Financing Agreements

12 Months Ended

Sep. 30, 2011

Financing Agreements

Financing Agreements

NOTE 5. FINANCING AGREEMENTS

Total debt consists of the following:

	Years Ended September 30
	2011		2010
Outstanding finance credit lines	$	7.8	$	8.1
Revolving credit facility		45.0		45.0
Unsecured 8.50% debentures due on December 1, 2011		47.5		48.4
Unsecured 7.00% debentures due on February 15, 2024		19.7		19.7
Unsecured 6.75% debentures due on December 15, 2027		29.8		29.8
Other		1.3		0.6
Total debt		151.1		151.6
Less current portion of debt		100.3		53.1
Total long-term debt	$	50.8	$	98.5

We have trade finance credit lines and uncommitted letter of credit facilities.  These lines are associated with the normal course of business and are not currently, nor have they historically, been of material size to the overall business.

In 2004, we issued $250.0 million of 4.5 percent senior notes due in 2009.  In conjunction with and in preparation for the spin-off of the funeral services business, we made a cash tender offer to purchase any and all of these notes.  As a result of that tender offer, $224.3 million of long-term debt was retired effective March 31, 2008.  During our third fiscal quarter of 2009, we repaid the remaining $25.7 million of outstanding senior notes related to the 2004 issuance at the scheduled maturity date.

Unsecured debentures outstanding at September 30, 2011 have fixed rates of interest.  We have deferred gains included in the amounts above from the termination of previous interest rate swap agreements, and those deferred gains amounted to $0.9 million at September 30, 2011 and $2.1 million at September 30, 2010.  The deferred gains on the termination of the swaps are being amortized and recognized as a reduction of interest expense over the remaining term of the related debt through 2011 and 2024, and as a result, the effective interest rates on that debt have been and will continue to be lower than the stated interest rates on the debt.

We have a $500.0 million five-year senior revolving credit facility.  The term of the five-year facility expires on March 28, 2013 (subject to extension upon satisfaction of certain conditions set forth in the credit facility).  Borrowings under the credit facility bear interest at variable rates specified therein, and the availability of borrowings is subject to our ability at the time of borrowing to meet certain specified conditions, including compliance with covenants contained in the credit agreement governing the facility.  The credit agreement contains covenants that, among other matters, require us to maintain a ratio of consolidated indebtedness to consolidated EBITDA (each as defined in the credit agreement) of not more than 3.5:1.0 and a ratio of consolidated EBITDA to interest expense of not less than 3.5:1.0.  The proceeds of the five-year facility shall be used, as needed: (i) for working capital, capital expenditures, and other lawful corporate purposes; and (ii) to finance acquisitions.

As of September 30, 2011, we had outstanding borrowings of $45.0 million and undrawn letters of credit of $5.8 million under the five-year facility, leaving $449.2 million of borrowing capacity available under the facility.  During the first quarter of fiscal 2010, we made a payment of $45.0 million on our credit facility to reduce a portion of the short-term debt originally borrowed in conjunction with the Liko Acquisition.

The fair value of our debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to us for debt of the same remaining maturities. The book values of our short-term debt instruments approximate fair value. The estimated fair values of our long-term debt instruments were $52.6 million and $95.7 million at September 30, 2011 and 2010.