XML 96 R14.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Long-term debt | 12 Months Ended
--- | ---
Dec. 25, 2011
Long-term debt | NOTE 7 Long-term debt The long-term debt of the company is summarized below:
|  |  | September 30, |  |  |  | September 30, |
In thousands of dollars |  | Dec. 25, 2011 |  |  | Dec. 26, 2010 |
Unsecured notes bearing fixed rate interest at 5.75% paid June 2011 |  | $ | — |  |  | $ | 433,196 |
Unsecured floating rate term loan paid July 2011 |  |  | — |  |  |  | 180,000 |
Unsecured notes bearing fixed rate interest at 6.375% due April 2012 |  |  | 306,534 |  |  |  | 306,397 |
Borrowings under revolving credit agreements expiring September 2014 |  |  | 235,000 |  |  |  | 221,000 |
Unsecured notes bearing fixed rate interest at 8.75% due November 2014 |  |  | 247,609 |  |  |  | 246,924 |
Unsecured notes bearing fixed rate interest at 10% due June 2015 |  |  | 59,522 |  |  |  | 58,007 |
Unsecured notes bearing fixed rate interest at 6.375% due September 2015 |  |  | 247,995 |  |  |  | 247,535 |
Unsecured notes bearing fixed rate interest at 10% due April 2016 |  |  | 169,775 |  |  |  | 165,950 |
Unsecured notes bearing fixed rate interest at 9.375% due November 2017 |  |  | 247,168 |  |  |  | 246,830 |
Unsecured notes bearing fixed rate interest at 7.125% due September 2018 |  |  | 246,760 |  |  |  | 246,403 |
Total long-term debt |  | $ | 1,760,363 |  |  | $ | 2,352,242 |
Total average debt outstanding in 2011 and 2010 was $2.1 billion and $2.7 billion, respectively. The weighted average interest rate on all debt was 7.4% for 2011 and 6.0% for 2010. On December 25, 2011, the company had unused borrowing capacity of $1.40 billion under its revolving credit agreements. In addition, its revolving credit agreements allow the company to borrow at least $1.0 billion of additional unsecured debt (unrestricted as to purpose) guaranteed by the guarantor subsidiaries under these credit agreements. This borrowing limit is subject to increases depending upon the company’s total leverage ratio. During 2010 and 2009, the company completed a series of financing transactions which improved its debt maturity profile. In September 2010, the company completed a private placement offering of unsecured senior notes totaling $500 million in two tranches: $250 million with a coupon of 6.375% due 2015 and $250 million with a coupon of 7.125% due 2018. The 2015 notes were priced at 98.970% of face value, resulting in a yield to maturity of 6.625%. The 2018 notes were priced at 98.527% of face value, resulting in a yield to maturity of 7.375%. On or after Sept. 1, 2014, the 2018 notes may be redeemed or purchased by the company at the applicable redemption price (expressed as a percentage of the principal amount of the 2018 notes) plus accrued but unpaid interest thereon to the redemption date, if redeemed during the 12-month period commencing on Sept. 1 of the following years: 2014 – 103.563%, 2015 – 101.781% and 2016 and thereafter 100.000%. The company used the net proceeds of the offering to partially repay borrowings outstanding under its revolving credit agreements and term loan. In September 2010, the company amended its revolving credit agreements and extended the maturity date with the majority of its lenders from March 15, 2012 to Sept. 30, 2014. Total commitments under the amended revolving credit agreements are $1.63 billion through March 15, 2012 and total extended commitments from March 15, 2012 to Sept. 30, 2014 will be $1.14 billion. In October 2009, the company completed a private placement offering of $250 million in aggregate principal amount of 8.750% senior notes due 2014 and $250 million in aggregate principal amount of 9.375% senior notes due 2017. The 2014 notes were priced at 98.465% of face value, resulting in a yield to maturity of 9.l25%. The 2017 notes were priced at 98.582% of face value, resulting in a yield to maturity of 9.625%. On or after November 15, 2013, the 2017 notes may be redeemed or purchased by the company at the applicable redemption price (expressed as a percentage of the principal amount of the 2017 notes) plus accrued but unpaid interest thereon to the redemption date, if redeemed during the 12-month period commencing on November 15 of the following years: 2013 – 104.688%, 2014 – 102.344% and 2015 and thereafter 100.000%. The company used the net proceeds from the offering to partially repay borrowings outstanding under its revolving credit agreements and term loan. In May 2009, the company completed a private exchange offer related to its 5.75% fixed rate notes due June 2011 and its 6.375% fixed rate notes due April 2012. The company exchanged approximately $67 million in principal amount of its 2011 notes for approximately $67 million principal amount of new 10% senior notes due 2015, and approximately $193 million in principal amount of its 2012 notes for approximately $193 million principal amount of new 10% senior notes due 2016. In connection with the May 2009 exchange transactions and in accordance with the modifications and extinguishments requirements of ASC Topic 470, “Debt,” the company recorded a gain of approximately $42.7 million which was classified in “Other non-operating items” in the Statement of Income for the second quarter of 2009. This gain resulted from recording the notes at fair value as of the time of the exchange and extinguishing the old notes at their historical book values. Fair value of the notes was based on their trading prices on and shortly after the exchange date. The discount created by recording the notes at fair value instead of face value is being amortized over the term of the notes to interest expense. The notes issued during 2010 and 2009 with maturity dates in 2014 and thereafter were made available in private offerings that were exempt from the registration requirements of the Securities Act of 1933. These notes are guaranteed on a senior basis by the subsidiaries of the company that guarantee its revolving credit and term loan agreements discussed more fully below. The company’s three revolving credit agreements require the company to maintain a senior leverage ratio of less than 3.5x. The agreements also require the company to maintain a total leverage ratio of less than 4.0x. The total leverage ratio would also include any subordinated debt the company may issue in the future. Currently, all of the company’s debt is senior and unsecured. At Dec. 25, 2011, the senior leverage ratio was 1.67x. Until March 15, 