Debt And Other Long-Term Liabilities

9 Months Ended

Sep. 30, 2011

Debt And Other Long-Term Liabilities [Abstract]

Debt And Other Long-Term Liabilities

NOTE 12: DEBT AND OTHER LONG-TERM LIABILITIES

Dollars in thousands		September 30,     2011				December 31, 2010
Revolving line of credit	$		-		$		150,000
Term loan			172,813				-
Convertible debt			178,004				173,146
redbox rollout agreement			5,220				10,791
Asset retirement obligation			8,533				7,305
Other long-term liabilities			10,849				6,703
			375,419				347,945
Less:
Current portion of term loan			(9,844	)			-
Current portion of callable convertible debt			-				(173,146	)
Current portion of redbox rollout agreement			(4,641	)			(7,523	)
Total long-term debt and other long-term liabilities	$		360,934		$		167,276

Credit Facility

On July 15, 2011, we entered into a New Credit Facility, providing for a senior secured revolving credit facility and a senior secured term loan facility, which replaced our prior credit facility, which consisted of a revolving line of credit. The New Credit Facility provides for a five-year, $175.0 million term loan and a $450.0 million revolving line of credit. Subject to additional commitments from lenders, we have the option to increase the aggregate facility size by $250.0 million, which can be comprised of additional term loans and a revolving line of credit. On July 15, 2011, we borrowed $175.0 million under the term loan facility, a portion of which was utilized to pay down the revolving line of credit balance under the prior credit facility of $120.0 million. Fees paid for the New Credit Facility of $4.2 million were included within other long-term assets on our Consolidated Balance Sheets and are being amortized over the 5-year life of the New Credit Facility. In addition, $0.9 million of unamortized deferred finance fees related to the prior credit facility were carried over to the new revolving credit facility arrangement. Deferred financing costs are amortized on a straight-line basis, which approximates the effective interest method.

The New Credit Facility matures on July 15, 2016, at which time all outstanding borrowings must be repaid. The term loan is subject to mandatory debt repayments of the outstanding borrowings equal to 5% in the first year, 7.5% in the second year, 10% in the third year, and 12.5% in the fourth and fifth year, with the balance due at maturity. During the third quarter of 2011, we made principal payments of $2.2 million on the term loan. Our obligations under the New Credit Facility are secured by a first priority security interest in substantially all of our assets and the assets of our domestic subsidiaries, as well as a pledge of a substantial portion of our subsidiaries' capital stock.

Subject to applicable conditions, we may elect interest rates on our revolving borrowings calculated by reference to (i) the British Bankers Association LIBOR rate ("LIBOR Rate") fixed for given interest periods or (ii) Bank of America's prime rate (or, if greater, the average rate on overnight federal funds plus one half of one percent or the LIBOR Rate plus one percent) (the "Base Rate"), plus the margin determined by our consolidated net leverage ratio. For borrowings made under the LIBOR Rate, the margin ranges from 125 to 200 basis points, while for borrowing made under the Base Rate, the margin ranges from 25 to 100 basis points. However, for the period through the delivery of our certificate of compliance for the quarter ending December 31, 2011, the applicable LIBOR Rate margin will be fixed at 150 basis points and the applicable Base Rate margin will be fixed at 50 basis points. The interest rate on amounts outstanding under the term loan at September 30, 2011 was 1.73%.

The New Credit Facility contains standard negative covenants and restrictions on actions including, without limitation, restrictions on indebtedness, liens, fundamental changes or dispositions of our assets, payments of dividends, capital expenditures, investments, and mergers, dispositions and acquisitions, among other restrictions. In addition, the New Credit Facility requires that we meet certain financial covenants, ratios and tests, including maintaining a maximum consolidated net leverage ratio and a minimum interest coverage ratio, as defined in the New Credit Facility.As of September 30, 2011, we were in compliance with the covenants of the New Credit Facility.

Convertible Debt (the "Notes")

The aggregate outstanding principal of the Notes is $200.0 million. The Notes bear interest at a fixed rate of 4% per annum, payable semi-annually in arrears on each March 1 and September 1, beginning March 1, 2010, and mature on September 1, 2014. The effective interest rate at issuance was 8.5%. As of September 30, 2011, we are in compliance with all covenants.

The Notes become convertible (the "Conversion Event") when the closing price of our common stock exceeds 130% of the Notes' conversion price for more than 20 trading days during the 30 consecutive trading days prior to each quarter-end date. If the Notes become convertible and should the Note holders elect to convert, we will be required to pay them up to the full face value of the Notes in cash as well as deliver shares of our common stock for any excess conversion value. The number of potentially issued shares increases as the market price of our common stock increases. As of September 30, 2011, the Conversion Event was not met and the Notes remained classified as a long-term liability on our Consolidated Balance Sheets. In addition, since the Notes were not convertible at September 30, 2011, the $26.9 million debt conversion feature that was classified as temporary equity at December 31, 2010 was reclassified to common stock as of September 30, 2011.

The following interest expense was recorded related to the Notes (in thousands):

		Three Months Ended     September 30,					Nine Months  Ended September 30,
		2011			2010		2011			2010
Contractual interest expense	$		2,000	$		2,000		6,000	$		6,000
Amortization of debt discount			1,648			1,519		4,857			4,477
Total interest expense related to the Notes	$		3,648	$		3,519		10,857	$		10,477

The remaining unamortized debt discount is expected to be recognized as non-cash interest expense as follows (in thousands):

Year		Non-cash Interest Expense
Remainder of 2011	$	1,694
2012		7,108
2013		7,712
2014		5,483
Total	$	21,997