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LONG-TERM DEBT | 12 Months Ended
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Sep. 30, 2015
LONG-TERM DEBT [Abstract] |
LONG-TERM DEBT |
7. | LONG-TERM DEBT:
Long-term debt at September 30, 2015 and 2014 consisted of the following:
|  | 2015 |  |  | 2014 |
Revolving credit facilities |  | $ | 884,254 |  |  | $ | 702,055 |
Notes payable to banks |  |  | 8,506 |  |  |  | 13,315 |
Short-term borrowings |  |  | 5,199 |  |  |  | 6,410 |
Capital lease obligations |  |  | 4,995 |  |  |  | 7,475 |
|  |  | 902,954 |  |  |  | 729,255 |
Less current maturities |  |  | (11,737 | ) |  |  | (15,228 | )
|  | $ | 891,217 |  |  | $ | 714,027 |
The Company has a domestic Revolving Credit Facility with a syndicate of financial institutions. In connection with the acquisition of Schawk, Inc. ("Schawk") in July 2014, the Company entered into amendments to the Revolving Credit Facility to amend certain terms of the Revolving Credit Facility and increase the maximum amount of borrowings available under the facility from $500,000 to $900,000. Borrowings under the amended facility bear interest at LIBOR plus a factor ranging from .75% to 2.00% (1.75% at September 30, 2015) based on the Company's leverage ratio. The leverage ratio is defined as net indebtedness divided by EBITDA (earnings before interest, taxes, depreciation and amortization). The Company is required to pay an annual commitment fee ranging from .15% to .25% (based on the Company's leverage ratio) of the unused portion of the facility. The Revolving Credit Facility requires the Company to maintain certain leverage and interest coverage ratios. A portion of the facility (not to exceed $30,000) is available for the issuance of trade and standby letters of credit. Outstanding borrowings on the Revolving Credit Facility at September 30, 2015 and 2014 were $857,425 and $680,000, respectively. The weighted-average interest rate on outstanding borrowings at September 30, 2015 and 2014 was 2.41% and 2.53%, respectively. The Company has entered into the following interest rate swaps:
Effective Date | Amount | Fixed Interest Rate | Interest Rate Spread at September 30, 2015 | Maturity Date
October 2011 | $25,000 | 1.67% | 1.75% | October 2015
June 2012 | 40,000 | 1.88% | 1.75% | June 2022
August 2012 | 35,000 | 1.74% | 1.75% | June 2022
September 2012 | 25,000 | 3.03% | 1.75% | December 2015
September 2012 | 25,000 | 1.24% | 1.75% | March 2017
November 2012 | 25,000 | 1.33% | 1.75% | November 2015
May 2014 | 25,000 | 1.35% | 1.75% | May 2018
November 2014 | 25,000 | 1.26% | 1.75% | June 2018
March 2015 | 25,000 | 1.49% | 1.75% | March 2019
September 2015 | 25,000 | 1.39% | 1.75% | September 2020
December 2015 | 25,000 | 1.59% | 1.75% | December 2020
The Company enters into interest rate swaps in order to achieve a mix of fixed and variable rate debt that it deems appropriate. The interest rate swaps have been designated as cash flow hedges of the future variable interest payments under the Revolving Credit Facility which are considered probable of occurring. Based on the Company's assessment, all of the critical terms of each of the hedges matched the underlying terms of the hedged debt and related forecasted interest payments, and as such, these hedges were considered highly effective. The fair value of the interest rate swaps reflected an unrealized loss, net of unrealized gains, of $3,686 ($2,248 after tax) and an unrealized gain, net of unrealized losses, of $330 ($201 after tax) at September 30, 2015 and 2014, respectively, that is included in shareholders' equity as part of accumulated other comprehensive income ("AOCI"). Assuming market rates remain constant with the rates at September 30, 2015, a loss (net of tax) of approximately $711 included in AOCI is expected to be recognized in earnings over the next twelve months. At September 30, 2015 and 2014, the interest rate swap contracts were reflected on a gross-basis in the consolidated balance sheets as follows:
Derivatives |  | 2015 |  |  | 2014 |
Current assets |  |  |  |  |  |
Other current assets |  | $ | -- |  |  | $ | 324 |
Long-term assets |  |  |  |  |  |  |  |
Other assets |  |  | -- |  |  |  | 2,133 |
Current liabilities: |  |  |  |  |  |  |  |
Other current liabilities |  |  | (1,165 | ) |  |  | (1,808 | )
Long-term liabilities: |  |  |  |  |  |  |  |
Other liabilities |  |  | (2,521 | ) |  |  | (319 | )
Total derivatives |  | $ | (3,686 | ) |  | $ | 330 |
The loss recognized on derivatives was as follows:
| Location of | Amount of
