Note G – Debt and Receivables Securitization

The following table summarizes our long-term debt and short-term borrowings outstanding at May 31:


(in thousands)	2012		2011
Short-term borrowings	$	274,923	$	132,956
Floating rate senior notes due December 17, 2014		100,000		100,000
6.50% senior notes due April 15, 2020		149,871		149,854
Industrial revenue bonds due March 2013		281		-
Industrial revenue bonds due April 2019		2,423		-
Secured term loan		5,816		-
Other		400		400

Total debt		533,714		383,210
Less: current maturities and short-term borrowings		276,252		132,956

Total long-term debt	$	257,462	$	250,254

We maintain a revolving trade accounts receivable securitization facility (the “AR Facility”), which expires in January 2013. The AR Facility was available throughout fiscal 2012 and fiscal 2011. During the third quarter of fiscal 2012, we increased our borrowing capacity under the AR Facility from $100,000,000 to $150,000,000. Pursuant to the terms of the AR Facility, certain of our subsidiaries sell their accounts receivable without recourse, on a revolving basis, to Worthington Receivables Corporation (“WRC”), a wholly-owned, consolidated, bankruptcy-remote subsidiary. In turn, WRC may sell without recourse, on a revolving basis, up to $150,000,000 of undivided ownership interests in this pool of accounts receivable to a multi-seller, asset-backed commercial paper conduit (the “Conduit”). Purchases by the Conduit are financed with the sale of A1/P1 commercial paper. We retain an undivided interest in this pool and are subject to risk of loss based on the collectability of the receivables from this retained interest. Because the amount eligible to be sold excludes receivables more than 90 days past due, receivables offset by an allowance for doubtful accounts due to bankruptcy or other cause, and concentrations over certain limits with specific customers and certain reserve amounts, we believe additional risk of loss is minimal. The book value of the retained portion of the pool of accounts receivable approximates fair value. As of May 31, 2012, the pool of eligible accounts receivable exceeded the $150,000,000 limit, and $135,000,000 of undivided ownership interests in this pool of accounts receivable had been sold. In accordance with the applicable accounting guidance, the net proceeds received and outstanding at May 31, 2012 and 2011, or $135,000,000 and $90,000,000, respectively, have been classified as short-term borrowings in our consolidated balance sheets. Facility fees of $1,232,000, $1,148,000 and $1,172,000 were incurred during fiscal 2012, fiscal 2011 and fiscal 2010, respectively.

Short-term borrowings at May 31, 2012, also included $135,610,000 of borrowings under our new $425,000,000 unsecured multi-year revolving credit facility (the “Credit Facility”) with a group of lenders, which was executed on May 4, 2012. The Credit Facility matures in May 2017 and replaced our $400,000,000 facility that was set to expire in May 2013. Borrowings under the Credit Facility have maturities of less than one year. Interest rates on borrowings and related facility fees are based on our senior unsecured long-term debt ratings as assigned by Standard & Poor’s Ratings Group and Moody’s Investors Service, Inc. The average variable rate was 1.29% at May 31, 2012. As discussed in “Note F – Guarantees,” we provided $10,982,000 in letters of credit for third-party beneficiaries as of May 31, 2012. While not drawn against at May 31, 2012, these letters of credit are issued against availability under the Credit Facility, leaving $278,408,000 available under the Credit Facility at May 31, 2012.

The remaining balance of short-term borrowings at May 31, 2012, consisted of $4,313,000 outstanding under a $9,500,000 credit facility maintained by our consolidated joint venture, WNCL. This credit facility matures in November 2012 and bears interest at a variable rate. The applicable variable rate was 2.50% at May 31, 2012.

At May 31, 2012, we had $100,000,000 aggregate principal amount of unsecured floating rate senior notes outstanding, which are due on December 17, 2014 (the “2014 Notes”) and bear interest at a variable rate equal to six-month LIBOR plus 80 basis points. However, we entered into an interest rate swap agreement whereby we receive interest on the $100,000,000 notional amount at the six-month LIBOR rate and we pay interest on the same notional amount at a fixed rate of 4.46%, effectively fixing the interest rate at 5.26%. See “Note O – Derivative Instruments and Hedging Activities” for additional information regarding this interest rate swap agreement.

On April 13, 2010, we issued $150,000,000 aggregate principal amount of unsecured senior notes due on April 15, 2020 (the “2020 Notes”). The 2020 Notes bear interest at a rate of 6.50%. The 2020 Notes were sold to the public at 99.890% of the principal amount thereof, to yield 6.515% to maturity. We used the net proceeds from the offering to repay a portion of the then outstanding borrowings under our multi-year revolving credit facility and amounts then outstanding under our revolving trade accounts receivable securitization facility. The proceeds on the issuance of the 2020 Notes were reduced for debt discount ($165,000), payment of debt issuance costs ($1,535,000) and settlement of a hedging instrument entered into in anticipation of the issuance of the 2020 Notes ($1,358,000). The debt discount, debt issuance costs and loss from treasury lock derivative are recorded on the consolidated balance sheets within long-term debt as a contra-liability, short- and long-term other assets and AOCI, respectively. Each will be recognized, through interest expense, in our consolidated statements of earnings over the term of the 2020 Notes.

In connection with the acquisition of Angus Industries, Inc. (“Angus”) on December 29, 2011, we assumed industrial revenue bonds (“IRBs”) issued by the South Dakota Economic Development Finance Authority that had outstanding principal balances of $620,000 and $2,490,000 and mature in March 2013 (the “2013 IRBs”) and April 2019 (the “2019 IRBs”), respectively. The 2013 IRBs require monthly payments of $28,000 and bear interest at rates between 3.75% and 5.25%. The 2019 IRBs require monthly payments of approximately $31,000 and bear interest at rates between 2.75% and 5.00%. Refer to “Note N – Acquisitions” for additional information regarding the acquisition of Angus.

On April 27, 2012, we executed a $5,880,000 seven-year term loan that matures on May 1, 2019 and requires monthly payments of $76,350. The loan bears interest at a rate of 2.49% and is secured by an aircraft that was purchased with its proceeds.

Maturities on long-term debt and short-term borrowings in the next five fiscal years, and the remaining years thereafter, are as follows:


(in thousands)
2013	$	276,252
2014		1,172
2015		101,202
2016		1,238
2017		1,274
Thereafter		152,576

Total	$	533,714