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Financing Arrangements | 3 Months Ended
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Aug. 31, 2012
Financing Arrangements |
Financing Arrangements |
Note 6 — Financing Arrangements A summary of the carrying amount of our debt is as follows:
|  | August 31, |  | May 31, |
|  | 2012 |  | 2012 |
Revolving credit facility expiring April 12, 2016 with interest payable monthly |  | $ | 300.0 |  | $ | 280.0 |
Revolving credit facility (secured by aircraft and related engines and components) due April 23, 2015 with floating interest rate, payable monthly |  | 31.2 |  | 33.0 |
Revolving credit facility subject to annual review in March with interest payable quarterly |  | 0.6 |  | 0.6 |
Note payable due July 19, 2012 with interest at 7.22%, payable monthly |  | — |  | 8.4 |
Note payable due March 15, 2014 with floating interest rate, payable monthly |  | 2.2 |  | 2.6 |
Note payable due March 9, 2017 with floating interest rate, payable semi-annually on June 1 and December 1 |  | 45.0 |  | 50.0 |
Note payable due January 15, 2022 with interest at 7.25% payable semi-annually on January 15 and July 15 |  | 172.1 |  | 172.1 |
Mortgage loan (secured by Wood Dale, Illinois facility) due August 1, 2015 with interest at 5.01% |  | 11.0 |  | 11.0 |
Convertible notes payable due March 1, 2014 with interest at 1.625% payable semi-annually on March 1 and September 1 |  | 69.4 |  | 68.5 |
Convertible notes payable due March 1, 2016 with interest at 2.25% payable semi-annually on March 1 and September 1 |  | 42.4 |  | 46.1 |
Convertible notes payable due February 1, 2026 with interest at 1.75% payable semi-annually on February 1 and August 1 |  | 88.7 |  | 94.9 |
Industrial revenue bond (secured by trust indenture on property, plant and equipment) due August 1, 2018 with floating interest rate, payable monthly |  | 25.0 |  | 25.0 |
Total debt |  | 787.6 |  | 792.2 |
Current maturities of debt |  | (108.2 | ) | (122.8 | )
Long-term debt |  | $ | 679.4 |  | $ | 669.4 |
During the three-month period ended August 31, 2012, we repurchased $5.0 million par value of our 2.25% convertible notes due March 1, 2016 and $8.0 million par value of our 1.75% convertible notes due February 1, 2026. The 2.25% notes were repurchased for $4.4 million cash and the 1.75% notes were repurchased for $7.9 million cash, with a total loss of $0.2 million, after consideration of unamortized discount and debt issuance costs. The losses on the debt repurchases for the 2.25% and 1.75% convertible notes are recorded in Loss on extinguishment of debt on the condensed consolidated statements of income. At August 31, 2012, the face value of our debt was $806.3 million and the estimated fair value was approximately $799.1 million. The fair value amounts of our long-term debt securities are estimated using significant other observable inputs including quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. This debt is classified as Level 2 in the fair value hierarchy. We are subject to a number of covenants under our financing arrangements, including restrictions which relate to the payment of cash dividends, maintenance of minimum net working capital and tangible net worth levels, fixed charge coverage ratio, sales of assets, additional financing, purchase of our shares and other matters. We are in compliance with all financial covenants under our financing arrangements. Convertible Notes As of August 31, 2012 and May 31, 2012, the long-term debt and equity component (recorded in capital surplus, net of income tax benefit) consisted of the following:
|  | August 31, |  | May 31, |
|  | 2012 |  | 2012 |
Long-term debt: |  |  |  |  |
Principal amount |  | $ | 216.3 |  | $ | 229.3 |
Unamortized discount |  | (15.8 | ) | (19.8 | )
Net carrying amount |  | $ | 200.5 |  | $ | 209.5 |
Equity component, net of tax |  | $ | 74.8 |  | $ | 74.8 |
The discount on the liability component of long-term debt is being amortized using the effective interest method based on an effective rate of 8.48% for our 1.75% convertible notes; 6.82% for our 1.625% convertible notes and 7.41% for our 2.25% convertible notes. For our 1.75% convertible notes, the discount is being amortized through February 1, 2013, which is the first put date for those notes. For our 1.625% and 2.25% convertible notes, the discount is being amortized through their respective maturity dates of March 1, 2014 and March 1, 2016. As of August 31, 2012 and 2011, for each of our convertible note issuances, the “if converted” value does not exceed its principal amount. The interest expense associated with the convertible notes was as follows:
|  | Three Months Ended |
|  | August 31, |
|  | 2012 |  | 2011 |
Coupon interest |  | $ | 1.0 |  | $ | 1.2 |
Amortization of deferred financing fees |  | 0.2 |  | 0.2 |
Amortization of discount |  | 2.8 |  | 3.2 |
Interest expense related to convertible notes |  | $ | 4.0 |  | $ | 4.6 |

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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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