Debt

Borrowing Arrangements

The Company maintains a borrowing arrangement with a syndicate of banks, which was amended on December 7, 2011, and provides the Company with $735.0 million (“Line A”) in short-term lines of credit and $115.0 million (“Line B”) in long-term lines of credit. It also provides the Company with $90 million in letters of credit. Any amounts outstanding on letters of credit will reduce the amount available on the lines of credit. The Company had standby letters of credit outstanding of $30.1 million at December 31, 2012. As of December 31, 2012, $20.0 million in borrowings were outstanding on Line A and $25.0 million in borrowings were outstanding on Line B. Borrowings under the line of credit bear interest at variable interest rates, which are based off LIBOR plus an applicable spread. The maturity date for Line A is December 2014 and September 2015 for Line B. Draw downs that are less than 90 days are recorded net in the Consolidated Statements of Cash Flows.

The Company also has $28.1 million of lines of credit related to The Andersons Denison Ethanol LLC ("TADE"), a consolidated subsidiary. TADE entered into borrowing arrangements with a syndicate of financial institutions upon acquisition of the entity in the second quarter of 2012 which provides a $13.0 million short-term line of credit, a $15.1 million long-term line of credit, and a $12.4 million term loan. TADE had standby letters of credit outstanding of $0.8 million million at December 31, 2012, which reduces the amount available on the lines of credit. As of December 31, 2012, $4.2 million in borrowings were outstanding on the short-term line of credit, $9.4 million in borrowings were outstanding on the long-term line of credit and $12.4 million in borrowings were outstanding on the term loan. Borrowings under the lines of credit and the term loan bear interest at variable interest rates, which are based off LIBOR plus an applicable spread. The maturity date for the short-term line of credit is June 1, 2013, January 20, 2022 for the long-term line of credit and January 1, 2017 for the term loan. TADE was in compliance with all financial and non-financial covenants as of December 31, 2012, including but not limited to minimum working capital and net worth. TADE debt is collateralized by the mortgage on the ethanol facility and related equipment or other assets and is not guaranteed by the Company, therefore it is considered non-recourse debt.

The Company drew $55 million on the long-term syndicate line in the second quarter. A portion of this balance was paid down and replaced by a $19.3 million loan with a fixed interest rate of 3.29%, collateralized by rail assets, due in September of 2022. An additional $50 million was drawn on the long-term syndicate line in the fourth quarter to fund an acquisition and was subsequently paid down and replaced by a $55.3 million, 15-year loan with a fixed interest rate of 4.8% which is collateralized by the mortgage on several grain facilities. The long-term portion of the syndicate line can be drawn on and the resulting debt considered long-term when used for long-term purposes such as replacing long-term debt that is maturing, funding the purchase of long-term assets, or increasing permanent working capital when needed. The expectation at the time of drawing is that it will be kept open until more permanent replacement debt is established, until other long-term assets are sold, or earnings are generated to pay it down.

The Company’s short-term and long-term debt at December 31, 2012 and December 31, 2011 consisted of the following:



(in thousands)	December 31, 2012		December 31, 2011
Borrowings under short-term line of credit - nonrecourse	$	4,219	$	—
Borrowings under short-term line of credit - recourse	20,000		71,500
Total borrowings under short-term line of credit	$	24,219	$	71,500
Current maturities of long -term debt – nonrecourse	$	2,496	$	157
Current maturities of long-term debt – recourse	12,649		32,051
Total current maturities of long-term debt	$	15,145	$	32,208
Long-term debt, less current maturities – nonrecourse	$	20,067	$	797
Long-term debt, less current maturities – recourse	407,176		238,088
Total long-term debt, less current maturities	$	427,243	$	238,885

The following information relates to short-term borrowings:



	December 31,
(in thousands, except percentages)	2012			2011			2010
Maximum amount borrowed	$	553,400		$	601,500		$	305,000
Weighted average interest rate	1.96		%	2.73		%	3.69		%

Long-Term Debt

Recourse Debt

Long-term debt consists of the following:



