Long-Term Debt

6 Months Ended

Jul. 01, 2011

Long-Term Debt

Long-Term Debt

8. Long-Term Debt

(in millions)	July 1, 2011			December 31, 2010
North America
Subordinated Convertible Notes due 2029	$	429.5		$	429.5
Debt discount on Subordinated Convertible Notes due 2029		(265.0	)		(265.6	)
1.00% Senior Convertible Notes due 2012		10.6			10.6
Debt discount on 1.00% Senior Convertible Notes due 2012		(0.8	)		(1.1	)
0.875% Convertible Notes due 2013		355.0			355.0
Debt discount on 0.875% Convertible Notes due 2013		(50.2	)		(59.5	)
7.125% Senior Notes due 2017		200.0			200.0
Senior Floating Rate Notes		125.0			125.0
Amended Credit Facility		42.1			-
Other		9.0			9.0
Europe and Mediterranean
Spanish Term Loan		44.8			50.1
Credit facilities		29.1			38.1
Uncommitted accounts receivable facilities		4.2			-
Other		14.4			15.3
Rest of World ("ROW")
Credit facilities		171.4			79.1
Total debt		1,119.1			985.5
Less current maturities		211.7			121.0
Long-term debt	$	907.4		$	864.5

At July 1, 2011, maturities of long-term debt during twelve month periods beginning July 1, 2011 through June 30, 2016 are $211.7 million, $77.8 million, $315.4 million, $8.2 million and $130.6 million, respectively, and $375.4 million thereafter. As of July 1, 2011 and December 31, 2010, the Company was in compliance with all debt covenants as discussed below.

The Company's convertible debt instruments outstanding as of July 1, 2011 and December 31, 2010 are as follows:

	Subordinated Convertible Notes						1.00% Senior Convertible Notes						0.875% Convertible Notes
	July 1,			December 31,			July 1,			December 31,			July 1,			December 31,
(in millions)	2011			2010			2011			2010			2011			2010
Face value	$	429.5		$	429.5		$	10.6		$	10.6		$	355.0		$	355.0
Debt discount		(265.0	)		(265.6	)		(0.8	)		(1.1	)		(50.2	)		(59.5	)
Book value		164.5			163.9			9.8			9.5			304.8			295.5
Fair value		599.4			521.0			10.0			9.7			382.5			350.6
Maturity date		November 2029						October 2012						November 2013
Stated annual interest rate		4.50% until Nov 2019 2.25% until Nov 2029						1.00% until Oct 2012						0.875% until Nov 2013
Interest payments		Semi-annually: May 15 & November 15						Semi-annually: April 15 & October 15						Semi-annually: May 15 & November 15

The 1.00% Senior Convertible Notes and the 0.875% Convertible Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis, by the Company's wholly-owned U.S. and Canadian subsidiaries. For additional information on the convertible notes, refer to the Company's 2010 Annual Report on Form 10-K.

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Subordinated Convertible Notes

The Company's Subordinated Convertible Notes were issued on December 15, 2009 in the amount of $429.5 million. The notes and the common stock issuable upon conversion were registered on a Registration Statement on Form S-4, initially filed with the SEC on October 27, 2009, as amended and as declared effective by the SEC on December 15, 2009. At issuance, the Company separately accounted for the liability and equity components of the instrument, based on the Company's nonconvertible debt borrowing rate on the instrument's issuance date of 12.5%. At issuance, the liability and equity components were $162.9 million and $266.6 million, respectively. The equity component (debt discount) is being amortized to interest expense based on the effective interest method. There were no proceeds generated from the transaction and the Company incurred issuance fees and expenses of approximately $14.5 million as a result of the exchange offer which have been proportionately allocated to the liability and equity components of the subordinate notes due in 2029.

