10. Debt

Borrowing Arrangements

The Company maintains a borrowing arrangement with a syndicate of banks, which was amended on December 7, 2011, and provides the Company with $735 million ("Line A") in short-term lines of credit and $115 million ("Line B") in long-term lines of credit. It also provides the Company with $90 million in letters of credit. Any amounts outstanding on letters of credit will reduce the amount available on the lines of credit. The Company had standby letters of credit outstanding of $35.1 million at December 31, 2011. As of December 31, 2011, $71.5 million in borrowings was outstanding on Line A and no borrowings were outstanding on Line B. Borrowings under the line of credit bear interest at variable interest rates, which are based off LIBOR plus an applicable spread. The maturity date for Line A is December 2014 and September 2015 for Line B. Draw downs that are less than 90 days are recorded net in the Consolidated Statements of Cash Flows.

The long-term portion of the syndicate line can be drawn on and the resulting debt considered long-term when used for long-term purposes such as replacing long-term debt that is maturing, funding the purchase of long-term assets, or increasing permanent working capital when needed. The expectation at the time of drawing is that it will be kept open until more permanent replacement debt is secured, until other long-term assets are sold, or earnings are generated to pay it down.

The Company drew $20.0 million on the long-term syndicate line at the end of the first quarter, and again in the second quarter of 2011 as a partial replacement for $25.0 million in long-term private placement debt that was becoming a current maturity and another $17.0 million that was maturing. In the second half of the year, a combination of reduced borrowings due to a drop in commodity prices, increasing earnings and working capital, and lower capital spending than originally planned resulted in pay down of a significant amount of long-term debt. Total payments of long-term debt are $104.0 million year-to-date.

At December 31, 2011, the Company had a total of $743.4 million available for borrowing under its lines of credit.

The following information relates to short-term borrowings:


	December 31,
(in thousands, except percentages)	2011			2010			2009

Maximum amount borrowed	$	601,500		$	305,000		$	92,700
Weighted average interest rate		2.73	%		3.69	%		2.89	%

Long-Term Debt

Recourse Debt

Long-term debt consists of the following:


	December 31,
(in thousands, except percentages)	2011		2010
Note payable, 4.80%, payable at maturity, due 2011	$	—	$	17,000
Note payable, 4.55%, payable at maturity, due 2012		25,000		25,000
Note payable, 5.52 %, payable at maturity, due 2013		25,000		25,000
Note payable, 6.10%, payable at maturity, due 2014		25,000		25,000
Note payable, 6.12%, payable at maturity, due 2015		61,500		61,500
Note payable, 6.78%, payable at maturity due 2018		41,500		41,500
Note payable, variable rate (2.82% at December 31, 2010), payable $110 monthly plus interest, due 2012 (a)		—		10,031
Note payable, variable rate (1.65% at December 31, 2011), payable in increasing amounts ($875 annually at December 31, 2011) plus interest, due 2023 (a)		13,715		14,590
Note payable, variable rate (1.09% at December 31, 2011), payable $58 monthly plus interest, due 2016 (a)		10,150		10,850
Note payable, 8.5%, payable $15 monthly, due 2016		1,160		1,242
Industrial development revenue bonds:
Variable rate (2.76% at December 31, 2011), due 2017 (a)		8,881		9,000
Variable rate (2.19% at December 31, 2011), due 2019 (a)		4,650		4,650
Variable rate (2.25% at December 31, 2011), due 2025 (a)		3,100		3,100
Variable rate (1.87% at December 31, 2011), due 2036 (a)		21,000		—
Debenture bonds, 4.00% to 6.5%, due 2011 through 2021		29,483		36,887
Other notes payable and bonds		—		8

		270,139		285,358
Less: current maturities		32,051		21,683

	$	238,088	$	263,675

(a)	Debt is collateralized by first mortgages on certain facilities and related equipment or other assets with a book value of $41.6 million

The Company called certain issues of debenture bonds earning a rate of interest of 6% or higher during the fourth quarter of 2011. The total amount called was $18.3 million. At December 31, 2011, the Company had $8.9 million of five-year term debenture bonds bearing interest at 3.0% and $2.7 million of ten-year term debenture bonds bearing interest at 4.25% available for sale under an existing registration statement.

The Company's short-term and long-term borrowing agreements include both financial and non-financial covenants that, among other things, require the Company at a minimum to maintain:

•

tangible net worth of not less than $300 million

•

current ratio net of hedged inventory of not less than 1.25 to 1

•

debt to capitalization ratio of not more than 70%

•

asset coverage ratio of not more than 70%

•

interest coverage ratio of not less than 2.75 to 1

The Company was in compliance with all covenants at and during the years ended December 31, 2011 and 2010.

The aggregate annual maturities of long-term debt are as follows: 2012 — $32.1 million; 2013 — $27.2 million; 2014 — $29.6 million; 2015 — $70.0 million; 2016 — $16.5 million; and $94.8 million thereafter.

Non-Recourse Debt

The Company's non-recourse long-term debt consists of the following:


	December 31,
(in thousands, except percentages)	2011		2010

Note payable, 5.96%, payable $218 monthly plus interest, due 2013	$	—	$	14,550
Note payable, 6.37%, payable $24 monthly, due 2014		954		1,405
Note payable, 7.06%, payable $2 monthly, due 2011		—		36

		954		15,991
Less: current maturities		157		2,841

	$	797	$	13,150

In 2005, The Andersons Rail Operating I ("TARO I"), a wholly-owned subsidiary of the Company, issued $41 million in non-recourse long-term debt for the purpose of purchasing 2,293 railcars and related leases from the Company. The balance outstanding on the TARO I non-recourse long-term debt at December 31, 2010 was $14.6 million. The full amount of the note was paid off prior to December 31, 2011.

The aggregate annual maturities of non-recourse, long-term debt are as follows: 2012 — $0.2 million; 2013 — $0.2 million; 2014 — $0.6 million and $0.0 million thereafter.

Interest paid (including interest on short-term lines of credit) amounted to $25.2 million, $20.0 million and $20.0 million in 2011, 2010 and 2009, respectively.