Long-Term Debt and Capital Leases

3 Months Ended

Apr. 01, 2012

Long-Term Debt and Capital Leases [Abstract]

Long-Term Debt and Capital Leases

Note 10. Long-Term Debt and Capital Leases

Teledyne has a $550.0 million credit facility that has a termination date of February 25, 2016. The facility requires the Company to comply with various financial and operating covenants, including maintaining certain consolidated leverage and interest coverage ratios. Excluding interest and fees, no payments are due under the credit facility until it matures. Borrowings under our credit facility are at variable rates which are, at our option, tied to a Eurocurrency rate equal to LIBOR (London Interbank Offered Rate) plus an applicable rate or a base rate as defined in our credit agreement. Eurocurrency rate loans may be denominated in U.S. dollars or an alternative currency as defined in the agreement. Eurocurrency or LIBOR based loans under the facility typically have terms of one, two, three or six months and the interest rate for each such loan is subject to change if the loan is continued or converted following the applicable maturity date. The Company has not drawn any loans with a term longer than three months under the credit facility. Base rate loans have interest rates that primarily fluctuate with changes in the prime rate. Interest rates are also subject to change based on our consolidated leverage ratio as defined in the credit agreement. The credit agreement also provides for facility fees that vary between 0.20% and 0.45% of the credit line, depending on our consolidated leverage ratio as calculated from time to time.

Available borrowing capacity under the $550.0 million credit facility, which is reduced by borrowings and outstanding letters of credit, was $399.5 million at April 1, 2012. The credit agreement requires the Company to comply with various financial and operating covenants and at April 1, 2012, the Company was in compliance with these covenants. Teledyne also has a $5.0 million uncommitted credit line which permits credit extensions up to $5.0 million plus an incremental $2.0 million solely for standby letters of credit. This credit line is utilized, as needed, for periodic cash needs. Teledyne estimates the fair value of its long-term debt based on debt of similar type, rating and maturity and at comparable interest rates. The estimated fair value of Teledyne’s long-term debt at April 1, 2012 and January 1, 2012, approximated the carrying value.

Long-term debt consisted of the following (in millions):

Balance at	April 1, 2012		January 1, 2012
4.04% Senior Notes due September 2015	$	75.0	$	75.0
4.74% Senior Notes due September 2017		100.0		100.0
5.30% Senior Notes due September 2020		75.0		75.0
$550.0 million revolving credit facility, weighted average rate of 2.18% and 2.48% at April 1, 2012 and January 1, 2012, respectively		136.6		48.0
Total long-term debt	$	386.6	$	298.0

The Company also has $14.8 million in capital leases, of which $1.4 million is current. At April 1, 2012, Teledyne had $13.9 million in outstanding letters of credit.