1.00% Senior Convertible Notes

As a result of the aforementioned exchange offer of Subordinated Convertible Notes due in 2029, approximately 97.8% or $464.4 million of the Company's 1.00% Senior Convertible Notes were validly tendered. As of December 15, 2009, there were $10.6 million of the 1.00% Senior Convertible Notes outstanding. The Company's 1.00% Senior Convertible Notes were originally issued in September 2007 in the amount of $475.0 million and sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). Subsequently, on July 16, 2008, the resale of the notes and the common stock issuable upon conversion of the notes was registered on a Registration Statement on Form S-3. The Company separately accounted for the liability and equity components of the instrument based on the Company's nonconvertible debt borrowing rate on the instrument's issuance date of 7.5%. At issuance, the liability and equity components were $348.2 million and $126.8 million, respectively. At the exchange date December 15, 2009, the liability and equity components were $389.7 million and $74.7 million, respectively. The equity component (debt discount) is being amortized to interest expense based on the effective interest method.

Proceeds from the 1.00% Senior Convertible Notes were used to partially fund the purchase price of $707.6 million related to the PDIC acquisition and to pay transaction costs of approximately $12.3 million directly related to the issuance which have been allocated to the liability and equity components in proportion to the allocation of proceeds.

0.875% Convertible Notes

The Company's 0.875% Convertible Notes were issued in November of 2006 in the amount of $355.0 million. At the time of issuance, the notes and the common stock issuable upon conversion of the notes were registered on a Registration Statement on Form S-3ASR which was renewed on September 30, 2009 when the Company filed a Renewal Registration Statement for the underlying common stock on Form S-3ASR. The Company separately accounted for the liability and equity components of the instrument based on the Company's nonconvertible debt borrowing rate on the instrument's issuance date of 7.35%. At issuance, the liability and equity components were $230.9 million and $124.1 million, respectively. The equity component (debt discount) is being amortized to interest expense based on the effective interest method.

Concurrent with the sale of the 0.875% Convertible Notes, the Company purchased note hedges that are designed to mitigate potential dilution from the conversion of the 0.875% Convertible Notes in the event that the market value per share of the Company's common stock at the time of exercise is greater than approximately $50.36. Under the note hedges that cover approximately 7,048,880 shares of the Company's common stock, the counterparties are required to deliver to the Company either shares of the Company's common stock or cash in the amount that the Company delivers to the holders of the 0.875% Convertible Notes with respect to a conversion, calculated exclusive of shares deliverable by the Company by reason of any additional make whole premium relating to the 0.875% Convertible Notes or by reason of any election by the Company to unilaterally increase the conversion rate as permitted by the indenture governing the 0.875% Convertible Notes. The note hedges expire at the close of trading on November 15, 2013, which is also the maturity date of the 0.875% Convertible Notes, although the counterparties will have ongoing obligations with respect to 0.875% Convertible Notes properly converted on or prior to that date as to which the counterparties have been timely notified.

The Company issued warrants to counterparties that could require the Company to issue up to approximately 7,048,880 shares of the Company's common stock in equal installments on each of the fifteen consecutive business days beginning on and including February 13, 2014. The strike price is $76.00 per share, which represents a 92.4% premium over the closing price of the Company's shares of common stock on November 9, 2006. The warrants are expected to provide the Company with some protection against increases in the common stock price over the conversion price per share.

The note hedges and warrants are separate and legally distinct instruments that bind the Company and the counterparties and have no binding effect on the holders of the 0.875% Convertible Notes. In addition, the note hedges and warrants were recorded as a charge and an increase, respectively, in additional paid-in capital in total equity as separate equity transactions.

Proceeds from the offering were used to decrease outstanding debt $87.8 million, including accrued interest, under the Company's Amended Credit Facility, to pay $124.5 million for the cost of the note hedges, and to pay transaction costs of approximately $9.4 million directly related to the issuance which have been allocated to the liability and equity components in proportion to the allocation of proceeds. Additionally, the Company received $80.4 million in proceeds from the issuance of the warrants. At the conclusion of these transactions, the net effect of the receipt of the funds from the 0.875% Convertible Notes and the payments and proceeds mentioned above was an increase in cash of approximately $213.7 million, which is being used by the Company for general corporate purposes including acquisitions.

