Debt Obligations

3 Months Ended

Mar. 31, 2012

Debt Obligations

Debt outstanding at March 31, 2012 and December 31, 2011 is as follows:



	March 31, 2012				December 31, 2011
	Long-Term		Due Within One Year		Long-Term		Due Within One Year
Non-affiliated debt:
Senior Secured Credit Facilities:
Floating rate term loans due May 2013	$	—	$	—	$	446	$	8
Floating rate term loans due May 2015	907		16		910		15
Senior Secured Notes:
6.625% First Priority Senior Notes due 2020	450		—		—		—
8.875 % senior secured notes due 2018 (includes $6 of unamortized debt discount at March 31, 2012 and December 31, 2011)	994		—		994		—
Floating rate second-priority senior secured notes due 2014	120		—		120		—
9.00% Second-priority senior secured notes due 2020	574		—		574		—
Debentures:
9.2% debentures due 2021	74		—		74		—
7.875% debentures due 2023	189		—		189		—
8.375% sinking fund debentures due 2016	62		—		62		—
Other Borrowings:
Australia Facility due 2014	35		5		36		5
Brazilian bank loans	24		38		—		65
Capital Leases	10		1		11		1
Other	5		14		4		23
Total non-affiliated debt	3,444		74		3,420		117
Affiliated debt:
Affiliated borrowings due on demand	—		2		—		2
Total affiliated debt	—		2		—		2
Total debt	$	3,444	$	76	$	3,420	$	119

2012 Refinancing Activities

In March 2012, the Company issued $450 aggregate principal amount of 6.625% First-Priority Senior Secured Notes due 2020 at an issue price of 100%. The Company used the net proceeds, together with cash on hand to repay approximately $454 aggregate principal amount of existing term loans maturing May 5, 2013 under the Company’s senior secured credit facilities, effectively extending these maturities by an additional seven years. In conjunction with the Offering Transaction, the Company extended $171 of its $200 revolving line of credit facility commitments from lenders from February 2013 to December 2014. In connection with the refinancing activities, the lender commitments to the revolving line of credit facility were decreased to approximately $192 in the aggregate. The interest rate for loans made under the extended revolver commitments was increased to adjusted LIBOR plus 4.75% from adjusted LIBOR plus 4.50%. The commitment fee for the extended revolver commitments was decreased to 0.5% of the unused line from 4.5% of the unused line. Collectively, these transactions are referred to as the “March Refinancing Transactions.” The priority of the liens securing the collateral for the 6.625% Senior Secured Notes is pari passu to the liens in such collateral securing the Company's senior secured credit facilities.

The Company incurred approximately $13 in fees associated with the March Refinancing Transactions, which have been deferred and are recorded in “Other assets, net” in the unaudited Condensed Consolidated Balance Sheets. The deferred fees will be amortized over the contractual life of the respective debt obligations on an effective interest basis. Additionally, $1 in unamortized deferred financing fees were written-off related to the $454 of term loans under the Company's senior secured credit facility that were repaid and extinguished. These fees are included in “Other non-operating expense, net” in the unaudited Condensed Consolidated Statements of Operations.

Covenant Compliance

Two of the Company’s wholly-owned international subsidiaries expect to not be in compliance with a financial covenant under their respective loan agreements when they deliver their audited financial statements for the year ended December 31, 2011 in the second quarter of 2012. As of December 31, 2011, outstanding debt of approximately $31 was classified as “Debt payable within one year” in the unaudited Condensed Consolidated Balance Sheets. In March 2012, the Company subsequently obtained a covenant waiver from one of the respective banks, representing approximately $25 of the $31. As of March 31, 2012, the Company has reclassified $25 of the respective debt to “Long-term debt” in the unaudited Condensed Consolidated Balance Sheets. If a waiver is not obtained for the remaining portion, the Company has sufficient cash to repay such debt. Non-compliance with these covenants would not result in a cross-default under the Company’s amended senior secured credit facilities or the indentures that govern its notes.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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