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Debt | 12 Months Ended
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Dec. 31, 2017
Debt Disclosure [Abstract] |
Debt | Note 6 — Debt Credit Agreement The Company, together with certain direct and indirect subsidiaries, have an outstanding credit agreement (the “Credit Agreement”) with a consortium of lenders and Bank of America, N.A., as administrative agent. The Credit Agreement provides the Company a revolving credit note (“U.S. Revolving Note”) with a maximum borrowing capacity of $350,000. All subsidiary borrowers and guarantors participating in the Credit Agreement have entered into a related pledge and security agreement. The security agreement grants a security interest to the lenders in substantially all of the personal property of subsidiaries designated as borrowers to secure their respective obligations under the Credit Agreement, including stock and membership interest of specified subsidiaries (limited to 66% of the stock in case of certain non-U.S. subsidiaries). The Credit Agreement restricts the amount of dividend payments the Company can make to shareholders. The Credit Agreement requires the Company to maintain a minimum Consolidated Interest Coverage Ratio and a Consolidated Leverage Ratio. Definitions for these financial ratios are provided in the Credit Agreement. Under the Credit Agreement, U.S. Dollar denominated loans bear interest at either a base rate (“Base Rate Loans”) or Eurocurrency rate (“Eurocurrency Rate Loans”), plus a margin (“Applicable Rate”). The base rate is equal to the highest of the Federal Funds Rate (1.33% at December 31, 2017) plus 0.50%, Bank of America’s prime rate (4.50% at December 31, 2017), or a one month Eurocurrency rate (0.00% at December 31, 2017) plus 1.00%. The Eurocurrency rate for loans denominated in U.S. Dollars is equal to the London Interbank Offered Rate (1.56% at December 31, 2017). All loans denominated in a currency other than the U.S. Dollar must be Eurocurrency Rate Loans. Interest is payable at least quarterly. The Applicable Rate varies based on the Consolidated Leverage Ratio reported by the Company. As long as the Company is not in default of the terms and conditions of the Credit Agreement, the lowest and highest possible Applicable Rate is 1.25% and 2.00%, respectively, for Eurocurrency Rate Loans and 0.25% and 1.00%, respectively, for Base Rate Loans. The Company also has two fixed interest rate loans with the German Investment Corporation (“DEG”), a subsidiary of KfW banking group, a German government-owned development bank. DEG China Loan The first, a loan we used to fund capital investments in China (the “DEG China Loan”), is subject to semi-annual principal payments that began March, 2015 and end September, 2019. Under the terms of the DEG China Loan, the Company must maintain a minimum Debt-to-Equity Ratio, Current Ratio and Debt Service Coverage Ratio, as defined by the DEG China Loan agreement, based on the financial statements of Gentherm’s wholly owned subsidiary, Gentherm Automotive Systems (China) Ltd. Note 6 — Debt (Continued) DEG Vietnam Loan The Company’s second fixed interest rate senior loan agreement with DEG was used to finance the construction and set up of the Vietnam production facility (“DEG Vietnam Loan”). The DEG Vietnam Loan is subject to semi-annual principal payments that began November, 2017 and will end May, 2023. Under the terms of the DEG Vietnam Loan, the Company must maintain a minimum Currency Ratio, Equity Ratio and Enhanced Equity Ratio, as defined by the DEG Vietnam Loan agreement, based on the financial statements of Gentherm’s wholly owned subsidiary, Gentherm Vietnam Co. Ltd. As of December 31, 2017, we were in compliance with all terms as outlined in the Credit Agreement, DEG China Loan and DEG Vietnam Loan. Undrawn borrowing capacity under the U.S. Revolving Note was $220,859 as of December 31, 2017. The following table summarizes the Company’s debt at December 31, 2017.
| Interest Rate |  |  | Principal Balance |
Credit Agreement: |  |  |  |  |  |  |
U.S. Revolving Note (U.S. Dollar Denominations) |  | 3.07 | % |  | $ | 129,000 |
DEG China Loan |  | 4.25 | % |  |  | 1,919 |
DEG Vietnam Loan |  | 5.21 | % |  |  | 13,750 |
Total debt |  |  |  |  | $ | 144,669 |
Current portion |  |  |  |  |  | (3,460 | )
Long-term debt, less current maturities |  |  |  |  | $ | 141,209 |
The following table summarizes the Company’s debt at December 31, 2016.
| Interest Rate |  |  | Principal Balance |
Credit Agreements: |  |  |  |  |  |  |
U.S. Revolving Note (U.S. Dollar Denominations) |  | 2.27 | % |  |  | 154,000 |
DEG China Loan |  | 4.25 | % |  |  | 2,525 |
DEG Vietnam Loan |  | 5.21 | % |  |  | 15,000 |
Total debt |  |  |  |  | $ | 171,525 |
Current portion |  |  |  |  |  | (2,092 | )
Long-term debt, less current maturities |  |  |  |  | $ | 169,433 |
The scheduled principal maturities of our debt as of December 31, 2017 is as follows:
Year |  | U.S. Revolving Note |  |  | DEG China Loan |  |  | DEG Vietnam Loan |  |  | Total |
2018 |  | $ | — |  |  | $ | 960 |  |  | $ | 2,500 |  |  | $ | 3,460 |
2019 |  |  | — |  |  |  | 959 |  |  |  | 2,500 |  |  |  | 3,459 |
2020 |  |  | — |  |  |  | — |  |  |  | 2,500 |  |  |  | 2,500 |
2021 |  |  | 129,000 |  |  |  | — |  |  |  | 2,500 |  |  |  | 131,500 |
2022 |  |  | — |  |  |  | — |  |  |  | 2,500 |  |  |  | 2,500 |
Thereafter |  |  | — |  |  |  | — |  |  |  | 1,250 |  |  |  | 1,250 |
Total |  | $ | 129,000 |  |  | $ | 1,919 |  |  | $ | 13,750 |  |  | $ | 144,669 |

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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 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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