7.125% Senior Notes and Senior Floating Rate Notes

The Company's $325.0 million in aggregate principal amount of senior unsecured notes, comprised of $125.0 million of Senior Floating Rate Notes due 2015 (the "Senior Floating Rate Notes") and $200.0 million of 7.125% Senior Fixed Rate Notes due 2017 (the "7.125% Senior Notes" and together, the "Notes") were offered and sold in private transactions in accordance with Rule 144A and Regulation S under the Securities Act on March 21, 2007. An exchange offer commenced on June 11, 2007 and was completed on July 26, 2007 to replace the unregistered Notes with registered Notes with like terms pursuant to an effective Registration Statement on Form S-4.

	7.125% Senior Notes				Senior Floating Rate Notes
(in millions)	July 1, 2011		December 31, 2010		July 1, 2011		December 31, 2010
Face value	$	200.0	$	200.0	$	125.0	$	125.0
Fair value		205.0		197.5		123.4		114.4
Interest rate		7.125%		7.125%		2.6%		2.7%
Interest payment		Semi-annually: Apr 1 & Oct 1				3-month LIBOR rate plus 2.375% Quarterly: Jan 1, Apr 1, Jul 1 & Oct  1
Maturity date		April 2017				July 2015

Guarantee Jointly and severally guaranteed by the Company's wholly-owned U.S. and Canadian  subsidiaries

Guarantee	Jointly and severally guaranteed by the Company's  wholly-owned U.S. and Canadian subsidiaries
Call Option(1)	Beginning Date			Percentage	Beginning Date			Percentage
		April 1, 2012	-	103.563%		April 1, 2009	-	102.0%
		April 1, 2013	-	102.375%		April 1, 2010	-	101.0%
		April 1, 2014	-	101.188%		April 1, 2011	-	100.0%
		April 1, 2015	-	100.000%

(1) The Company may, at its option, redeem the Notes on or after the following dates and percentages (plus interest due)

The Notes' indenture contains covenants that limit the ability of the Company and certain of its subsidiaries to (i) pay dividends on, redeem or repurchase the Company's capital stock; (ii) incur additional indebtedness; (iii) make investments; (iv) create liens; (v) sell assets; (vi) engage in certain transactions with affiliates; (vii) create or designate unrestricted subsidiaries; and (viii) consolidate, merge or transfer all or substantially all assets. However, these covenants are subject to important exceptions and qualifications, one of which will permit the Company to declare and pay dividends or distributions on the Series A preferred stock provided there is no default on the Notes and certain financial conditions are met.

Proceeds from the Notes of $325.0 million, less approximately $7.9 million of cash payments for fees and expenses that are being amortized over the life of the Notes, were used to pay approximately $285.0 million for 9.5% Senior Notes, $9.3 million for accrued interest on the 9.5% Senior Notes and $20.5 million for tender fees and the inducement premium on the 9.5% Senior Notes, leaving net cash proceeds of approximately $2.3 million which were used for general corporate purposes.

Senior Secured Revolving Credit Facility ("Amended Credit Facility")

The Company's current senior secured revolving credit facility ("Amended Credit Facility"), as amended, is a five-year, $400.0 million asset based revolving credit agreement that includes an approximate $50.0 million sublimit for the issuance of commercial and standby letters of credit and a $20.0 million sublimit for swingline loans. The Company under the Amended Credit Facility has the option (subject to certain limitations and conditions) to elect whether loans under the Amended Credit Facility will be LIBOR loans or alternative base rate loans. Eurodollar loans bear interest at a rate equal to an adjusted LIBOR rate plus an applicable margin percentage, ranging from 1.125% to 1.875% and alternative base rate loans bear interest at a rate equal to an alternative base rate plus an applicable margin percentage ranging from 0.00% to 0.625%. The applicable margin percentage is subject to adjustments based upon the excess availability, as defined in the Amended Credit Facility. Indebtedness under the Amended Credit Facility is guaranteed by the Company's U.S. and Canadian subsidiaries and is secured by a first priority security interest in tangible and intangible property and assets of the Company's U.S. and Canadian subsidiaries. The lenders have also received a pledge of all of the capital stock of the Company's existing U.S. subsidiaries and any future U.S. subsidiaries.