Derivatives in | Loss | Loss
Cash Flow Hedging | Recognized in | Recognized in Income
Relationships | Income on Derivatives | on Derivatives
|  | 2015 | 2014
Interest rate swaps | Interest expense | $(3,922) | $(4,318)
The Company recognized the following losses in AOCI:
|  |  |  | Location of Gain |  | Amount of Loss |
|  |  |  | or (Loss) |  | Reclassified from |
Derivatives in |  | Amount of |  | Reclassified from |  | AOCI |
Cash Flow |  | Loss Recognized in |  | AOCI |  | into Income |
Hedging |  | AOCI on Derivatives |  | into Income |  | (Effective Portion*) |
Relationships |  | 2015 |  |  | 2014 |  | (Effective Portion*) |  | 2015 |  |  | 2014 |
Interest rate swaps |  |  | $(4,841) |  |  |  | $(1,879) |  | Interest expense |  |  | $(2,392) |  |  |  | $(2,634) |
*There is no ineffective portion or amount excluded from effectiveness testing. |
The Company, through certain of its European subsidiaries, has a credit facility with a European bank. The maximum amount of borrowings available under this facility is 35.0 million Euros ($39,255). Outstanding borrowings under the credit facility totaled 23.9 million Euros ($26,829) and 17.5 million Euros ($22,055) at September 30, 2015 and 2014, respectively. The weighted-average interest rate on outstanding borrowings under this facility at September 30, 2015 and 2014 was 1.50% and 1.35%, respectively. The Company, through its German subsidiary, Saueressig GmbH & Co. KG ("Saueressig"), has several loans with various European banks. Outstanding borrowings under these loans totaled 734,452 Euros ($824) and 1.2 million Euros ($1,576) at September 30, 2015 and 2014, respectively. The weighted-average interest rate on outstanding borrowings of Saueressig at September 30, 2015 and 2014 was 4.04% and 3.96%, respectively. The Company, through its German subsidiary, Wetzel GmbH ("Wetzel"), has several loans with various European banks. Outstanding borrowings under these loans totaled 1.9 million Euros ($2,110) and 2.9 million Euros ($3,624) at September 30, 2015 and 2014, respectively. The weighted-average interest rate on outstanding borrowings of Wetzel at September 30, 2015 and 2014 was 5.96% and 5.67%, respectively. The Company, through its wholly-owned subsidiary, Matthews International S.p.A., has several loans with various Italian banks. Outstanding borrowings on these loans totaled 4.3 million Euros ($4,772) and 5.5 million Euros ($6,922) at September 30, 2015 and 2014, respectively. Matthews International S.p.A. also has three lines of credit totaling 11.3 million Euros ($12,707) with the same Italian banks. Outstanding borrowings on these lines were 4.6 million Euros ($5,166) and 4.8 million Euros ($6,063) at September 30, 2015 and 2014, respectively. The weighted-average interest rate on outstanding Matthews International S.p.A. borrowings at September 30, 2015 and 2014 was 3.33% and 3.15%, respectively. In September 2014, a claim seeking to draw upon a letter of credit issued by the Company of $12,925 was filed with respect to a project for a customer. In January 2015, the Company made payment on the draw to the financial institution for the letter of credit. Pursuant to an action initiated by the Company, a court order has been issued requiring these funds to ultimately be remitted to the court pending resolution of the dispute between the parties. While it is possible the resolution of this matter could be unfavorable to the Company, management has assessed the customer's claim to be without merit and, based on information available as of this filing, expects that the ultimate resolution of this matter will not have a material adverse effect on Matthews' financial condition, results of operations or cash flows. As of September 30, 2015, the Company has presented the funded letter of credit within other current assets on the Consolidated Balance Sheet. As of September 30, 2015 and 2014, the fair value of the Company's long-term debt, including current maturities, which is classified as Level 2 in the fair value hierarchy, approximated the carrying value included in the Consolidated Balance Sheets. Aggregate maturities of long-term debt, including short-term borrowings and capital leases, follows:
2016 |  | $ | 11,737 |
2017 |  |  | 29,979 |
2018 |  |  | 857,974 |
2019 |  |  | 212 |
2020 |  |  | 222 |
Thereafter |  |  | 2,830 |
|  | $ | 902,954 |

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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 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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