Debt | 12 Months Ended |
Dec. 31, 2013 |
Debt [Abstract] | ' |
Debt | ' |
10. DEBT |
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The principal balances of the components of long-term debt are as follows (in thousands): |
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| December 31, |
| 2013 | | 2012 |
Green Plains Bluffton: | | | | | |
$70.0 million term loan | $ | 26,621 | | $ | 41,018 |
$20.0 million revolving term loan | | 15,000 | | | 20,000 |
$22.0 million revenue bond | | 15,780 | | | 17,510 |
Green Plains Central City: | | | | | |
$55.0 million term loan | | 33,100 | | | 38,635 |
$30.5 million revolving term loan | | 17,739 | | | 28,639 |
$11.0 million revolving line of credit | | - | | | 10,600 |
Equipment financing loan | | 36 | | | 105 |
Green Plains Fairmont and Green Plains Wood River: | | | | | |
$50.0 million term loan | | 50,000 | | | - |
Tax increment financing bond | | 3,626 | | | - |
Capital leases on grain facilities | | 9,994 | | | - |
Capital lease - equipment | | 5,489 | | | - |
Green Plains Holdings II: | | | | | |
$26.4 million term loan | | 15,914 | | | 21,914 |
$51.1 million revolving term loan | | 31,960 | | | 45,320 |
Green Plains Obion: | | | | | |
$60.0 million term loan | | 3,879 | | | 13,479 |
$37.4 million revolving term loan | | 28,400 | | | 37,400 |
Equipment financing loan | | 126 | | | 334 |
Economic development grant | | 1,245 | | | 1,335 |
Green Plains Ord: | | | | | |
$25.0 million term loan | | 15,143 | | | 17,675 |
$13.0 million revolving term loan | | 2,151 | | | 12,151 |
$5.0 million revolving line of credit | | - | | | 4,749 |
Green Plains Otter Tail: | | | | | |
$30.3 million term loan | | 17,960 | | | 22,791 |
$4.7 million revolver | | - | | | 4,675 |
$19.2 million note payable | | 19,151 | | | 19,014 |
Capital lease - equipment | | - | | | 53 |
Green Plains Shenandoah: | | | | | |
$17.0 million revolving term loan | | 9,000 | | | 17,000 |
Green Plains Superior: | | | | | |
$40.0 million term loan | | 9,750 | | | 15,250 |
$10.0 million revolving term loan | | 8,000 | | | 10,000 |
Equipment financing loan | | 18 | | | 89 |
Corporate: | | | | | |
$90.0 million convertible notes | | 90,000 | | | 90,000 |
$120.0 million convertible notes | | 96,653 | | | - |
Notes payable | | - | | | 1,625 |
Capital lease | | 188 | | | 403 |
Other | | 10,000 | | | 211 |
Total long-term debt | | 536,923 | | | 491,975 |
Less: current portion of long-term debt | | -56,177 | | | -129,426 |
Long-term debt | $ | 480,746 | | $ | 362,549 |
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Scheduled long-term debt repayments, excluding the effects of any debt discounts, are as follows (in thousands): |
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Year Ending December 31, | | Amount | | |
2014 | | $ | 56,177 | | |
2015 | | | 204,093 | | |
2016 | | | 80,160 | | |
2017 | | | 33,980 | | |
2018 | | | 159,941 | | |
Thereafter | | | 25,918 | | |
Total | | $ | 560,269 | | |
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Short-term notes payable and other borrowings at December 31, 2013 included working capital revolvers at Green Plains Grain and Green Plains Trade with outstanding balances of $95.0 million and $76.5 million, respectively, and a short-term loan at Green Plains Fairmont and Green Plains Wood River of $26.8 million. Short-term notes payable and other borrowings at December 31, 2012 included working capital revolvers at Green Plains Grain and Green Plains Trade with outstanding balances of $105.0 million and $39.1 million, respectively, and a $27.2 million short-term note payable issued in conjunction with a repurchase of common stock in March 2012. |
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Loan Terminology |
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Related to loan covenant discussions below, the following definitions generally apply to the Company’s loans (all calculated in accordance with GAAP consistently applied): |
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| · | | Working capital – current assets less current liabilities. | | |
| · | | Net worth – total assets less total liabilities plus subordinated debt. | | |
| · | | Tangible Net worth – total assets less intangible assets less total liabilities plus subordinated debt. | | |
| · | | Tangible owner’s equity ratio – tangible net worth divided by total assets. | | |
| · | | Debt service coverage ratio* – (1) net income (after taxes), plus depreciation and amortization, divided by (2) all current portions of regularly scheduled long-term debt for the prior period (previous year end). | | |
| · | | Fixed charge coverage ratio* – | | |
| · (1) adjusted EBITDA divided by (2) fixed charges, which are generally the sum of interest expense, scheduled principal payments, distributions, and maintenance capital, within the ethanol production segment. | | | | |
| · (1) EBITDA, less capital expenditures and interest expense of working capital financings divided by (2) scheduled principal payments and interest expense on long-term indebtedness, within the agribusiness segment. | | | | |
| · (1) EBITDA less capital expenditures less distributions less cash taxes, divided by (2) all debt payments for the previous four quarters, on a trailing quarter basis, within the marketing and distribution segment. | | | | |
