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INDEBTEDNESS
12 Months Ended
Dec. 31, 2012
INDEBTEDNESS [Abstract]  
INDEBTEDNESS

7. INDEBTEDNESS

 

Long-term debt and capital lease obligations at December 31, 2012 and 2011 are as follows (in thousands):

 

    December 31,
2012
    December 31,
2011
 
                 
Borrowings on credit facility   $ 178,062     $ 192,885  
Capital lease obligations     4,907       6,923  
Subtotal     182,969       199,808  
Less current portion     (3,137 )     (3,845 )
Total long-term debt and capital lease obligations   $ 179,832     $ 195,963  

 

The fair value of our long-term debt and capital lease obligations approximated carrying value at December 31, 2012 and 2011. Fair value is determined using current interest rates offered to us on debt of the same remaining maturity and characteristics, including credit quality.



 

Future minimum lease payments under capital leases consist of the following at December 31, 2012 (in thousands):

 

2013   $ 3,564  
2014     923  
2015     653  
2016     253  
Total minimum lease payments     5,393  
Less amounts representing interest     (486 )
Present value of minimum lease payments     4,907  
Less current portion     (3,137 )
    $ 1,770  

 

Our credit facility consists of a $250.0 million revolver, a $50.0 million Term A loan and an uncommitted $75.0 million accordion feature. Our subsidiary, 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 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, six, nine or twelve 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 percentage for base rate loans and LIBOR loans were 1.50% and 2.50%, respectively, at December 31, 2012 under our credit facility. Our interest rate on LIBOR loans, which comprised materially all of our outstanding borrowings as of December 31, 2012, was 2.75%. In addition, we pay a commitment fee on the unused portion of our credit facility that is based on our consolidated leverage ratio at quarter end. As of December 31, 2012, the rate applied to the unused portion of our credit facility was 0.4%. Our credit facility contains customary terms and restrictive covenants, including financial covenants.

 

At December 31, 2012, we were in compliance with the covenants under our credit facility. At December 31, 2012, we had $178.1 million of borrowings and $5.5 million in letters of credit outstanding under our credit facility.

 

In August 2010, our $100.0 million interest rate swap expired. We originally entered into the interest rate swap in August 2007 for two years at a fixed rate of 4.99%. In December 2007, we amended the life of the swap to three years and reduced the fixed rate to 4.75%. As of December 31, 2012, we do not have any outstanding interest rate swaps.

 

We did not initially designate our interest rate swap as a hedge and, as such, we did not account for it under hedge accounting. During the fourth quarter of 2008, we prospectively designated the interest rate swap as a cash flow hedge of our interest rate risk associated with our credit facility using the long-haul method of effectiveness testing. Concurrent with the refinancing of our credit facility on May 10, 2010, we dedesignated the cash flow hedge associated with our remaining 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 are recognized as "Unrealized gain on change in fair value of interest rate swaps" as a component of "Other (expense) income" in our consolidated statements of operations and amounted to $1.2 million during the year ended December 31, 2010.

 

Any changes in fair value that were determined to be effective while designated as a hedge were recorded as a component of "Accumulated other comprehensive gain" in our consolidated balance sheets and amounted to a gain of $1.0 million, net of taxes, for 2010. As of December 31, 2010, our swaps had all expired, and no related balance is carried on our consolidated balance sheet.