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Debt | 6 Months Ended
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Jun. 30, 2011
Debt Disclosure Abstract |
Debt Disclosure Text Block | 7. LONG-TERM DEBT (A) Senior Debt Credit Agreement (the "Bank Facility") T he Company has a $1,050 million senior secured credit facility with a syndicate of lenders (in excess of 50 lenders as of June 30, 2011) that matures on June 30, 2012. The Bank Facility was originally comprised of $650 million in revolving credit (the "Revolver") and a $400 million term loan (the "Term Loan"). The Term Loan amortizes in quarterly amounts, which payments started at $15 million and increase from $25 million to $60 million on September 30, 2011. The Company plans to continue to fund the amortization of the Term Loan with cash flow from operations and its available Revolver capacity. As of June 30, 2011, the Company had outstanding under the Bank Facility $625.0 million, including: (i) $387.5 million in drawn Revolver; and (i i) $237.5 million in Term Loan. As of June 30, 2011, the Company had $2.0 million in cash and cash equivalents. As of June 30, 2011, the undrawn amount of the Revolver was $261.9 million. The amount of the Revolver available to the Company, however, is a function of covenant compliance at the time of borrowing. Based on the Company's financial covenant analysis as of June 30, 2011, the Company would be limited to borrowings significantly less than the undrawn limit unless such borrowings were used to repay indebtedness or for transactions that increase cash flow for purposes of covenant calculation. The Company's ability to maintain compliance with its covenants is highly dependent on the Company's results of operations. If the Company were to enter into an agreement with its lenders for covenant compliance relief, such relief could result in higher interest expense. Refinancing the Company's Bank Facility and/or obtaining other funding prior to the expiration of the current agreement will be essential since the Revolver balance outstanding, together with the final $60.0 million Term Loan installment, will be due in full upon the maturity of the Bank Facility on June 30, 2012. In the event the Company is not successful in refinancing the Bank Facility and/or obtaining other funding prior to the maturity of the current agreement, the Company would not have the resources to fund these obligations on June 30, 2012, which could have a material adverse effect on the Company's business. As of June 30, 2011, the Company reclassified all of its debt outstanding under the Bank Facility from long-term to short-term. Management believes that the Company can continue to maintain its compliance with these covenants until maturity of the Bank Facility on June 30, 2012. Management also believes that cash on hand and cash from operating activities, together with available borrowings under the Revolver, will be sufficient to permit the Company to meet its liquidity requirements until the maturity of the Bank Facility, including the Company's scheduled Term Loan amortization. The Company's operating cash flow remains positive and m anagement believes that it is adequate to fund the Company's operating needs. As a result, the Company has not been required to rely upon, and the Company does not anticipate being required to rely upon, the Revolver to fund the Company's operations. Amendment To The Bank Facility On March 11, 2010, the Company amended its Bank Facility (the "Amendment"). The Company is required to maintain certain financial covenants which are defined terms with in the agreement, including: (i) a maximum Consolidated Leverage Ratio that decreases quarterly in 2011, with a ratio of 6.5 times as of June 30, 2011 to a ratio that will not exceed 6.0 times as of December 31, 2011 and thereafter; and (ii) a minimum ratio of Consolidated Operating Cash Flow to Consolidated Interest Charges of 2.0 times. Management believes the Company is in compliance with all financial covenants and all other terms of the Bank Facility as of June 30, 2011. C ertain key terms as defined within the Bank Facility were revised in this Amendment as follows: Depending on the Consolidated Leverage Ratio (Consolidated Funded Indebtedness to Consolidated Operating Cash Flow), the Company may elect an interest rate equal to: (1) the Eurodollar Rate plus fees that can range from 0.5% to 2.5%; or (2) the Base Rate plus fees that can range from 0.0% to 1.5%, where the Base Rate is the highest of: (a) the Federal Funds Rate plus 0.5%; (b) the Eurodollar Rate plus 1.0%; or (c) the Prime Rate. During periods when the Consolidated Leverage Ratio exceeds 6.0 times (defined in the Bank Facility as a "Restricted Period"), the Company is: (a) restricted in its ability to take certain action s, including but not limited to, the payment of dividends and the repurchase of its stock; and (b) subject to additional limitations on acquisitions and investments. As of June 30, 2011, the Consolidated Leverage Ratio was less than six times. The Company pays a commitment fee that varies, depending on the Company's Consolidated Leverage Ratio and the amount of the unused commitment, up to a maximum of 0.50% per year on the average unused balance of the Revolver. The Bank Facility is secured by a pledge of 100% of the capital stock and other equity interest in all of the Company's wholly owned subsidiaries. In addition, the Bank Facility is secured by a lien on all of the Company's assets, other than real property. T he Amendment was treated as a modification to a debt instrument. As a result, in the first quarter of 2010, the Company recorded deferred financing costs of $5.2 million related to the A mendment which will be amortized over the remaining life of the Bank Facility on: (1) a straight-line basis for the Revolver; and (2) an effective interest rate method for the Term. In addition, unamortized deferred financing costs of $3.1 million as of the Amendment date will continue to be amortized over the remaining life of the Bank Facility. Prior to the Amendment, the interest rate on the Company's Bank Facility was: (i) the Eurodollar rate plus a rate that ranges from 0.50% to 1.13%; or (ii) the greater of prime rate plus a rate that ranges from 0.0% to 0.13% or the federal funds rate plus a rate that ranges from 0.50% to 0.63%. (B) 7.625% Senior Subordinated Notes (the "Notes") The following table presents for the periods indicated: (1) the amount of gain or loss recorded on the extinguishment of the Notes; and (2) the amount of Notes retired:
|  | For the Six
|  | Months Ended
|  | June 30,
|  | 2010
|  | (amounts in
|  | thousands)
Write-off of deferred financing costs |  | $ | 62
Gain on debt extinguishment |  |  | -
Net (gain) loss on debt extinguishment |  | $ | 62
Amount of Notes retired |  | $ | 6,579
On March 8, 2010, the Company redeemed at par all of its remaining outstanding senior subordinated notes that were due March 1, 2014 and recorded in the statement of operations a loss on the extinguishment of debt.

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- Definition 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, 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 SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 + Details
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