	December 31,
(in thousands, except percentages)	2012		2011
Senior note payable, 4.55%, payable at maturity, due 2012	$	—	$	25,000
Senior note payable, 5.52%, payable at maturity, due 2017	25,000		25,000
Senior note payable, 6.10%, payable at maturity, due 2014	25,000		25,000
Senior note payable, 6.12%, payable at maturity, due 2015	61,500		61,500
Senior note payable, 6.78%, payable at maturity, due 2018	41,500		41,500
Note payable, 6.00%, $2 million annually, plus interest, due 2021 (a)	27,833		—
Note payable, 4.76%, payable in increasing amounts ($1.3 million for 2013) plus interest, due 2028 (a)	55,300		—
Note payable, variable rate (2.71% at December 31, 2012), payable in increasing amounts ($1.1 million for 2013) plus interest, due 2023 (a)	24,188		—
Note payable, 3.29%, payable in increasing amounts ($1.2 million for 2013) plus interest, due 2022 (a)	26,533		—
Note payable, variable rate (1.94% at December 31, 2012), payable at maturity, due 2015	25,000		—
Note payable, variable rate (1.46% at December 31, 2012), payable $0.4 million monthly, plus interest, due 2015	12,058		—
Note payable, variable rate (1.71% at December 31, 2012), payable in increasing amounts ($1.0 million for 2013) plus interest, due 2023 (a)	12,815		13,715
Note payable, variable rate (1.02% at December 31, 2012), $0.7 million annually, plus interest, due 2016 (a)	9,450		10,150
Note payable, 8.5%, payable monthly in varying amounts ($0.1 million for 2013) plus interest, due 2016 (a)	1,079		1,160
Industrial development revenue bonds:
Variable rate (2.60% at December 31, 2012), due 2017 (a)	8,408		8,881
Variable rate (2.08% at December 31, 2012), due 2019 (a)	4,650		4,650
Variable rate (2.20% at December 31, 2012), due 2025 (a)	3,100		3,100
Variable rate (1.89% at December 31, 2012), due 2036 (a)	21,000		21,000
Debenture bonds, 2.65% to 5.00%, due 2014 through 2027	35,411		29,483
	419,825		270,139
Less: current maturities	12,649		32,051
	$	407,176	$	238,088

(a) Debt is collateralized by first mortgages on certain facilities and related equipment or other assets with a book value of $141.9 million.

Prior to year end, the Company entered into an agreement to extend its $25 million series A-2 senior note set to expire in March 2013 to March 2017. The interest rate will reset to a new rate of 3.72% in March 2013. There were no changes to any of the other series A senior notes. The Company also obtained a $24.2 million, ten-year loan with a fixed interest rate of 2.71% which is collateralized by the mortgage on several grain facilities. The new variable rate, $12.1 million note due in 2015 relates to financing obtained for the phased implementation of an enterprise resource planning system. In addition, a $27.8 million loan was assumed in conjunction with the Green Plains Grain Company asset acquisition (discussed in Note 12).

During the year, the Company issued debenture bonds under a new registration statement. At December 31, 2012, the Company had $7.5 million of five-year term debenture bonds bearing interest at 2.65%, $5.6 million of ten-year term debenture bonds bearing interest at 3.50% and $5.2 million of fifteen-year term debenture bonds bearing interest at 4.50% available for sale under the new registration statement.

The Company's short-term and long-term borrowing agreements include both financial and non-financial covenants that, among other things, require the Company at a minimum to maintain:


•	tangible net worth of not less than $300 million


•	current ratio net of hedged inventory of not less than 1.25 to 1


•	debt to capitalization ratio of not more than 70%


•	asset coverage ratio of not more than 75%


•	interest coverage ratio of not less than 2.75 to 1

The Company was in compliance with all covenants at and during the years ended December 31, 2012 and 2011.

The aggregate annual maturities of long-term debt are as follows: 2013 -- $12.6 million; 2014 -- $40.2 million; 2015 -- $104.6 million; 2016 -- $23.0 million; 2017 -- $46.4 million; and $193.0 million thereafter.

Non-Recourse Debt

The Company's non-recourse long-term debt consists of the following:



	December 31,
(in thousands, except percentages)	2012		2011
Note payable, variable rate (3.71% at December 31, 2012), payable at maturity, due 2022	$	9,378	$	—
Note payable, variable rate (3.71% at December 31, 2012), payable $3.1 million annually, due 2017	12,400		—
Note payable, 6.37%, payable $24 monthly, due 2014	785		954
	22,563		954
Less: current maturities	2,496		157
	$	20,067	$	797

The Company's non-recourse debt held by TADE includes separate financial covenants relating solely to the collateralized TADE assets. Triggering one or more of these convenants for a specified period of time could result in the acceleration in amortization of the outstanding debt. The covenants require the following:


•	tangible net worth of not less than $27 million (increasing to $33 million effective December 31, 2013, $36 million effective December 31, 2014 and $40 million effective December 31, 2015)


•	working capital not less than $5.0 million (increasing to $8 million effective December 31, 2013)


•	debt service coverage ratio of not less than 1.25 to 1.00 beginning December 31, 2013

The aggregate annual maturities of non-recourse, long-term debt are as follows: 2013 -- $2.5 million; 2014 -- $3.7 million; 2015 -- $3.1 million; 2016 -- $3.1 million; 2017 -- $0.8 million and $9.4 million thereafter.

Interest paid (including interest on short-term lines of credit) amounted to $21.7 million, $25.2 million and $20.0 million in 2012, 2011 and 2010, respectively.