The Amended Credit Facility requires that the Company comply with certain financial and negative covenants, the principal covenant of which is a quarterly minimum fixed charge coverage ratio test, which is only applicable when excess availability, as defined, is below a certain threshold. However, the Company will be permitted to declare and pay dividends or distributions on the Series A preferred stock so long as there is no default under the Amended Credit Facility and certain financial conditions are met.

The Company pays quarterly fees in connection with the issuance of letters of credit and commitment fees equal to 25 basis points, per annum on any unused commitments under the Amended Credit Facility. Both fees are payable quarterly. In connection with the original issuance and related subsequent amendments to the Amended Credit Facility, the Company incurred fees and expenses aggregating $11.1 million, which are being amortized over the term of the Amended Credit Facility.

The Company's Amended Credit Facility is summarized in the table below:

	Amended credit facility
(in millions)	July 1, 2011		December 31, 2010
Outstanding borrowings	$	42.1	$	-
Undrawn availability		339.5		371.5
Interest rate		1.5%		-
Outstanding letters of credit		18.4		18.5
Original issuance		November 2003
Maturity date		July 2012

Spanish Term Loans

The table below provides a summary of the Company's term loans and corresponding fixed interest rate swaps. The proceeds from the Spanish Term Loans were used to partially fund the acquisition of Enica Biskra and for general working capital purposes. There is no remaining availability under these Spanish Term Loans.

	Spanish Term Loans(1)
(in millions)	July 1, 2011		December 31, 2010
Outstanding borrowings	$	44.8	$	50.1
Interest rate – weighted average(2)		3.7%		3.7%

(1) The terms of the Spanish Term Loans are as follows:

(in millions)	Original Amount	Issuance Date	Maturity Date	Interest rate	Loan and Interest payable	Interest rate Swap(2)
Term Loan 1	20.0 Euros	February 2008	February 2013	Euribor +0.5%	Semi-annual: Aug & Feb	4.2%
Term Loan 2	10.0 Euros	April 2008	April 2013	Euribor +0.75%	Semi-annual: Apr & Oct	4.58%
Term Loan 3	21.0 Euros	June 2008	June 2013	Euribor +0.75%	Quarterly: Mar, Jun, Sept & Dec	4.48%
Term Loan 4	15.0 Euros	September 2009	August 2014	Euribor +2.0%	Quarterly: Mar, Jun, Sept & Dec Principal payments: Feb & Aug	1.54%

(2) The Company entered into fixed interest rate swaps to coincide with the terms and conditions of the term loans that will effectively hedge the variable interest rate with a fixed interest rate.

Europe and Mediterranean Credit Facilities

The Company's Europe and Mediterranean credit facilities are summarized in the table below:

	Europe and Mediterranean credit facilities
(in millions)	July 1, 2011		December 31, 2010
Outstanding borrowings	$	29.1	$	38.1
Undrawn availability		114.5		125.4
Interest rate – weighted average		5.0%		3.1%
Maturity date		Various

Europe and Mediterranean Uncommitted Accounts Receivable Facilities

The Company's Europe and Mediterranean uncommitted accounts receivable facilities are summarized in the table below:

	Uncommitted accounts receivable facilities
(in millions)	July 1, 2011			December 31, 2010
Outstanding borrowings	$	4.2		$	—
Undrawn availability		82.6			113.7
Interest rate – weighted average		2.1	%		—
Maturity date		Various

The Spanish Term Loans and certain credit facilities held by the Company's Spain subsidiary are subject to certain financial ratios of the Company's European subsidiaries, which include minimum net equity and net debt to EBITDA (earnings before interest, taxes, depreciation and amortization). At July 1, 2011 and December 31, 2010, the Company was in compliance with all covenants under these facilities.

ROW credit facilities

The Company's ROW credit facilities are summarized in the table below:

	ROW credit facilities
(in millions)	July 1, 2011		December 31, 2010
Outstanding borrowings	$	171.4	$	79.1
Undrawn availability		248.5		279.3
Interest rate – weighted average		3.3%		3.4%
Maturity date		Various

The Company's ROW credit facilities are short term loans utilized for working capital purposes. Certain credit facilities are subject to financial covenants. The Company was in compliance with all covenants under these facilities as of July 1, 2011 and December 31, 2010.