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LONG-TERM DEBT (Block) | 9 Months Ended
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Sep. 30, 2012
Debt Disclosure [Abstract] |
Debt Disclosure Text Block | 4. LONG-TERM DEBT (A) Senior Debt The Credit Facility On November 23, 2011, the Company entered into a new credit agreement with a syndicate of lenders for a $425 million senior secured credit facility (the “Credit Facility”), that is comprised of: (a) a $50 million revolving credit facility (the “Revolver”) that matures on November 23, 2016; and (b) a $375 million term loan (the “Term B Loan”) that matures on November 23, 2018. As of September 30, 2012, the amount outstanding under the Revolver was $16.0 million and the amount outstanding under the Term B Loan was $353.5 million. T he undrawn amount of the Revolver was $33.4 million as of September 30, 2012. The amount of the Revolver available to the Company is a function of covenant compliance at the time of borrowing. The Term B Loan requires mandatory prepayments equal to 50% of Excess Cash Flow, as defined within the agreement, subject to incremental step-downs to 0%, de pending on the Consolidated Leverage Ratio. T he Excess Cash Flow payment is due in the first quarter of each year and the amount of the payment is based on the Excess Cash Flow and Leverage Ratio for the prior year. The Company estimates that the Excess Cash Flow payment will be approximately $11 million, which is net of prepayments made through September 30, 2012, and is due in the first quarter of 2013. This amount was classified under the current portion of long-term debt. The amount of the Excess Cash Flow prepayment required is subject to change based on actual results, which could differ materially from the Company's f inancial projections as of September 30, 2012. The Company expects to fund the payment using cash from operating activities. A s of September 30, 2012, the Company is in compliance with all financial covenants and all other terms of the Credit Facility in all material respects. The Company's ability to maintain compliance with its covenants is highly dependent on its results of operations. Ma nagement believes that over the next 12 months the Company can continue to maintain compliance. Management 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 over the next 12 months, including its debt repayments. The Company's operating cash flow is positive, and management 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 its operations. Failure to comply with the Company's financial covenants or other terms of its Credit Facility and any subsequent failure to negotiate and obtain any required relief from its lenders could result in a default under the Company's Credit Facility. Any event of default could have a material adverse effect on our business and financial condition. In addition, a default under either the Company's Credit Facility or the indenture governing the Company's Senior Notes could cause a cross default in the other and result in t he acceleration of the maturity of all outstanding debt. Under these circumstances, the acceleration of the Company's debt could have a material adverse effect on its business. T he Company may seek from time to time to amend its Credit Facility or obtain other funding or additional funding, which may result in higher interest rates. As of September 30, 2012, the Company's Consolidated Leverage Ratio was 5.1 times versus a covenant limit of 7.0 times and th e Consolidated Interest Coverage Ratio was 2.5 times versus a covenant minimum of 1.5 times. These covenants become more restrictive over time. (B) Senior Unsecured Debt The Senior Notes Simultaneous ly with entering into the Credit Facility on November 23, 2011, the Company issued $220 million of 10.5% unsecured senior notes (the “S enior Notes”), which mature on December 1, 2019. The Company received net proceeds of $212.7 million, which include d a discount of $2.9 million, and incurred deferred financing costs of $6.1 million. These amounts are amortized over the term under the effective interest rate method. Interest on the Senior Notes is payable semi-annually in arrears on June 1 and December 1 of each year (C) Net Interest Expense The components of net interest expense are as follows:
|  | Net Interest Expense
|  | Nine Months Ended
|  | September 30,
|  | 2012 |  | 2011
|  | (amounts in thousands)
Interest expense |  | $ | 36,005 |  | $ | 7,973
Amortization of deferred financing costs |  |  | 3,283 |  |  | 2,825
Amortization of original issue discount of senior notes |  |  | 182 |  |  | -
Interest expense on interest rate hedging agreements |  |  | 1,392 |  |  | 5,706
Interest income and other investment income |  |  | (8) |  |  | (27)
Total net interest expense |  | $ | 40,854 |  | $ | 16,477
|  | Net Interest Expense
|  | Three Months Ended
|  | September 30,
|  | 2012 |  | 2011
|  |  | (amounts in thousands)
Interest expense |  | $ | 12,114 |  | $ | 2,618
Amortization of deferred financing costs |  |  | 1,111 |  |  | 941
Amortization of original issue discount of senior notes |  |  | 62 |  |  | -
Interest expense on interest rate hedging agreements |  |  | - |  |  | 1,712
Interest income and other investment income |  |  | (2) |  |  | (20)
Total net interest expense |  | $ | 13,285 |  | $ | 5,251
The Company's interest expense was higher in 2012 primarily due to the higher borrowing costs under the Credit Facility and Senior Notes as compared to the Company's former credit agreement.

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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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