| · | | Leverage ratio – total liabilities divided by tangible net worth. | | |
*Certain credit agreements allow for the inclusion of equity contributions from the parent company in the calculations of the debt service and fixed charge coverage ratios. |
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Ethanol Production Segment |
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Loan Repayment Terms |
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| · | | Term Loans – | | |
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| o | | Scheduled principal payments are as follows: | | |
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• | Green Plains Bluffton | $0.3 million per month | | | |
• | Green Plains Central City | $0.5 million per month | | | |
• | Green Plains Fairmont and | | | | |
| Green Plains Wood River | $2.5 million per quarter | | | |
• | Green Plains Holdings II | $1.5 million per quarter | | | |
• | Green Plains Obion | $2.4 million per quarter | | | |
• | Green Plains Ord | $0.2 million per month | | | |
• | Green Plains Otter Tail | $0.4 million per month | | | |
• | Green Plains Superior | $1.4 million per quarter | | | |
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| o | | Final maturity dates (at the latest) are as follows: | | |
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• | Green Plains Bluffton | 31-Jan-15 | | | |
• | Green Plains Central City | 1-Jul-16 | | | |
• | Green Plains Fairmont and | | | | |
| Green Plains Wood River | 27-Nov-15 | | | |
• | Green Plains Holdings II | 1-Jul-16 | | | |
• | Green Plains Obion | 20-May-14 | | | |
• | Green Plains Ord | 1-Jul-16 | | | |
• | Green Plains Otter Tail | 1-Sep-18 | | | |
• | Green Plains Superior | 20-Jul-15 | | | |
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| o | | Each term loan, except for the Green Plains Fairmont and Green Plains Wood River and Green Plains Otter Tail term loans, has a provision that requires the respective subsidiary to make annual special payments equal to a percentage ranging from 65% to 75% of the available free cash flow from the related entity’s operations (as defined in the respective loan agreements), subject to certain limitations and provided that if such payment would result in a covenant default under the respective loan agreements, the amount of the payment shall be reduced to an amount which would not result in a covenant default. | | |
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| o | | As of December 31, 2013, free cash flow payments are discontinued when the aggregate of such future payments meets the following amounts: | | |
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• | Green Plains Bluffton | $16.0 million | | | |
• | Green Plains Central City and | | | | |
| Green Plains Ord combined | $16.0 million | | | |
• | Green Plains Holdings II | $18.0 million | | | |
• | Green Plains Obion | $10.1 million | | | |
• | Green Plains Superior | $10.0 million | | | |
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| o | | Free cash flow payments currently are not to exceed the following amounts in any given year: | | |
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• | Green Plains Bluffton | $4.0 million | | | |
• | Green Plains Central City and | | | | |
| Green Plains Ord combined | $4.0 million | | | |
• | Green Plains Obion | $8.0 million | | | |
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| · | | Revolving Term Loans – The revolving term loans are generally available for advances throughout the life of the commitment, subject, in certain cases, to borrowing base restrictions. Allowable advances under the Green Plains Shenandoah loan agreement are reduced by $0.4 million each quarter. Allowable advances under the Green Plains Superior loan agreement are reduced by $2.5 million each six-month period commencing on the first day of the month beginning six months after repayment of the term loan, but in no event later than January 1, 2016. Allowable advances under the Green Plains Obion loan agreement are reduced by $4.7 million on a semi-annual basis commencing on March 1, 2015. Allowable advances under the Green Plains Holdings II loan agreement are reduced by $2.7 million on a semi-annual basis commencing on April 1, 2012 and are reduced by $5.7 million on a semi-annual basis commencing on October 1, 2016. Interest-only payments are due each month on all revolving term loans until the final maturity date for the Green Plains Bluffton, Green Plains Central City, Green Plains Ord, Green Plains Otter Tail, Green Plains Shenandoah, and Green Plains Superior loan agreements. | | |
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| o | | Final maturity dates (at the latest) are as follows: | | |
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• | Green Plains Bluffton | 31-Jan-15 | | | |
• | Green Plains Central City | 1-Jul-16 | | | |
• | Green Plains Holdings II | 1-Oct-18 | | | |
• | Green Plains Obion | 1-Jun-18 | | | |
• | Green Plains Ord | 1-Jul-16 | | | |
• | Green Plains Shenandoah | 20-Sep-18 | | | |
• | Green Plains Superior | 1-Jul-17 | | | |
Interest and Fees |
