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Debt | 12 Months Ended
--- | ---
Dec. 31, 2011
Debt [Abstract] |
Debt |
7) | Debt
Long-term debt at December 31, 2011 and 2010 consisted of the following:
|  | 2011 |  |  | 2010 |
Borrowings under our $100,000 revolving credit facility bearing interest at a floating rate equal to LIBOR (0.30% at December 31, 2011) plus an applicable margin of 3.00%, expiring December 21, 2014. |  | $ | 40,989 |  |  | $ | 50,500 |
Borrowings under our $40,000 aggregate principal amount of senior notes bearing interest at a fixed rate of 5.39% maturing on April 26, 2014. Annual principal payments of $5,714 began on April 26, 2008 and extend through the date of maturity. |  |  | 17,143 |  |  |  | 22,857 |
Borrowings under our $20,000 aggregate principal amount of senior notes bearing interest at a fixed rate of 4.64% maturing on December 20, 2018. Annual principal payments of $4,000 will begin on December 22, 2014 and extend through the date of maturity. |  |  | 20,000 |  |  |  | — |
Total long-term debt |  |  | 78,132 |  |  |  | 73,357 |
Less current maturities of long-term debt |  |  | 6,503 |  |  |  | 5,714 |
Long-term debt, excluding current maturities |  | $ | 71,629 |  |  | $ | 67,643 |
On December 20, 2011, we borrowed an additional $20,000 in seven-year fixed rate notes from Prudential Capital at a rate of 4.64%. These notes, which mature on December 20, 2018, are interest-only for the first two years followed by five equal annual principal payments. The proceeds were used to repay existing revolving credit bank debt and to fund growth capital projects. Prudential Capital also agreed to reduce the rate on the Company’s existing $17,143 of fixed rate notes due in 2014 from 6.50% to 5.39%. On September 30, 2011, NN amended its $100,000 revolving credit agreement agented by KeyBank and its long-term loan agreement with Prudential Capital in order to adjust the fixed charge coverage ratio covenant to better correlate current and expected levels of capital spending and other fixed charges with earnings before taxes, interest and depreciation (EBITDA). The fixed charge coverage ratio was reduced from not less than 1.10 to 1.00 and not less than 1.25 to 1.00 (for quarters ending after September 30, 2011) to “not to be less than 1.00 to 1.00 as of the last day of any fiscal quarter” for the quarters ending September 30, 2011 through September 30, 2012. Starting October 1, 2012, the fixed charge coverage ratio increases to “not to be less than 1.25 to 1.00 as of the last day of any fiscal quarter”. The amendments also provide that the company will assure that the total outstanding under the revolving credit agreement shall be at least $10,000 less than the total committed amount of $100,000 during the period commencing September 30, 2011 and ending on September 30, 2012. On December 21, 2010, we entered into an amended and restated revolving credit facility expiring December 21, 2014 with Key Bank as administrative agent with an initial size of $75,000. The amended agreement was entered into to adjust our financial and non-financial covenants to more normalized measures and to provide greater ability to fund our capital investment plans. The interest rate was amended to LIBOR plus a margin of 1.5% to 3.5% (depending on the level of the ratio of debt to EBITDA) from LIBOR plus a margin of 4.75%. The facility may be expanded upon our request with approval of the lenders by up to $60,000, under the same terms and conditions. On March 9, 2011, we exercised an option to increase the size of the facility from $75,000 to $100,000 to allow additional flexibility and to fund potential growth projects. The loan agreement contains customary restrictions on, among other things, additional indebtedness, liens on our assets, sales or transfers of assets, investments, restricted payments (including payment of dividends and stock repurchases), issuance of equity securities, and merger, acquisition and other fundamental changes in our business including a “material adverse change” clause, which if triggered would accelerate the maturity of the debt. The facility has a $10,000 swing line feature to meet short term cash flow needs. Any borrowings under this swing line are considered short term. Costs associated with entering into the revolving credit facility and the subsequent September 30, 2011 amendment were capitalized and will be amortized into interest expense over the life of the facility. As of December 31, 2011 and 2010, $1,761 and $1,978, respectively, of net capitalized loan origination costs related to the revolving credit facility were recorded on the consolidated balance sheet within other non-current assets. On December 21, 2010, our senior notes agreement with Prudential Capital was also amended. The amended agreement was entered into to adjust our financial and non-financial covenants to more normalized measures. There were no changes to the terms or availability of credit but the interest rate was reduced from 8.50% to 6.70%. The agreement contains customary restrictions on, among other things, additional indebtedness, liens on our assets, sales or transfers of assets, investments, restricted payments (including payment of dividends and stock repurchases), issuance of equity securities, and mergers, acquisitions and other fundamental changes in our business including a “material adverse change” clause, which if triggered would accelerate the maturity of the debt. Interest is paid semi-annually and the notes mature on April 26, 2014. Annual principal payments of approximately $5,714 began on April 26, 2008 and extend through the date of maturity. We incurred costs as a result of issuing these notes and the subsequent September 30, 2011 and December 20, 2011 amendments which have been recorded as a component of other non-current assets and are being amortized over the term of the notes. The unamortized balance at December 31, 2011 and 2010 was $290 and $428, respectively. The aggregate maturities of long-term debt including current portion for each of the five years subsequent to December 31, 2011 are as follows:
Year ending December 31, |
2012 |  | $ | 6,503 |
2013 |  |  | 5,715 |
2014 |  |  | 49,914 |
2015 |  |  | 4,000 |
2016 |  |  | 4,000 |
Thereafter |  |  | 8,000 |
Total |  | $ | 78,132 |
On June 1, 2004, our wholly owned subsidiary, NN Asia, entered into a twenty year lease agreement with Kunshan Tian Li Steel Structure Co. LTD for the lease of land and building (approximately 110,000 square feet) in the Kunshan Economic and Technology Development Zone, Jiangsu, The People’s Republic of China. The fair value of the land and building were estimated to be approximately $520 and $1,930 (at current exchange rates), respectively and undiscounted annual lease payments are approximately $287 (approximately $5,700 aggregate non-discounted lease payments over the twenty year term). The lease is cancelable after the fifth, ninth, and fourteenth years without payment or penalty by us. In addition, after the end of year five and each succeeding year we can buy the land for a preset price per square meter value and the building for actual cost less depreciation. On October 1, 2011, our wholly owned subsidiary, NN Asia, entered into a twenty year lease agreement with Kunshan Tian Li Steel Structure Co. LTD for the lease of land and building adjacent to the current leased facility (approximately 75,000 square feet) in the Kunshan Economic and Technology Development Zone, Jiangsu, The People’s Republic of China. This lease was entered into to expand the production capacity of our current leased facility. The fair value of the land and building were estimated to be approximately $854 and $1,107 (at current exchange rates), respectively and undiscounted annual lease payments are approximately $185 (approximately $3,700 aggregate non-discounted lease payments over the twenty year term). The lease is cancelable after the fifth, ninth, and fourteenth years without payment or penalty by us. In addition, after the end of year five and each succeeding year we can buy the land for a preset price per square meter value and the building for actual cost less depreciation. Below are the minimum future lease payments under both capital leases together with the present value of the net minimum lease payments as of December 31, 2011:
Year ending December 31, |
2012 |  | $ | 472 |
2013 |  |  | 472 |
2014 |  |  | 472 |
2015 |  |  | 472 |
2016 |  |  | 472 |
Thereafter |  |  | 5,246 |
Total minimum lease payments |  |  | 7,606 |
Less interest included in payments above |  |  | (3,534 | )
Present value of minimum lease payments |  | $ | 4,072 |

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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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