Debt

6 Months Ended

Jun. 30, 2012

Debt [Abstract]

Debt

Note 8 — Debt

Following is a summary of the Company’s outstanding debt at June 30, 2012:

	2011 Credit Agreement
(Amounts in thousands)	Senior secured credit facility due 2017			Senior secured incremental term loan due 2017			Second Lien Notes due 2018			Total Debt
Balance at December 31, 2011	$	339,232		$	146,656		$	325,000		$	810,888
Payments		—			(750	)		—			(750	)
Accretion of discount		65			162			—			227
Balance at June 30, 2012	$	339,297		$	146,068		$	325,000		$	810,365
Weighted average interest rate		4.36	%		4.38	%		13.25	%

2008 Senior Facility — In connection with the Company’s recapitalization transaction in May 2011 (the “2011 Recapitalization”), the 2008 senior facility was terminated. Prior to the termination, the Company was able to elect an interest rate for the 2008 senior facility at each reset period based on the JP Morgan prime bank rate or the Eurodollar rate. During the six months ended June 30, 2011, the Company elected the JP Morgan prime bank rate as its interest basis. The Company recognized $0.2 million of discount accretion through the “Interest expense” line in the Consolidated Statements of Income during the six months ending June 30, 2011.

2011 Credit Agreement — The Company may elect an interest rate under the agreement governing the Company’s senior secured credit facility (the “2011 Credit Agreement”) at each reset period based on the Bank of America (“BOA”) prime bank rate or the Eurodollar rate. The interest rate election may be made individually for the term loan, incremental term loan and each draw under the revolving credit facility. The interest rate is either the BOA prime rate plus 225 basis points or the Eurodollar rate plus 300 basis points. Since inception of the 2011 Credit Agreement, the Company elected the Eurodollar rate as its primary interest basis, with a minimal amount of the term debt at the BOA alternate base rate. Under the terms of the 2011 Credit Agreement, the interest rate determined using the Eurodollar rate has a minimum rate of 1.25 percent.

Fees on the daily unused availability under the revolving credit facility are 62.5 basis points. Substantially all of the Company’s non-financial assets are pledged as collateral for the loans under the 2011 Credit Agreement, with the collateral guaranteed by the Company’s material domestic subsidiaries. The non-financial assets of the material domestic subsidiaries are pledged as collateral for these guarantees. As of June 30, 2012, the Company had $137.3 million of availability under the revolving credit facility, net of $12.7 million of outstanding letters of credit that reduce the amount available. At June 30, 2012 there were no amounts outstanding under the revolving credit facility.

Amortization of the debt discount for each of the three and six months ended June 30, 2011 includes a pro-rata write-off of $0.1 million as a result of the term debt prepayment. Following is the debt discount amortization recorded in “Interest expense” in the Consolidated Statements of (Loss) Income for the three months and six months ended June 30:

	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands)	2012		2011		2012		2011
Amortization of debt discount	$	117	$	93	$	227	$	237
Write-off of debt discount upon prepayments		—		123		—		123
Total amortization of discount	$	117	$	216	$	227	$	360

Second Lien Notes —Prior to the fifth anniversary, the Company may redeem some or all of the second lien notes at a price equal to 100 percent of the principal, plus any accrued and unpaid interest plus a premium equal to the greater of one percent or an amount calculated by discounting the sum of (a) the redemption payment that would be due upon the fifth anniversary plus (b) all required interest payments due through such fifth anniversary using the treasury rate plus 50 basis points. Starting with the fifth anniversary, the Company may redeem some or all of the second lien notes at prices expressed as a percentage of the outstanding principal amount of the second lien notes plus accrued and unpaid interest, starting at approximately 107 percent on the fifth anniversary, decreasing to 100 percent on or after the eighth anniversary. Upon a change of control, the Company is required to make an offer to repurchase the second lien notes at a price equal to 101 percent of the principal amount plus accrued and unpaid interest. The Company is also required to make an offer to repurchase the second lien notes with proceeds of certain asset sales that have not been reinvested in accordance with the terms of the second lien notes or have not been used to repay certain debt.

Inter-creditor Agreement — In connection with the above financing arrangements, both the lenders under the 2011 Credit Agreement and the trustee on behalf of the holders of the second lien notes entered into an inter-creditor agreement under which the lenders and trustee have agreed to waive certain rights and limit the exercise of certain remedies available to them for a limited period of time, both before and following a default under the financing arrangements.

Debt Covenants and Other Restrictions — Borrowings under the Company’s debt agreements are subject to various covenants that limit the Company’s ability to: incur additional indebtedness; create or incur additional liens; effect mergers and consolidations; make certain acquisitions; sell assets or subsidiary stock; pay dividends and other restricted payments; invest in certain assets; and effect loans, advances and certain other transactions with affiliates. In addition, the 2011 Credit Agreement has a covenant that places limitations on the use of proceeds from borrowings under the facility.

The indenture governing the second lien notes contains a financial covenant requiring the Company to maintain a minimum liquidity ratio of at least 1:1 for certain assets to outstanding payment service obligations. The 2011 Credit Agreement also has quarterly financial covenants to maintain the following interest coverage and total leverage ratios:

	Interest Coverage Minimum Ratio		Total Leverage Not To Exceed
Present through September 30, 2012		2.00:1		4.75:1
December 31, 2012 through September 30, 2013		2.15:1		4.625:1
December 31, 2013 through September 30, 2014		2.15:1		4.375:1
December 31, 2014 through September 30, 2015		2.25:1		4.00:1
December 31, 2015 through September 30, 2016		2.25:1		3.75:1
December 31, 2016 through maturity		2.25:1		3.50:1

At June 30, 2012, the Company is in compliance with its financial covenants.

Deferred Financing Costs — During the three months ended June 30, 2011, the Company capitalized financing costs of $12.8 million associated with the 2011 Credit Agreement and $5.0 million for the amendment of the indenture governing the second lien notes. These costs were capitalized in “Other assets” in the Consolidated Balance Sheets and are being amortized over the term of the related debt using the effective interest method.

Amortization is recorded in “Interest expense” in the Consolidated Statements of Income. Following is a summary of the deferred financing costs at June 30, 2012:

	2011 Credit Agreement
(Amounts in thousands)	Senior secured credit facility			Senior secured incremental term			Senior revolving credit facility			Second Lien Notes			Total Deferred Financing Costs
Balance at December 31, 2011	$	6,882		$	3,092		$	3,523		$	16,649		$	30,146
Amortization of deferred financing costs		(586	)		(266	)		(402	)		(1,299	)		(2,553	)
Write-off of deferred financing costs		—			(14	)		—			—			(14	)
Balance at June 30, 2012	$	6,296		$	2,812		$	3,121		$	15,350		$	27,579

Interest Paid in Cash — The Company paid $15.9 million and $32.4 million of interest for the three and six months ended June 30, 2012, respectively, and $20.0 million and $38.7 million for the three and six months ended June 30, 2011, respectively.

Maturities — At June 30, 2012, debt totaling $481.0 million will mature in 2017 and $325.0 million will mature in 2018, while debt principal totaling $7.9 million will be paid in increments of $0.4 million quarterly through 2017.