Quarterly report pursuant to Section 13 or 15(d)

Borrowings

v2.4.0.6
Borrowings
 3 Months Ended
May 31, 2012
Debt Disclosure [Abstract]  
BORROWINGS
BORROWINGS:

Borrowings consist of the following:

 
May 31, 2012
 
February 29, 2012
 
Current
 
Long-term
 
Total
 
Total
(in millions)
 
 
 
 
 
 
 
Notes Payable to Banks
 
 
 
 
 
 
 
Senior Credit Facility –
 
 
 
 
 
 
 
Revolving Credit Loans
$
26.2

 
$
—

 
$
26.2

 
$
298.0

Other
71.7

 
—

 
71.7

 
79.9

 
$
97.9

 
$
—

 
$
97.9

 
$
377.9

 
 
 
 
 
 
 
 
Long-term Debt
 
 
 
 
 
 
 
Senior Credit Facility – Term Loans
$
22.5

 
$
777.5

 
$
800.0

 
$
826.6

Senior Notes
—

 
2,495.0

 
2,495.0

 
1,894.8

Other Long-term Debt
15.2

 
12.9

 
28.1

 
30.2

 
$
37.7

 
$
3,285.4

 
$
3,323.1

 
$
2,751.6



Senior credit facility –
On May 3, 2012 (the “Closing Date”), the Company, Bank of America, N.A., as administrative agent, and certain other lenders (all such parties other than the Company are collectively referred to as the “Lenders”) entered into a new Credit Agreement (the “2012 Credit Agreement”). The 2012 Credit Agreement provides for aggregate credit facilities of $1,650.0 million, consisting of a $550.0 million term loan facility maturing on May 3, 2017 (the “Term A Facility”), a $250.0 million term loan facility maturing on May 3, 2019 (the “Term A-1 Facility”), and an $850.0 million revolving credit facility (including a sub-facility for letters of credit of up to $200.0 million) which terminates on May 3, 2017 (the “Revolving Credit Facility”). The 2012 Credit Agreement also permits the Company from time to time after the Closing Date to elect to increase the Lenders' revolving credit commitments or add one or more tranches of additional term loans, subject to the willingness of existing or new lenders to fund such increase or term loans and other customary conditions. The minimum aggregate principal amount of such incremental revolving credit commitment increases or additional term loans may be no less than $25 million and the aggregate outstanding principal amount of all such incremental revolving credit commitment increases and additional term loans, other than term loans the proceeds of which are applied to repay existing term loans, may be no more than $750 million. A portion of the proceeds of the 2012 Credit Agreement were used to repay the outstanding obligations under the Company's then existing senior credit facility. The Company uses its revolving credit facility under the 2012 Credit Agreement for general corporate purposes.

The rate of interest on borrowings under the 2012 Credit Agreement is a function of LIBOR plus a margin, the federal funds rate plus a margin, or the prime rate plus a margin. The margin is adjustable based upon the Company's debt ratio (as defined in the 2012 Credit Agreement). As of May 31, 2012, the LIBOR margin for the Term A Facility and the Revolving Credit Facility is 1.75%; and the LIBOR margin for the Term A-1 Facility is 2.0%.

The obligations under the 2012 Credit Agreement are guaranteed by certain of its U.S. subsidiaries. These obligations are also secured by a pledge of (i)  100% of the ownership interests in certain of the Company's U.S. subsidiaries and (ii)  55-65% of certain interests of certain of the Company's foreign subsidiaries.

The Company and its subsidiaries are also subject to covenants that are contained in the 2012 Credit Agreement, including those restricting the incurrence of additional indebtedness (including guarantees of indebtedness), additional liens, mergers and consolidations, the payment of dividends, the making of certain investments, prepayments of certain debt, transactions with affiliates, agreements that restrict the Company's non-guarantor subsidiaries from paying dividends, and dispositions of property, in each case subject to numerous conditions, exceptions and thresholds. The financial covenants are limited to a minimum interest coverage ratio and a maximum net debt coverage ratio.

