XML 92 R12.htm IDEA: XBRL DOCUMENT v2.4.0.8
Long-Term Obligations
12 Months Ended
Jul. 31, 2013
Debt Disclosure [Abstract]  
Long-Term Obligations
Long-Term Obligations

On February 1, 2012, the Company and certain of its subsidiaries entered into an unsecured $300 million multi-currency revolving loan agreement with a group of six banks that replaced and terminated the Company’s previous credit agreement. Under the new credit agreement, which has a final maturity date of February 1, 2017, the Company has the option to select either a base interest rate (based upon the higher of the federal funds rate plus one-half of 1% or the prime rate of Bank of America plus a margin based on the Company’s consolidated leverage ratio) or a Eurocurrency interest rate (at the LIBOR rate plus a margin based on the Company’s consolidated leverage ratio). At the Company’s option, and subject to certain conditions, the available amount under the new credit facility may be increased from $300 million up to $450 million.
In December 2012, the Company drew down $220 million from its revolving loan agreement to fund a portion of the purchase price of the acquisition of PDC. Prior to July 31, 2013, the Company repaid $181 million of the borrowing with cash on hand. The Company intends to repay the remainder of the borrowing within 12 months of the current period end, as such, the borrowing is classified as "Notes Payable" within current liabilities on the Consolidated Balance Sheets. During fiscal 2013, the maximum amount outstanding on the revolving loan agreement was $220 million. As of July 31, 2013, the outstanding balance on the credit facility was $39 million and there was $261 million available for future borrowing under the credit facility, which can be increased by $411 million at the Company's option, subject to certain conditions.
In February 2013, the Company entered into an unsecured $26.2 million multi-currency line of credit in China. The line of credit supports USD-denominated or RMB-denominated borrowing to fund working capital and operations for the Company's Chinese entities. Borrowings under this facility may be made for a period up to one year from the date of borrowing with interest on the borrowings incurred equal to US Dollar LIBOR on the date of borrowing plus a margin based upon duration. There is no ultimate maturity on the facility and the facility is subject to periodic review and repricing. The Company is not required to comply with any financial covenants as part of this agreement. During fiscal 2013, the maximum amount outstanding was $11,613, comprised entirely of USD-denominated borrowings, which was the balance outstanding at July 31, 2013. As of July 31, 2013, there was $14,587 available for future borrowing under this credit facility.
As of July 31, 2013, borrowings on the revolving loan agreement and China line of credit were as follows:
 
July 31, 2013
 
Interest Rate
USD-denominated borrowing on revolving loan agreement
$
39,000

 
1.2787
%
USD-denominated borrowing on China line of credit
11,613

 
1.1201
%
Notes payable
$
50,613

 
1.2423
%

The Company had outstanding letters of credit of $3,570 and $3,762 at July 31, 2013 and July 31, 2012, respectively.
On May 13, 2010, the Company completed a private placement of €75.0 million aggregate principal amount of senior unsecured notes to accredited institutional investors. The €75.0 million of senior notes consists of €30.0 million aggregate principal amount of 3.71% Series 2010-A Senior Notes, due May 13, 2017 and €45.0 million aggregate principal amount of 4.24% Series 2010-A Senior Notes, due May 13, 2020, with interest payable on the notes semiannually. This private placement was exempt from the registration requirements of the Securities Act of 1933. The notes were not registered for resale and may not be resold absent such registration or an applicable exemption from the registration requirements of the Securities Act of 1933 and applicable state securities laws. The notes have certain prepayment penalties for repaying them prior to maturity. The notes have been fully and unconditionally guaranteed on an unsecured basis by the Company’s domestic subsidiaries.
During fiscal 2004 through fiscal 2007, the Company completed three private placement note issuances totaling $500 million in ten-year fixed rate notes with varying maturity dates to institutional investors at interest rates varying from 5.14%to 5.33%. The notes must be repaid equally over seven years, with initial payment due dates ranging from 2008 to 2011, with interest payable on the notes due semiannually on various dates throughout the year, which began in December 2004. The private placements were exempt from the registration requirements of the Securities Act of 1933. The notes were not registered for resale and may not be resold absent such registration or an applicable exemption from the registration requirements of the Securities Act of 1933 and applicable state securities laws. The notes have certain prepayment penalties for repaying them prior to the maturity date. Under the debt agreement, the Company made scheduled principal payments of $61.3 million during each of the years ended July 31, 2013.
The Company’s debt and revolving loan agreements require it to maintain certain financial covenants. The Company’s June 2004, February 2006, March 2007, and May 2010 private placement debt agreements require the Company to maintain a ratio of debt to the trailing twelve months EBITDA, as defined in the debt agreements, of not more than a 3.5 to 1.0 ratio (leverage ratio). As of July 31, 2013, the Company was in compliance with the financial covenant of the June 2004, February 2006, March 2007, and May 2010 private placement debt agreements, with the ratio of debt to EBITDA, as defined by the agreements, equal to 1.6 to 1.0. Additionally, the Company’s February 2012 revolving loan agreement requires the Company to maintain a ratio of debt to trailing twelve months EBITDA, as defined by the debt agreement, of not more than a 3.25 to 1.0 ratio. The revolving loan agreement requires the Company’s trailing twelve months EBITDA to interest expense of not less than a 3.0 to 1.0 ratio (interest expense coverage). As of July 31, 2013, the Company was in compliance with the financial covenants of the revolving loan agreement, with the ratio of debt to EBITDA, as defined by the agreement, equal to 1.6 to 1.0 and the interest expense coverage ratio equal to 9.2 to 1.0
Long-term obligations consist of the following as of July 31:
 
 
2013
 
2012
Euro-denominated notes payable in 2017 at a fixed rate of 3.71%
 
$
39,900

 
$
36,912.0

Euro-denominated notes payable in 2020 at a fixed rate of 4.24%
 
59,850

 
55,368

USD-denominated notes payable through 2014 at a fixed rate of 5.14%
 
18,750

 
37,500

USD-denominated notes payable through 2016 at a fixed rate of 5.30%
 
78,428

 
104,571

USD-denominated notes payable through 2017 at a fixed rate of 5.33%
 
65,486

 
81,857

 
 
$
262,414

 
$
316,208

Less current maturities
 
$
(61,264
)
 
$
(61,264
)
 
 
$
201,150

 
$
254,944


The estimated fair value of the Company’s long-term obligations was $276,132 and $338,668 at July 31, 2013 and July 31, 2012, respectively, as compared to the carrying value of $262,414 and $316,208 at July 31, 2013 and July 31, 2012, respectively. The fair value of the long-term obligations, which were determined using the market approach based upon the interest rates available to the Company for borrowings with similar terms and maturities, were determined to be Level 2 under the fair value hierarchy. Due to the short-term nature and variable interest rate pricing of the Company's revolving debt, it is determined that the carrying value of the debt equals the fair value of the debt.
Maturities on long-term debt are as follows:
Years Ending July 31,
 
2014
$
61,264

2015
42,514

2016
42,514

2017
56,272

2018

Thereafter
59,850

 
 
Total
$
262,414