Note G – Debt and Receivables Securitization

The following table summarizes our long-term debt and short-term borrowings outstanding at May 31, 2014 and 2013:


(in thousands)	2014		2013
Short-term borrowings	$	10,362	$	113,728
Floating rate senior notes due December 17, 2014		100,000		100,000
6.50% senior notes due April 15, 2020		149,912		149,888
4.60% senior notes due August 10, 2024		150,000		150,000
4.55% senior notes due April 15, 2026		249,472		-
Industrial revenue bonds due April 2019		2,024		2,084
Secured term loan		4,235		5,036
Other		320		320

Total debt		666,325		521,056
Less: current maturities and short-term borrowings		111,535		114,820

Total long-term debt	$	554,790	$	406,236

Short-term borrowings at May 31, 2014 consisted of $4,437,000 outstanding under a credit facility maintained by our consolidated affiliate, Worthington Aritas, that bears interest at a fixed rate of 5.60%, and $5,925,000 outstanding under a $9,500,000 credit facility maintained by our consolidated affiliate, Worthington Nitin Cylinders, that matures in November 2014 and bears interest at a variable rate. The applicable variable rate was 7.52% at May 31, 2014.

We maintain a $100,000,000 revolving trade accounts receivable securitization facility that expires in January 2015 (the “AR Facility”). The AR Facility was available throughout fiscal 2014 and fiscal 2013. 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 $100.0 million 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, 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, 2014, no undivided ownership interests in this pool of accounts receivable had been sold. Facility fees of $652,000, $983,000, and $1,232,000 were incurred during fiscal 2014, fiscal 2013 and fiscal 2012, respectively.

We maintain a $425,000,000 multi-year revolving credit facility (the “Credit Facility”) with a group of lenders that matures in May 2017. Borrowings under the Credit Facility have maturities of less than one year and given that our intention has been to repay them within a year, they have been classified as short-term borrowings within current liabilities on our consolidated balance sheets. However, we can also extend the term of amounts borrowed by renewing these borrowings for the term of the Credit Facility. We have the option to borrow at rates equal to an applicable margin over the LIBOR, Prime or Fed Funds rates. The applicable margin is determined by our credit rating. The average variable rate was 1.20% at May 31, 2014; however, no borrowings were outstanding at May 31, 2014. As discussed in “Note F – Guarantees,” we provided $14,332,000 in letters of credit for third-party beneficiaries as of May 31, 2014. While not drawn against at May 31, 2014, $11,732,000 of these letters of credit were issued against availability under the Credit Facility, leaving $413,268,000 available under the Credit Facility at May 31, 2014.

At May 31, 2014, 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 P – Derivative Instruments and Hedging Activities” for additional information regarding this interest rate swap agreement.

On April 13, 2014, we issued $250,000,000 aggregate principal amount of unsecured senior notes due on April 15, 2026 (the “2026 Notes”). The 2026 Notes bear interest at a rate of 4.55%. The 2026 Notes were sold to the public at 99.789% of the principal amount thereof, to yield 4.573% to maturity. We used a portion of the net proceeds from the offering to repay borrowings then outstanding under both the Credit Facility and AR Facility. Approximately $3,081,000, $1,906,000 $528,000 of the aggregate proceeds were allocated to the settlement of a derivative contract entered into in anticipation of the issuance of the 2026 Notes, debt issuance costs, and the debt discount, respectively. The debt discount, debt issuance costs and the loss on the derivative contract were recorded on the consolidated balance sheet as of May 31, 2014, 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 2026 Notes.

On August 10, 2012, we issued $150,000,000 aggregate principal amount of unsecured senior notes due August 10, 2024 (the “2024 Notes”). The 2024 Notes bear interest at a rate of 4.60%. The net proceeds from this issuance were used to repay a portion of the outstanding borrowings under our multi-year revolving credit facility and amounts outstanding under our revolving trade accounts receivable securitization facility.

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. Approximately $165,000, $1,535,000 and $1,358,000 of the aggregate proceeds were allocated to the debt discount, debt issuance costs, and the settlement of a derivative contract entered into in anticipation of the issuance of the 2020 Notes. The debt discount, debt issuance costs and the loss on the derivative contract were 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 continue to be recognized, through interest expense, in our consolidated statements of earnings over the remaining term of the 2020 Notes.

In connection with the acquisition of Worthington Industries Engineered Cabs, formerly Angus Industries, Inc. (“Angus”), on December 29, 2011, we assumed industrial revenue bonds (“IRBs”) issued by the South Dakota Economic Development Finance Authority that mature in April 2019 and had an outstanding principal balance of $2,024,000 at May 31, 2014. These IRBs require monthly payments of approximately $31,000 and bear interest at rates between 2.75% and 5.00%.

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)
2015	$	111,535
2016		1,238
2017		1,274
2018		1,341
2019		1,130
Thereafter		550,423

Total	$	666,941