As of May 31, 2012, under the 2012 Credit Agreement, the Company had outstanding Term A Facility of $550.0 million bearing an interest rate of 2.0%, Term A-1 Facility of $250.0 million bearing an interest rate of 2.2%, Revolving Credit Facility of $26.2 million bearing an interest rate of 4.0%, outstanding letters of credit of $13.4 million, and $810.4 million in revolving loans available to be drawn.

As of May 31, 2012, the required principal repayments of the Term A Facility and the Term A-1 Facility for the remaining nine months of fiscal 2013 and for each of the five succeeding fiscal years and thereafter are as follows:

 
Term A
Facility
 
Term A-1
Facility
 
Total
(in millions)
 
 
 
 
 
2013
$
13.7

 
$
1.3

 
$
15.0

2014
27.5

 
2.5

 
30.0

2015
41.3

 
2.5

 
43.8

2016
55.0

 
2.5

 
57.5

2017
55.0

 
2.5

 
57.5

2018
357.5

 
2.5

 
360.0

Thereafter
—

 
236.2

 
236.2

 
$
550.0

 
$
250.0

 
$
800.0



In April 2012, the Company transitioned its interest rate swap agreements to a one-month LIBOR base rate versus the then existing three-month LIBOR base rate. Accordingly, the Company entered into new interest rate swap agreements which were designated as cash flow hedges of $500.0 million of the Company's floating LIBOR rate debt. In addition, the then existing interest rate swap agreements were dedesignated by the Company and the Company entered into additional undesignated interest rate swap agreements for $500.0 million to offset the prospective impact of the newly undesignated interest rate swap agreements. The unrealized losses in AOCI related to the dedesignated interest rate swap agreements are being reclassified from AOCI ratably into earnings in the same period in which the original hedged item is recorded in the Consolidated Statements of Comprehensive (Loss) Income. Accordingly, the Company has fixed its interest rates on $500.0 million of the Company's floating LIBOR rate debt at an average rate of 2.8% (exclusive of borrowing margins) through September 1, 2016. For the three months ended May 31, 2012, the Company reclassified net losses of $2.1 million, net of income tax effect, from AOCI to interest expense, net on the Company's Consolidated Statements of Comprehensive (Loss) Income. The Company did not reclassify any amount from AOCI to interest expense, net on its Consolidated Statements of Comprehensive (Loss) Income for the three months ended May 31, 2011.

Senior notes -
On April 17, 2012, the Company issued $600.0 million aggregate principal amount of 6% Senior Notes due May 2022 (the “April 2012 Senior Notes”). The net proceeds of the offering ($591.4 million) were used for general corporate purposes, including, among others, reducing the outstanding indebtedness under the Company's prior senior credit facility and common stock share repurchases under the 2013 Authorization (as defined in Note 11). Interest on the April 2012 Senior Notes is payable semiannually on May 1 and November 1 of each year, beginning November 1, 2012. The April 2012 Senior Notes are redeemable, in whole or in part, at the option of the Company at any time at a redemption price equal to 100% of the outstanding principal amount plus a make whole payment based on the present value of the future payments at the adjusted Treasury Rate plus 50 basis points. The senior notes are senior unsecured obligations and rank equally in right of payment to all existing and future senior unsecured indebtedness of the Company. Certain of the Company's significant U.S. operating subsidiaries guarantee the senior notes, on a senior unsecured basis. As of May 31, 2012, the Company had outstanding $600.0 million aggregate principal amount of April 2012 Senior Notes.

Debt payments -
Principal payments required under long-term debt obligations (excluding unamortized discount of $5.0 million) for the remaining nine months of fiscal 2013 and for each of the five succeeding fiscal years and thereafter are as follows:

(in millions)
 
2013
$
28.2

2014
36.4

2015
550.0

2016
59.6

2017
757.6

2018
1,060.0

Thereafter
836.3

 
$
3,328.1