5. INDEBTEDNESS

6 Months Ended

Jun. 30, 2011

Debt Disclosure [Text Block]

5. INDEBTEDNESS

Long-term debt and capital lease obligations at September 30, 2011 and December 31, 2010 are as follows (in thousands):

	September 30, 2011			December 31, 2010
Borrowings on credit facility	$	196,277		$	173,338
Capital lease obligations		7,969			10,406
Subtotal		204,246			183,744
Less current portion		(3,864	)		(3,577	)
Total long-term debt and capital lease obligations	$	200,382		$	180,167

During 2010, we entered into a new credit facility expiring in May 2014 and repaid and terminated our then existing credit facility. Following the retirement of our Term A loan in connection with our PGiSend sale, our facility consists of a $275.0 million revolver and an uncommitted $75.0 million accordion feature. Our subsidiary, American Teleconferencing Services, Ltd., or ATS, is the borrower under our credit facility, with PGi and certain of our material domestic subsidiaries guaranteeing the obligations of ATS under the credit facility, which is secured by substantially all of our assets and the assets of our material domestic subsidiaries. In addition, we have pledged as collateral all of the issued and outstanding stock of our material domestic subsidiaries and 65% of our material foreign subsidiaries. Proceeds drawn under our credit facility can be used for working capital, capital expenditures, acquisitions and other general corporate purposes. The annual interest rate applicable to borrowings under our new credit facility, at our option, is (1) the base rate (the greater of either the federal funds rate plus one-half of one percent, the prime rate or one-month LIBOR plus one and one-half percent) plus an applicable percentage that varies based on our consolidated leverage ratio at quarter end, or (2) LIBOR for one, two, three, nine or 12 months adjusted for a percentage that represents the Federal Reserve Board’s reserve percentage plus an applicable percentage that varies based on our consolidated leverage ratio at quarter end. The applicable percentages for base rate loans and LIBOR loans were 2.0% and 3.0%, respectively, at September 30, 2011. Our interest rate on LIBOR loans, which comprised substantially all of our outstanding borrowings as of September 30, 2011, was 3.2%. Our

credit facility contains customary restrictive covenants, including financial covenants, and otherwise contains terms substantially similar to the terms in our prior credit facility. 

At September 30, 2011, we were in compliance with the covenants under our credit facility. At September 30, 2011, we had $196.3 million of borrowings and $5.5 million in letters of credit outstanding under our credit facility.

Until its expiration in August 2010, we had a $100.0 million interest rate swap outstanding. This swap was designated as a cash flow hedge in 2008. Concurrent with the refinancing of our credit facility on May 10, 2010, we dedesignated the cash flow hedge associated with this interest rate swap. Any changes in fair value prior to designation as a hedge, subsequent to dedesignation as a hedge, and any ineffectiveness while designated were recognized as “Unrealized gain on change in fair value of interest rate swaps” as a component of “Other (expense) income” in our condensed consolidated statements of operations and amounted to $0.5 million and $1.0 million during the three and nine months ended September 30, 2010, respectively. As of December 31, 2010, our swaps had all expired, and no related balance is carried on our condensed consolidated balance sheets.