Note 6 — Financing Arrangements

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

	February 28,			May 31,
	2014			2013

Revolving credit facility expiring April 24, 2018 with interest payable monthly	$	140.0		$	120.0
Secured credit facility (secured by aircraft and related engines and components) due April 23, 2015 with floating interest rate, payable monthly	32.3			39.2
Note payable due March 9, 2017 with floating interest rate, payable semi-annually on June 1 and December 1	30.0			40.0
Notes payable due January 15, 2022 with interest at 7.25% payable semi-annually on January 15 and July 15	332.8			333.4
Convertible notes payable due March 1, 2014 with interest at 1.625% payable semi-annually on March 1 and September 1	68.4			65.9
Convertible notes payable due March 1, 2016 with interest at 2.25% payable semi-annually on March 1 and September 1	45.1			43.5
Other(1)	65.8			66.6
Total debt	714.4			708.6
Current maturities of debt	(87.8		)	(86.4		)
Long-term debt	$	626.6		$	622.2

(1) Included in Other at February 28, 2014 and May 31, 2013, respectively, is (i) a note payable due March 15, 2014 of $0.1 million and $1.2 million, (ii) a mortgage loan (secured by Wood Dale, Illinois facility) due August 1, 2015 of $11.0 million and $11.0 million, (iii) convertible notes due February 1, 2015 of $29.7 million and $29.4 million, and (iv) an industrial revenue bond (secured by property, plant, and equipment) due August 1, 2018 of $25.0 million and $25.0 million.

The 1.625% convertible notes due March 1, 2014 were retired for $68.4 million cash in accordance with the terms of the indenture on March 3, 2014, the first business day following the maturity date.

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.

At February 28, 2014, the carrying value of our 7.25% bonds, 1.625% convertible notes and 2.25% convertible notes was $443.3 million and the estimated fair value was approximately $471.4 million. These debt issuances are classified as Level 2 in the fair value hierarchy. This classification is defined as a fair value determined using market-based inputs other than quoted prices that are observable for the liability, either directly or indirectly.

At February 28, 2014, the remaining variable rate and fixed rate debt had a fair value that approximates the carrying value of $268.4 million. These debt instruments are classified as Level 3 in the fair value hierarchy which is defined as a fair value determined based upon one or more significant unobservable inputs.

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 levels, fixed charge coverage ratio, leverage ratio, sales of assets, additional financing, purchase of our shares and other matters. We were in compliance with all covenants under our financing arrangements as of February 28, 2014.

Convertible Notes

As of February 28, 2014 and May 31, 2013, the long-term debt and equity component (recorded in capital surplus, net of income tax benefit) consisted of the following:

	February 28,			May 31,
	2014			2013
Long-term debt:
Principal amount	$	148.3		$	148.3
Unamortized discount	(5.1		)	(9.5		)
Net carrying amount	$	143.2		$	138.8

Equity component, net of tax	$	75.3		$	75.3

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; 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.

As of February 28, 2014 and 2013, 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,				February 28,
	2014		2013		2014		2013
Coupon interest	$	0.8	$	0.8	$	2.5	$	2.8
Amortization of deferred financing fees	0.1		0.1		0.3		0.4
Amortization of discount	1.5		2.3		4.4		7.9
Interest expense related to convertible notes	$	2.4	$	3.2	$	7.2	$	11.1