Note 6 — Financing Arrangements

A summary of the carrying amount of our debt is as follows:

	February 28,			May 31,
	2013			2012

Revolving credit facility expiring April 12, 2016 with interest payable monthly	$	305.0		$	280.0
Revolving credit facility (secured by aircraft and related engines and components) due April 23, 2015 with floating interest rate, payable monthly	27.4			33.0
Revolving credit facility subject to annual review in March with interest payable quarterly	0.6			0.6
Note payable due July 19, 2012 with interest at 7.22%, payable monthly	—			8.4
Note payable due March 15, 2014 with floating interest rate, payable monthly	1.6			2.6
Note payable due March 9, 2017 with floating interest rate, payable quarterly	40.0			50.0
Note payable due January 15, 2022 with interest at 7.25%, payable semi-annually on January 15 and July 15	172.2			172.1
Mortgage loan (secured by Wood Dale, Illinois facility) due August 1, 2015 with interest at 5.01%	11.0			11.0
Convertible notes payable due March 1, 2014 with interest at 1.625%, payable semi-annually on March 1 and September 1	65.0			68.5
Convertible notes payable due February 1, 2015 with interest at 1.75%, payable semi-annually on February 1 and August 1	29.3			—
Convertible notes payable due March 1, 2016 with interest at 2.25%, payable semi-annually on March 1 and September 1	43.0			46.1
Convertible notes payable due February 1, 2026 with interest at 1.75%, payable semi-annually on February 1 and August 1	2.7			94.9
Industrial revenue bond (secured by trust indenture on property, plant and equipment) due August 1, 2018 with floating interest rate, payable monthly	25.0			25.0
Total debt	722.8			792.2
Current maturities of debt	(22.2		)	(122.8		)
Long-term debt	$	700.6		$	669.4

During the third quarter of fiscal 2013, pursuant to the terms of the indenture, certain holders of our 1.75% Convertible Senior Notes due 2026 (the “Securities”) exercised the right to surrender their Securities for purchase by us (the “Put Option”). The Put Option entitled each holder of the Securities to surrender to us for purchase all or any part of such holder’s Securities at a purchase price equal to 100% of the principal amount, plus accrued interest. The aggregate purchase price including principal, accrued and unpaid interest for the Securities surrendered for purchase pursuant to the Put Option was $63.6 million. The purchases were funded primarily by cash on hand and free cash flow.

On February 14, 2013, we completed an exchange agreement with an institutional holder to exchange $22.7 million aggregate principal amount of the Securities, plus cash in the amount of $7.3 million for a new $30.0 million convertible note (the “New Note”). The New Note was issued in a private placement, is subject to customary resale restrictions, and has no registration rights. The New Note matures on February 1, 2015 unless redeemed earlier by us with a 30 days’ notice to the holder at a call price reflecting a yield to maturity of 3.75% from inception. We may redeem the New Note at any time before February 1, 2014 in the event of a change in control or at any time from February 1, 2014 through February 1, 2015 with a call price at maturity of 104.038. Upon conversion, the holder of the New Note shall be entitled to receive only cash and not shares of common stock. The New Note bears interest at a coupon rate of 1.75% per year, payable semi-annually on February 1 and August 1.

Those holders that did not surrender their Securities for purchase pursuant to the Put Option retained the right to convert their Securities, subject to the terms, conditions and adjustments applicable to the Securities. At February 28, 2013, the Securities remaining outstanding were $2.7 million. We expect to repurchase the remaining portion during the fourth quarter of fiscal 2013.

During the nine-month period ended February 28, 2013, we repurchased $6.4 million par value of our 1.625% convertible notes due March 1, 2014, $5.5 million par value of our 2.25% convertible notes due March 1, 2016 and $11.0 million par value of our 1.75% convertible notes due February 1, 2026. The 1.625% notes, 2.25% notes and 1.75% notes were repurchased for $6.1 million, $4.9 million and $11.0 million cash, respectively, with a total loss of $0.3 million after consideration of unamortized discount and debt issuance costs. The losses on the debt repurchases for the 1.625%, 2.25% and 1.75% convertible notes are recorded in Loss on extinguishment of debt on the condensed consolidated statements of income.

During the nine-month period ended February 28, 2013, we paid $8.4 million principal amount of our 7.22% notes payable due July 19, 2012.

At February 28, 2013, the face value of our debt was $736.5 million and the estimated fair value was approximately $743.8 million. The fair value amounts of our long-term debt securities are estimated using significant other observable inputs including quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. The debt is classified as Level 2 in the fair value hierarchy.

On January 22, 2013, we exchanged all of the outstanding unregistered 7.25% Senior Notes due 2022, which we issued in an exempt offering on January 23, 2012, for substantially identical notes that were registered under the Securities Act of 1933. These notes are now fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by substantially all of our existing domestic and foreign subsidiaries.

We are subject to a number of covenants under our financing arrangements, including restrictions which relate to the payment of cash dividends, maintenance of minimum net working capital and minimum net worth levels, fixed charge coverage ratio, sales of assets, additional financing, purchase of our shares and other matters. We are in compliance with all financial covenants under our financing arrangements.

Convertible Notes

As of February 28, 2013 and May 31, 2012, the long-term debt and equity components (recorded in capital surplus, net of income tax benefit) consisted of the following:

	February 28,			May 31,
	2013			2012
Long-term debt:
Principal amount	$	150.9		$	229.3
Unamortized discount	(10.9		)	(19.8		)
Net carrying amount	$	140.0		$	209.5

Equity component, net of tax	$	75.3		$	74.8

The discount on the liability component of long-term debt is being amortized using the effective interest method based on an effective rate of 6.82% for our 1.625% convertible notes, 5.00% for our 1.75% convertible notes due February 1, 2015 and 7.41% for our 2.25% convertible notes. For our 1.625%, 1.75% and 2.25% convertible notes, the discount is being amortized through their respective maturity dates of March 1, 2014, February 1, 2015 and March 1, 2016. For our 1.75% convertible notes due February 1, 2026, the discount was amortized through February 1, 2013, which was the first put date for those notes.

As of February 28, 2013 and February 29, 2012, for each of our convertible note issuances, the “if converted” value does not exceed its principal amount.

The interest expense associated with the convertible notes was as follows:

	Three Months Ended				Nine Months Ended
	February 28/29,				February 28/29,
	2013		2012		2013		2012
Coupon interest	$	0.8	$	1.3	$	2.8	$	3.7
Amortization of deferred financing fees	0.1		0.2		0.4		0.6
Amortization of discount	2.3		3.3		7.9		9.8
Interest expense related to convertible notes	$	3.2	$	4.8	$	11.1	$	14.1