FINANCING ARRANGEMENTS

12 Months Ended

Sep. 30, 2011

FINANCING ARRANGEMENTS

FINANCING ARRANGEMENTS

NOTE 9—FINANCING ARRANGEMENTS

Long-term debt consists of the following:

September 30,	2011			2010
	(in thousands)
Unsecured notes payable to a group of insurance companies, with annual principal payments of $4,000,000 due in November. Interest at 6.31% is payable semiannually in November and May.	$	12,000		$	16,000
Mortgage note from a U.K. financial institution, with quarterly installments of principal and interest at 6.48%	3,918			4,494
	15,918			20,494
Less current portion	(4,541		)	(4,545		)
	$	11,377		$	15,949

Maturities of long-term debt for each of the five years in the period ending September 30, 2016, are as follows: 2012 — $4.5 million; 2013 — $4.5 million; 2014 — $4.5 million; 2015 — $0.5 million; 2016 — $0.5 million.

Interest paid amounted to $1.1 million, $1.4 million, and $1.8 million in 2011, 2010, and 2009, respectively.

The terms of the notes payable include provisions that require and/or limit, among other financial ratios and measurements, the permitted levels of debt and tangible net worth and coverage of fixed charges. At September 30, 2011, this agreement leaves consolidated retained earnings of $280.1 million available for the payment of dividends to shareholders, purchases of our common stock and other charges to shareholders’ equity. To date, there have been no covenant violations.

We maintain short-term borrowing arrangements in New Zealand and Australia totaling $0.5 million New Zealand dollars (equivalent to approximately $0.4 million) and $10 million Australian dollars (equivalent to approximately $9.7 million) to help meet the short-term working capital requirements of our subsidiaries in those countries. At September 30, 2011, no amounts were outstanding under these borrowing arrangements.

We have a committed three-year revolving credit agreement with a group of financial institutions in the amount of $150 million, expiring in December 2012. Commitment fees associated with this financing arrangement are 0.25% of the unutilized balance per annum. As of September 30, 2011, there were no borrowings under this agreement; however, there were letters of credit outstanding under the agreement totaling $84.4 million, which reduce the available line of credit to $65.6 million.

As of September 30, 2011, including the $84.4 million above, we had letters of credit and bank guarantees outstanding totaling $97.7 million, which guarantee either our performance or customer advances under certain contracts. In addition, we had financial letters of credit outstanding totaling $6.9 million as of September 30, 2011, which primarily guarantee our payment of certain self-insured liabilities. We have never had a drawing on a letter of credit instrument, nor are any anticipated; therefore, we estimate the fair value of these instruments to be zero.

Our self-insurance arrangements are limited to certain workers’ compensation plans, automobile liability, and product liability claims. Under these arrangements, we self-insure only up to the amount of a specified deductible for each claim.  Self-insurance liabilities included in other current liabilities on the balance sheet amounted to $8.4 million and $8.2 million as of September 30, 2011 and 2010, respectively.