NOTES PAYABLE AND LONG-TERM DEBT

12 Months Ended

Jul. 31, 2011

Debt Disclosure [Abstract]

NOTES PAYABLE AND LONG-TERM DEBT

NOTE 8 – NOTES PAYABLE AND LONG-TERM DEBT

On November 30, 2010, the Company established a commercial paper program under which the Company may issue up to $600,000 of unsecured commercial paper notes. The Company’s board of directors has authorized debt financings through the issuance of commercial paper plus borrowings under the Company’s senior revolving credit facility of up to a maximum aggregate amount outstanding at any time of $600,000. The proceeds of the commercial paper issuances were used for general corporate purposes, including paying down existing balances under the Company’s senior revolving credit facility.

As of July 31, 2011, the Company had $214,957 of outstanding commercial paper, all of which is recorded as current liabilities under notes payable in the Company’s consolidated balance sheet. Commercial paper issuances during the year carried interest rates ranging between 0.37% and 0.47% and original maturities between 22 and 61 days.

Long-term debt consists of:

	2011			2010
Senior revolving credit facility, due in fiscal year 2015 (a)	$	–		$	250,000
5% Senior Notes, due in fiscal year 2020, net of discount (b)		373,228			373,027
Japanese Yen (“JPY”) denominated loan, due in fiscal year 2015 (c)		115,803			104,166
Other		3,434			16,116
Total long-term debt		492,465			743,309
Current portion		(511	)		(1,956	)
Long-term debt, net of current portion	$	491,954		$	741,353

(a) On July 13, 2010, the Company entered into a five-year $500,000 unsecured senior revolving credit facility (the “New Facility”) with a syndicate of banks, which expires on July 13, 2015. The Company terminated the existing $500,000 senior revolving credit facility, which was originally due in fiscal year 2011 (the “Prior Facility”). Simultaneous with entry into the New Facility, the Company borrowed approximately $295,000, principally to: (1) redeem all $280,000 outstanding of the 6.00% Senior Notes originally due in fiscal year 2013 (the “Prior Notes”) and, (2) pay a portion of the redemption premium on the Prior Notes of $28,268 (other funds were used to pay the balance of approximately $13,268). In connection with the New Facility, the Company incurred deferred financing costs of $2,856, which are being amortized to interest expense over the term of the New Facility. In addition, the Company wrote-off approximately $139 of unamortized deferred financing costs related to the Prior Facility, which has been reflected as a loss on the extinguishment of debt. Letters of credit outstanding against the New Facility as of July 31, 2011 were approximately $8,523.

Borrowings under the new facility bear interest at either a variable rate based upon the London InterBank Offered Rate (U.S. dollar, British Pound, Euro, Swiss Franc and Japanese Yen borrowings) or the European Union Banking Federation Rate (Euro borrowings) or at the prime rate of the Facility Agent (U.S. dollar borrowing only).

The New Facility contains customary affirmative and negative covenants, financial covenants, representations and warranties and events of defaults. The financial covenants are as follows:

i.	Minimum interest coverage ratio: The Ratio of Earnings Before Net Interest, Taxes, Depreciation, Amortization and the Non-Cash Portion of Non-Recurring Charges and Income (“EBITDA”) to Net Interest Expense shall not be less than 3.50 to 1.00, computed on the basis of cumulative results for the most recently ended four consecutive quarters.
ii.	Maximum funded debt ratio: The Ratio of Consolidated Funded Debt to EBITDA shall not exceed 3.50 to 1.00, EBITDA computed on the basis of cumulative results for the most recently ended four consecutive quarters.

In addition, the New Facility includes other covenants that under certain circumstances can restrict the Company’s ability to incur additional indebtedness, make investments and other restricted payments, enter into sale and leaseback transactions, create liens and sell assets. As of July 31, 2011, the Company was in compliance with all related financial and other restrictive covenants, including limitations on indebtedness, and had no balances outstanding under the New Facility.

(b)	On June 18, 2010, the Company issued $375,000 of publicly traded 5.00% Senior Notes, due 2020 (the “New Notes”). After the closing of the New Notes, the Company received proceeds (net of the discount on the New Notes of $2,006 and underwriting fees of $2,438) of $370,556. The Company used the net proceeds from this offering principally (1) to repay its then outstanding balance on the Prior Facility, and (2) for general corporate purposes. The Prior Notes, originally due August 1, 2012, were fully redeemed in July 2010 after the satisfaction of a 30-day notice period. In connection with this redemption, the Company recorded a loss on extinguishment of debt totaling $31,374, primarily comprised of the aforementioned redemption premium and the recognition of previously deferred financing costs related to the Prior Notes. In connection with the New Notes, the Company incurred deferred financing costs of $3,455, which are being amortized to interest expense over the term of the New Notes.
	The notes are unsecured and unsubordinated obligations of the Company and rank pari passu to its other outstanding unsecured and unsubordinated indebtedness.
(c)	On May 26, 2010, the Company refinanced its loan of JPY 9 billion (approximately $115,803 as of July 31, 2011), which was originally due on June 20, 2010, to May 26, 2015. Under the new financing agreement, interest is fixed at a rate of 2.33%. Previously, the interest payments were at a variable rate based upon Yen LIBOR. The Company designated this borrowing as a non-derivative hedge of a portion of its net JPY investment in a Japanese subsidiary. The aggregate annual maturities of long-term debt during fiscal years 2012 through 2016 are approximately as follows:

2012	$	511
2013		473
2014		422
2015		116,206
2016		420

Interest expense, net, for fiscal years 2011, 2010 and 2009 is comprised of:

	2011		2010		2009
Interest expense(i)	$	26,055	$	19,910	$	36,864
Interest income		7,152		5,586		8,728
Interest expense, net	$	18,903	$	14,324	$	28,136

(i) For fiscal years 2011, 2010 and 2009, interest expense was (reduced)/increased by $(485), $(6,807) and $7,684, respectively, related to Income taxes payable. See Note 11, Income Taxes for further discussion.

The weighted average interest rates on notes payable at the end of fiscal years 2011 and 2010 were 0.38% and 0.20%, respectively. The weighted-average borrowing rate was 3.16% and 3.55% as of July 31, 2011 and July 31, 2010, respectively.

As of July 31, 2011, the Company had available unsecured credit facilities, totaling approximately $178,830, with $4,034 in compensating balances. These credit facilities provide the Company’s foreign subsidiaries with short-term liquidity and overdraft protection, and support various programs (such as guarantee, performance bond and warranty) mandated by customers. At July 31, 2011, there were no borrowings under these facilities. There was $75,182 outstanding under these credit facilities which were committed to the aforementioned programs.