Note 10: Debt

Debt as of December 31, 2012 and 2011 consists of the following:


	2012		2011
Short-term debt	$	2,288		2,392
Long-term debt:
Credit Line, due 2013⁽¹⁾	$	112,000		72,000
Term Loan denominated in U.S. dollars, due 2013⁽²⁾		214,615		260,000
Term Loan denominated in euros, due 2013⁽³⁾		29,718		50,596
Secured Mortgages⁽⁴⁾		3,880		6,504
Capitalized leases and other long-term debt		6,659		12,333
Total long-term debt, including current maturities		366,872		401,433
Current maturities of long-term debt		357,145		75,300
Long-term debt, less current maturities	$	9,727		326,133

(1)

The loans under this facility may be denominated in USD or several foreign currencies. The interest rates under the facility are based on prime, federal funds and/or the London interbank offer rate (“LIBOR”) for the applicable currency. At December 31, 2012, the applicable rate was 2.0%, and the weighted-average rate was 1.9% for the twelve-month period ended December 31, 2012.

(2)	The interest rate for this loan varies with prime, federal funds and/or LIBOR. At December 31, 2012, the applicable rate was 1.8%, and the weighted-average rate was 1.9% for the twelve-month period ended December 31, 2012.

(3)	The interest rate for this loan varies with LIBOR. At December 31, 2012, the rate was 2.1%, and the weighted-average rate was 2.3% for the twelve-month period ended December 31, 2012.

(4)

This amount consisted of two fixed-rate commercial loans as of December 31, 2011. One of these commercial loans was paid off in December 2012. The remaining commercial loan had an outstanding balance of €2,941 at December 31, 2012. The loan is secured by the Company’s facility in Bad Neustadt, Germany.

On September 19, 2008, the Company entered into a credit agreement with a syndicate of lenders (the “2008 Credit Agreement”) consisting of (i) a $310.0 million Revolving Line of Credit (the “Revolving Line of Credit”), (ii) a $180.0 million term loan (“U.S. Dollar Term Loan”) and (iii) a €120.0 million term loan (“Euro Term Loan”). On November 21, 2011 the Company executed an amendment to the 2008 Credit Agreement increasing the U.S. Dollar term loan by $200.0 million. In addition, the 2008 Credit Agreement provides for a possible increase in the revolving credit facility of up to an additional $200.0 million.

The U.S. Dollar and Euro Term Loans have a final maturity of October 15, 2013. The U.S. Dollar Term Loan requires quarterly principal payments aggregating approximately $214.6 million in 2013. The Euro Term Loan requires quarterly principal payments in Euros equating to approximately $29.7 million in 2013 (based on USD exchange rates as of December 31, 2012).

The Revolving Line of Credit also matures on October 15, 2013. Loans under this facility may be denominated in USD or several foreign currencies and may be borrowed by the Company or two of its foreign subsidiaries as outlined in the 2008 Credit Agreement. On December 31, 2012, the Revolving Line of Credit had an outstanding principal balance of $112.0 million. In addition, letters of credit in the amount of $13.7 million were outstanding on the Revolving Line of Credit at December 31, 2012, leaving $184.3 million available for future use, subject to the terms of the Revolving Line of Credit.

The interest rates per annum applicable to loans under the 2008 Credit Agreement are, at the Company’s option, either a base rate plus an applicable margin percentage or a Eurocurrency rate plus an applicable margin. The base rate is the greater of (i) the prime rate or (ii) one-half of 1% over the weighted average rates of overnight federal funds as published by the Federal Reserve Bank of New York. The Eurocurrency rate is LIBOR.

The initial applicable margin percentage over LIBOR under the 2008 Credit Agreement was 2.5% with respect to the term loans and 2.1% with respect to loans under the Revolving Line of Credit, and the initial applicable margin percentage over the base rate was 1.25% with respect to floating rate loans. After the Company’s delivery of its financial statements and compliance certificate for each fiscal quarter, the applicable margin percentages are subject to adjustments based upon the ratio of the Company’s consolidated total debt to consolidated adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (each as defined in the 2008 Credit Agreement) being within certain defined ranges. At December 31, 2012, the applicable margin percentage over LIBOR under the 2008 Credit Agreement was a weighted average of 1.62% with respect to the term loans and 1.65% with respect to loans under the Revolving Line of Credit, and the applicable margin percentage over the base rate was 0.75% with respect to floating rate loans. The Company periodically uses interest rate swaps to hedge a portion of its exposure to variability in future LIBOR-based interest payments on variable-rate debt (see Note 16 “Hedging Activities, Derivative Instruments and Credit Risk”).

The obligations under the 2008 Credit Agreement are guaranteed by the Company’s existing and future domestic subsidiaries. The obligations under the 2008 Credit Agreement are also secured by a pledge of the capital stock of each of the Company’s existing and future material domestic subsidiaries, as well as 65% of the capital stock of each of the Company’s existing and future first-tier material foreign subsidiaries.

The 2008 Credit Agreement includes customary covenants. Subject to certain exceptions, these covenants restrict or limit the ability of the Company and its subsidiaries to, among other things: incur liens; engage in mergers, consolidations and sales of assets; incur additional indebtedness; pay dividends and redeem stock; make investments (including loans and advances); enter into transactions with affiliates, make capital expenditures and incur rental obligations above defined thresholds. In addition, the 2008 Credit Agreement requires the Company to maintain compliance with certain financial ratios on a quarterly basis, including a maximum total leverage ratio test and a minimum interest coverage ratio test. As of December 31, 2012, the Company was in compliance with each of the financial ratio covenants under the 2008 Credit Agreement.

The 2008 Credit Agreement contains customary events of default, including upon a change of control. If an event of default occurs, the lenders under the 2008 Credit Agreement are entitled to take various actions, including the acceleration of amounts due under the 2008 Credit Agreement.

The Company issued $125.0 million of 8% Senior Subordinated Notes (the “Notes”) in 2005. On May 2, 2011, the Company redeemed all $125.0 million in aggregate principal amount outstanding, plus accrued and unpaid interest, of the Notes. As a result, the Company wrote off $0.8 million of unamortized debt issue cost.

As of December 31, 2009, a portion of the Euro Term Loan was designated as a hedge of net euro (“EUR”) investments in foreign operations. As such, changes in the reported amount of these borrowings due to changes in currency exchange rates are included in accumulated other comprehensive income (see Note 13 “Accumulated Other Comprehensive Income (Loss)”). As of December 31, 2012, the balance of this designation was €22.5 million.

Total debt maturities for the five years subsequent to December 31, 2012 and thereafter are approximately $359.4 million, $0.8 million, $2.8 million, $0.8 million, $0.8 million and $4.6 million, respectively.

The rentals for all operating leases were $33.5 million, $31.3 million, and $28.4 million, in 2012, 2011 and 2010, respectively. Future minimum rental payments for operating leases for the five years subsequent to December 31, 2012 and thereafter are approximately $28.2 million, $22.7 million, $18.0 million, $12.9 million, $10.8 million, and $33.2 million, respectively.