2012, commitment fees for the revolving credit agreements may range from 0.125% to 0.25% depending on credit ratings for the company’s senior unsecured debt from Moody’s Investor Services (Moody’s) and Standard & Poor’s (S&P). The rate currently in effect is 0.25%. After March 15, 2012, commitment fees will equal 0.50% of the undrawn commitments. In addition, the company pays a fee to the lenders that agreed in September 2010 to extend their commitments from 2012 to 2014 based on the leverage ratio that ranges from 0 to 75 basis points for drawn amounts and 25 basis points for undrawn amounts. At the current leverage ratio, the additional fee is 25 basis points for undrawn amounts but 0 basis points for drawn amounts. No extension fees are payable after March 15, 2012 on either drawn or undrawn amounts. Under each of the agreements, the company may borrow at an applicable margin above the Eurodollar base rate or the higher of the Prime Rate or the Federal Funds Effective Rate plus 0.50%. Until March 15, 2012, the applicable margin for such borrowings ranges from 1.00% to 2.25% depending on credit ratings. At its current ratings the company will pay an applicable margin of 2.25% under each of the revolving credit agreements. After March 15, 2012, the applicable margin will be determined based on the company’s leverage ratio but will differ between Eurodollar base rate loans and loans based on the higher of the Prime Rate or the Federal Funds Effective Rate plus 0.50%. For borrowings at a margin above the Eurodollar base rate, the margin will vary from 2.00% to 3.25%. For borrowings at a margin above the higher of the Prime Rate or the Federal Funds Effective Rate plus 0.50%, the margin will vary from 1.00% to 2.25%. At its current leverage ratios, the company anticipates that the applicable margins will be 2.25% and 1.25%, respectively, when the new pricing takes effect. In connection with each of its three revolving credit agreements and its then outstanding loan agreement, the company agreed to provide guarantees from a majority of its domestic wholly-owned subsidiaries in the event that the company’s credit ratings from either Moody’s or S&P fell below investment grade. In the first quarter of 2009, the company’s credit rating was downgraded below investment grade by both S&P and Moody’s. Accordingly, the guarantees were triggered and the existing notes due 2011 and 2012 and other unsecured debt of the company became structurally subordinated to the revolving credit agreements and the term loan. In September 2009, the company further amended the terms of its three revolving credit agreements and its term loan agreement to provide for the issuance of up to $500 million of additional long-term debt carrying the same guarantees put in place for the revolving credit agreements and term loan. In addition, the company also amended one of the credit agreements to permit it to obtain up to $100 million of letters of credit from the lenders, which would count toward their commitments. On Aug. 21, 2009, Moody’s confirmed the company’s Ba1 corporate family rating and its Ba2 senior unsecured note rating. In addition, Moody’s rated the company’s bank debt, which includes its revolving credit agreements and term loan, Baa3. The Baa3 rating also applies to most of the company’s long-term debt which has the same subsidiary guarantees as the bank debt. The company’s debt is rated BB by Standard and Poor’s. In August 2010, the company further amended the terms of its three revolving credit agreements and its term loan agreement to allow for the issuance of up to $750 million of additional long-term debt carrying the same guarantees put in place for the revolving credit agreements and term loan. As of Dec. 25, 2011, the company had $235 million of borrowings under its revolving credit agreements. The maximum amount outstanding at the end of any period during 2011 and 2010 was $0.5 billion and $1.3 billion, respectively. The daily average outstanding balance of the revolving credit agreements during 2011 and 2010 was $257 million and $852 million, respectively. The weighted average interest rate for 2011 and 2010 was 2.6%. During the first quarter of 2009, the company repurchased $68.8 million in principal amount of its floating rate notes due in May 2009 in privately negotiated transactions at a discount. In connection with these transactions, the company recorded a gain of approximately $1.1 million which is classified in “Other non-operating items” in the Statement of Income. This gain is net of $0.6 million reclassified from accumulated other comprehensive loss for related interest rate swap agreements. The company has an effective universal shelf registration statement under which an unspecified amount of securities may be issued, subject to a $7 billion limit established by the Board of Directors. Proceeds from the sale of such securities may be used for general corporate purposes, including capital expenditures, working capital, securities repurchase programs, repayment of debt and financing of acquisitions. The company may also invest borrowed funds that are not required for other purposes in short-term marketable securities. The following schedule of annual maturities of long-term debt assumes the company uses available capacity under its revolving credit agreements to refinance the unsecured fixed rate notes due in 2012. Based on this refinancing assumption, all of the obligations are reflected as maturities for 2014 and beyond.
|  |  | September 30, |
In thousands of dollars |  |  |
2012 (1) |  | $ | — |
2013 |  |  | — |
2014 (2) |  |  | 789,143 |
2015 |  |  | 307,517 |
2016 |  |  | 169,775 |
2017 |  |  | 247,168 |
2018 |  |  | 246,760 |
Total |  | $ | 1,760,363 |
(1) | Notes due of $307 million in 2012 are assumed to be repaid with funds from revolving credit agreements.
(2) | Notes due of $247 million plus $542 million deemed due under the revolving credit agreements.
Notwithstanding the assumptions used in the table above, the company’s debt maturities may also be repaid with cash flow from operating activities or by accessing capital markets or a combination of both. The fair value of the company’s total long-term debt, determined based on the bid and ask quotes for the related debt, totaled $1.9 billion and $2.5 billion at Dec. 25, 2011 and Dec. 26, 2010, respectively.

X
- 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
Name: | us-gaap_LongTermDebtTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration