SHORT-TERM BORROWINGS AND LONG-TERM DEBT



Debt Obligations	Interest Rate Range as of February 22, 2013	Fiscal Year Maturity Range	February 22, 2013		February 24, 2012
U.S. dollar obligations:
Senior notes (1)	6.375%	2021	$	249.9	$	249.9
Revolving credit facilities (2)(4)		2018	—		—
Notes payable (3)	LIBOR + 3.35%	2017	38.4		40.8
Capitalized lease obligations	6.0%-6.5%	2014-2016	0.4		0.5
			288.7		291.2
Foreign currency obligations:
Revolving credit facilities (4)			—		—
Notes payable	0.0%-6.5%		0.3		0.3
Total short-term borrowings and long-term debt			289.0		291.5
Short-term borrowings and current portion of long-term debt (5)			2.6		2.6
Long-term debt			$	286.4	$	288.9

________________________

(1)

During 2011, we issued $250 of unsecured unsubordinated senior notes, due in February 2021 (“2021 Notes”). The 2021 Notes were priced at 99.953% of par value. The bond discount of $0.1 and direct debt issue costs of $3.0 were deferred and are being amortized over the life of the 2021 Notes. Although the coupon rate of the 2021 Notes is 6.375%, the effective interest rate is 6.6% after taking into account the impact of the discount, debt issuance costs and the deferred loss on interest rate locks related to the debt issuance. The 2021 Notes rank equally with all of our other unsecured unsubordinated indebtedness, and they contain no financial covenants. We may redeem some or all of the 2021 Notes at any time. The redemption price would equal the greater of (1) the principal amount of the notes being redeemed; or (2) the present value of the remaining scheduled payments of principal and interest discounted to the redemption date on a semi-annual basis at the comparable U.S. Treasury rate plus 45 basis points; plus, in both cases, accrued and unpaid interest. If the notes are redeemed within 3 months of maturity, the redemption price would be equal to the principal amount of the notes being redeemed plus accrued and unpaid interest. Amortization expense related to the discount and debt issuance costs on the 2021 notes was $0.3 in both 2013 and 2012.

(2)

We have a $125 global committed bank facility which was entered into in Q1 2013. This facility amended and restated the former facility, which was scheduled to expire in Q4 2013. Please see below for further detail. As of February 22, 2013 and February 24, 2012, there were no borrowings outstanding under the applicable facility, our availability was not limited, and we were in compliance with all covenants under the applicable facility.

In addition, we have a $12.9 unsecured committed revolving bank facility which is utilized primarily for standby letters of credit in support of our self-insured workers’ compensation program. As of February 22, 2013 and February 24, 2012, we had $12.1 and $12.3, respectively, in outstanding standby letters of credit against this facility. We had no draws against our standby letters of credit during 2013 or 2012.

(3)

During Q2 2010, we borrowed $47.0 at a floating interest rate based on 30-day LIBOR plus 3.35%. The loan has a term of seven years and requires fixed monthly principal payments of $0.2 based on a 20-year amortization schedule with a $30 balloon payment due in Q2 2017. The loan is secured by two corporate aircraft, contains no financial covenants and is not cross-defaulted to our other debt facilities.

(4)

We have agreements with certain financial institutions which provide for borrowings on secured uncommitted short-term credit facilities of up to $3.5 of U.S. dollar obligations, secured uncommitted short-term credit facilities of up to $31.4 of foreign currency obligations and unsecured uncommitted short-term credit facilities of up to $7.4 of foreign currency obligations as of February 22, 2013. Interest rates are variable and determined by each agreement at the time of borrowing. These agreements expire within one year, but may be renewed annually, subject to certain conditions and may be changed or canceled by the banks at any time. There were no borrowings on these facilities as of February 22, 2013 and February 24, 2012.


(5)	The weighted-average interest rate for short-term borrowings and the current portion of long-term debt was 3.8% as of February 22, 2013 and February 24, 2012.

The annual maturities of short-term borrowings and long-term debt for each of the following five years are as follows:



Year Ending in February	Amount
2014	$	2.6
2015	2.4
2016	2.4
2017	31.4
2018 and after	250.2
	$	289.0

Global Credit Facility

In Q1 2013, we entered into a $125 committed five-year unsecured revolving syndicated credit facility which amended and restated our previous unsecured syndicated credit facility. At our option, and subject to certain conditions, we may increase the aggregate commitment under the facility by up to $75 by obtaining at least one commitment from one of the lenders.

We can use borrowings under the facility for general corporate purposes, including friendly acquisitions. Interest on borrowings under the facility is based on the rate, as selected by us, between the following two options:


•	The greatest of the prime rate, the Federal fund effective rate plus 0.5%, and the Eurocurrency rate for a one month interest period plus 1%, plus the applicable margin as set forth in the credit agreement; or


•	The Eurocurrency rate plus the applicable margin as set forth in the credit agreement.

The facility requires us to satisfy two financial covenants:

•

A maximum leverage ratio covenant, which is measured by the ratio of (x) indebtedness (as determined under the credit agreement) less excess liquidity (as determined under the credit agreement) to (y) the trailing four quarter Adjusted EBITDA (as determined under the credit agreement) and is required to be no greater than 3:1. (In the context of certain permitted acquisitions, we have a one-time ability, subject to certain conditions, to increase the maximum ratio to 3.25 to 1.0 for four consecutive quarters).


•	A minimum interest coverage ratio covenant, which is measured by the ratio of (y) trailing four quarter Adjusted EBITDA (as determined under the credit agreement) to (z) trailing four quarter interest expense and is required to be no less than 3.5:1.

The facility requires us to comply with certain other covenants, including a restriction on the aggregate amount of cash dividend payments and share repurchases in any fiscal year. In general, as long as our leverage ratio is less than 2.50 to 1.0, there is no restriction on cash dividends and share repurchases. If our leverage ratio is between 2.50 to 1.0 and the maximum then permitted, our ability to pay more than $35.0 in cash dividends and share repurchases in aggregate in any fiscal year may be restricted, depending on our liquidity. As of February 22, 2013, our leverage ratio was less than 2.50 to 1.0.

As of February 22, 2013 and February 24, 2012, we were in compliance with all covenants under the facility in place as of the respective dates.