of the respective debt instruments. Total amortization expense in 2014 related to the Senior Secured Credit Facilities was $10 million and is included in interest expense in our consolidated statements of operations. 2013 Activity 2013 Amended Credit Facility In November 2013, we amended our senior secured credit facility (the “Amended Credit Facility”). The amendment refinanced the Term Loan B facilities with a $525 million Term Loan B dollar tranche and a €128 million Term Loan B euro tranche. In connection therewith, among other things, (i) the interest margin on each tranche was decreased by 0.75%, and the minimum Eurocurrency rate under the Term Loan B facilities was reduced from 1.00% to 0.75%. We prepaid $101 million and refinanced the remaining principal amount of $697 million of the euro and U.S. dollar denominated portions of the original Term Loan B at 100% of their face value. We recognized a $4 million pre-tax loss on debt redemption included in our results of operations for 2013, consisting of accelerated unamortized original issuance discount, unamortized fees, and fees associated with the transaction. 2012 Activity 2012 Amended Credit Facility In connection with the sale of Diversey Japan (see Note 3, “Divestitures”), and the repayment of existing indebtedness of the Company and to provide for ongoing liquidity requirements, on November 14, 2012, we entered into an amended senior secured credit facility (the “2012 Amended Credit Facility”). The 2012 Amended Credit Facility consisted of: (a) a multicurrency Term Loan A facility denominated in U.S. dollars, Canadian dollars, euros and Japanese yen, (“2012 Amended Term Loan A Facility”), (b) a multicurrency Term Loan B facility denominated in U.S. dollars and euros (“2012 Amended Term Loan B Facility”) and (c) a $700 million revolving credit facility available in U.S. dollars, Canadian dollars, euros, and Australian dollars (“2012 Amended Revolving Credit Facility”). Our obligations under the Amended Credit Facility were guaranteed by certain of Sealed Air’s subsidiaries and secured by pledges of certain assets and the capital stock of certain subsidiaries. The 2012 Amended Term Loan A Facility and the Amended Revolving Credit Facility each had a five-year term with final maturity in October 2016 and bore interest at either LIBOR or the base rate (or an equivalent rate in the relevant currency) plus 250 basis points (bps) per annum in the case of LIBOR loans and 150 bps per annum in the case of base rate loans. The 2012 Amended Term Loan B Facility had a seven-year term with final maturity in October 2018. In connection with the sale of Diversey Japan, we prepaid $90 million and refinanced the remaining principal amount of $80 million of Japanese yen denominated balances owned of the original Term Loan A. As a result, we accelerated $1 million of original unamortized lender fees included as a reduction of the pre-tax gain on the sale of Diversey Japan. We prepaid $95 million of euro and U.S. dollar denominated portions of the original Term Loan A. We prepaid $1.1 billion and refinanced the remaining principal amount of $801 million of the euro and U.S. dollar denominated portions of the original Term Loan B at 99.75% of the face value. As a result, we accelerated unamortized original issuance discounts of $9 million and unamortized lender fees of $7 million, which are included in loss on debt redemption on our consolidated statements of operations. We also recorded new original issuance discount and non-lender fees for a total of $2 million, which are included in the carrying amount of the debt instruments. In addition, we recorded $7 million of non-lender fees related to the transactions mentioned above. Those fees are included in loss on debt redemption on our consolidated statements of operations. The amortization expense of the original issuance discount and lender and non-lender fees is calculated using the effective interest rate method over the lives of the respective debt instruments. Total amortization expense in 2012 related to the debt instruments above was $23 million and is included in interest expense on our consolidated statements of operations. There were no amounts outstanding under the Amended Revolving Credit Facility at December 31, 2013 and 2012. Lines of Credit The following table summarizes our available lines of credit and committed and uncommitted lines of credit, including the Revolving Credit Facility discussed above, and the amounts available under our accounts receivable securitization programs. We are not subject to any material compensating balance requirements in connection with our lines of credit.
|  | December 31, |  |  | December 31, |
(In millions) |  | 2014 |  |  | 2013 |
Used lines of credit (1) |  | $ | 130.4 |  |  | $ | 81.6 |
Unused lines of credit |  |  | 1,101.7 |  |  |  | 1,224.0 |
Total available lines of credit(2) |  | $ | 1,232.1 |  |  | $ | 1,305.6 |
(1) | Includes total borrowings under the AR securitization programs, the revolving credit facility and borrowings under lines of credit available to several foreign subsidiaries.
(2) | Of the total available lines of credit, $892 million were committed as of December 31, 2014.
Covenants Each issue of our outstanding senior notes imposes limitations on our operations and those of specified subsidiaries. The Amended Credit Facility contains customary affirmative and negative covenants for credit facilities of this type, including limitations on our indebtedness, liens, investments, restricted payments, mergers and acquisitions, dispositions of assets, transactions with affiliates, amendment of documents and sale leasebacks, and a covenant specifying a maximum permitted ratio of Consolidated Net Debt to Consolidated EBITDA (as defined in the Credit Facility). We were in compliance with the above financial covenants and limitations at December 31, 2014 and 2013. Debt Maturities The following table summarizes the scheduled annual maturities for the next five years and thereafter of our long-term debt, including the current portion of long-term debt. This schedule excludes debt discounts, interest rate swaps and lender fees.
Year |  | Amount (in millions) |
2015 |  | $ | 1.1 |
2016 |  |  | 46.9 |
2017 |  |  | 322.9 |
2018 |  |  | 72.8 |
2019 |  |  | 950.5 |
Thereafter |  |  | 2,901.5 |
Total |  | $ | 4,295.7 |

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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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