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DEBT: | 12 Months Ended
--- | ---
Sep. 30, 2012
DEBT: |
DEBT: |
8. DEBT: The Company primarily finances its operations through a credit facility agreement with Bank of America (the "Facility") and long-term debt agreements with banks. CREDIT FACILITY
|  | 2012 |  | 2011 |
--- | --- | --- | --- | --- | ---
Revolving portion of the Facility, interest payable at 2.37% at September 2012 |  | $ | 14,353,732 |  | $ | 20,771,613 |
The Facility included the following significant terms at September 2012: • April 2014 maturity date and a $70.0 million revolving credit limit. • Loan accordion allowing the Company to increase the size of the credit facility agreement by $25.0 million. • A provision providing an additional $5.0 million of credit advances for certain inventory purchases. • Evergreen renewal clause automatically renewing the agreement for one year unless either the borrower or lender provides written notice terminating the agreement at least 90 days prior to the end of the original term of the agreement or the end of any renewal period. • Prepayment penalty equal to one-half of one percent (1/2%) if the Company prepays the entire Facility or terminates it in year one of the agreement, and one-fourth of one percent (1/4%) if the Company prepays the entire Facility or terminates it in year two of the agreement. The prepayment penalty is calculated based on the maximum loan limit. • The Facility bears interest at either the bank's prime rate, or at LIBOR plus 175 basis points, at the election of the Company. • Lending limits subject to accounts receivable and inventory limitations. • An unused commitment fee equal to one-quarter of one percent (1/4%) per annum on the difference between the maximum loan limit and average monthly borrowings. • Secured by collateral including all of the Company's equipment, intangibles, inventories, and accounts receivable. • Provides that the Company may not pay dividends on its common stock in excess of $1.00 per share on an annual basis. • A financial covenant requiring a fixed charge coverage ratio of at least 1.1 as measured by the previous twelve month period then ended only if excess availability falls below 10% of the maximum loan limit as defined in the credit agreement. LONG-TERM DEBT In addition to the Facility, the Company also had the following long-term obligations at fiscal 2012 and fiscal 2011 as follows:
|  | 2012 |  | 2011 |
--- | --- | --- | --- | --- | ---
Note payable to a bank ("Real Estate Loan"), interest payable at a fixed rate of 2.99% with monthly installments of principal and interest of $38,344 through June 2017 with remaining principal due July 2017, collateralized by three distribution facilities |  | $ | 4,729,031 |  | $ | — |
Note payable to a bank ("Real Estate Loan"), interest payable at a fixed rate of 6.75% with monthly installments of principal and interest of $58,303 through May 2013 with remaining principal due June 2013, collateralized by two owned distribution facilities(1) |  |  | — |  |  | 4,448,486 |
Note payable to a bank, interest payable monthly at a fixed rate of 5.21% plus monthly principal payments of $4,237 through December 2012 at which time the remaining principal is due, collateralized by the Rapid City building and equipment(1) |  |  | — |  |  | 673,630 |
Note payable, interest payable at a fixed rate of 4.00%, with quarterly installments of principal and interest of $226,874 through June 2014 |  |  | 1,526,821 |  |  | 2,352,234 |
Note payable, interest payable at a fixed rate of 5.00%, with quarterly installments of principal and interest of $66,067 through October 2011 |  |  | — |  |  | 63,092 |
Obligation payable, interest payable at a fixed rate of 4.96% with monthly installments of principal and interest of $448, through April 2013 |  |  | 2,657 |  |  | 10,764 |
Note payable, interest payable discounted at a rate of 8.25% with quarterly installments of principal and interest of $31,250 - $46,875 through October 2011 |  |  | — |  |  | 30,614 |
|  |  | 6,258,509 |  |  | 7,578,820 |
Less current maturities |  |  | 1,182,829 |  |  | 1,384,625 |
|  | $ | 5,075,680 |  | $ | 6,194,195 |
(1) Note payable was refinanced during fiscal 2012 into the Real Estate Note due in July 2017. The aggregate minimum principal maturities of the long-term debt for each of the five fiscal years following September 2012 are as follows:
Fiscal Year Ending |  |  |
--- | --- | --- | ---
2013 |  | $ | 1,182,829 |
2014 |  |  | 998,787 |
2015 |  |  | 341,191 |
2016 |  |  | 351,383 |
2017 |  |  | 3,384,319 |
|  | $ | 6,258,509 |
Market rate risk for fixed rate debt is estimated as the potential increase in fair value of debt obligations resulting from decreases in interest rates. Based on the borrowing rates currently available to the Company for bank loans with similar terms and average maturities, the fair value of the Company's long-term debt approximated its carrying value at September 2012. Cross Default and Co-Terminus Provisions The Company's owned real estate in Bismarck, ND, Quincy, IL, and Rapid City, SD, is financed through a term loan with BMO Harris, NA ("BMO") which is also a participant lender on the Company's revolving line of credit. The BMO loan contains cross default provisions which cause the loan with BMO to be considered in default if the loans where BMO is a lender, including the revolving credit facility, is in default. There were no such cross defaults at September 2012. In addition, the BMO loan contain co-terminus provisions which require all loans with BMO to be paid in full if any of the loans are paid in full prior to the end of their specified terms. Other AMCON has issued a letter of credit in the amount of approximately $0.4 million to its workers' compensation insurance carrier as part of its self-insured loss control program.

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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 Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 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 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. + Details
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