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The term loans bear interest at LIBOR plus 3.00% to 4.50% or lender-established prime rates. Some have established a 2% floor on the underlying LIBOR index. A portion of the Green Plains Holdings II term loan is fixed at 8.22%.The revolving term loans bear interest at LIBOR plus 3.00% to 4.50% or lender-established prime rates. Some have established a 2% floor on the underlying LIBOR index. Unused commitment fees, when charged, are 0.25% to 0.75%. |
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Security |
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As security for the loans, the lenders received a first-position lien on all personal property and real estate owned by the respective entity borrowing the funds, including an assignment of all contracts and rights pertinent to construction and on-going operations of the plant. These borrowing entities are also required to maintain certain financial and non-financial covenants during the terms of the loans. In addition, the debt facilities within Green Plains Central City and Green Plains Ord loans are cross-collateralized. |
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Covenants |
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The loan agreements contain affirmative covenants (including financial covenants) and negative covenants including: |
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Maintenance of working capital, including unused portion of revolver, as follows: | | | |
• | Green Plains Bluffton | $5.0 million | | | |
• | Green Plains Central City | $10.0 million excluding current | | | |
| and Green Plains Ord combined | maturities of long-term debt | | | |
• | Green Plains Holdings II | $22.5 million | | | |
• | Green Plains Obion | $9.0 million | | | |
• | Green Plains Otter Tail | $5.0 million | | | |
• | Green Plains Shenandoah | $6.0 million | | | |
• | Green Plains Superior | $3.0 million | | | |
Maintenance of net worth as follows: | | | |
• | Green Plains Holdings II | $80.0 million | | | |
• | Green Plains Obion | $90.0 million | | | |
• | Green Plains Shenandoah | $65.0 million | | | |
• | Green Plains Superior | $23.0 million | | | |
Maintenance of tangible net worth as follows: | | | |
• | Green Plains Bluffton | $82.5 million | | | |
• | Green Plains Otter Tail | $8.0 million | | | |
Maintenance of tangible owner’s equity as follows: | | | |
• | Green Plains Bluffton | at least 50% | | | |
Maintenance of annual fixed charge coverage ratios: | | | |
• | Green Plains Bluffton | 1.15 to 1.0 | | | |
• | Green Plains Central City | | | | |
| and Green Plains Ord combined | 1.15 to 1.0 | | | |
• | Green Plains Otter Tail | 1.15 to 1.0 | | | |
Maintenance of annual debt service coverage ratios: | | | |
• | Green Plains Fairmont and Green Plains Wood River | 2.25 to 1.0 | | | |
• | Green Plains Holdings II | 1.25 to 1.0 | | | |
• | Green Plains Obion | 1.0 to 1.0 | | | |
• | Green Plains Shenandoah | 1.0 to 1.0 | | | |
• | Green Plains Superior | 1.0 to 1.0 | | | |
Maintenance of annual leverage ratio: | | | |
• | Green Plains Fairmont and Green Plains Wood River | 3.25 to 1.0 (decreasing to 2.0 to 1.0 in 2015) | | | |
Annual capital expenditures will be limited as follows: | | | |
• | Green Plains Bluffton | $2.0 million | | | |
• | Green Plains Central City | $2.0 million | | | |
• | Green Plains Fairmont and Green Plains Wood River | $2.0 million | | | |
• | Green Plains Holdings II | $6.0 million | | | |
• | Green Plains Obion | $2.0 million | | | |
• | Green Plains Ord | $2.0 million | | | |
• | Green Plains Otter Tail | $2.0 million | | | |
• | Green Plains Shenandoah | $1.3 million | | | |
• | Green Plains Superior | $0.6 million | | | |
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Allowable dividends or other annual distributions from each respective subsidiary, subject to certain additional restrictions including compliance with all loan covenants, terms and conditions, are as follows: |
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• | Green Plains Bluffton | Up to 35% of net profit before tax, and up to | | | |
| | an additional 15% of net profit before tax, | | | |
| | after free cash flow payment is made | | | |
• | Green Plains Central City | | | | |
| and Green Plains Ord | Up to 35% of net profit before tax, and an | | | |
| | unlimited amount may be distributed after free | | | |
| | cash flow payment is made, provided | | | |
| | maintenance of 70% tangible owners equity | | | |
• | Green Plains Fairmont | | | | |
| and Green Plains Wood River | Up to amounts equal to permitted tax | | | |
| | distributions, as defined in the loan agreement | | | |
• | Green Plains Holdings II | Up to 40% of net profit before tax, and | | | |
| | unlimited after free cash flow payment is made | | | |
• | Green Plains Obion | Up to 40% of net profit before tax, and | | | |
| | unlimited after free cash flow payment is made | | | |
• | Green Plains Otter Tail | Up to 40% of net profit before tax, and an | | | |
| | amount reasonably acceptable to the lender | | | |
| | may be distributed provided maintenance of | | | |
| | 40% tangible owner equity | | | |
• | Green Plains Superior | Up to 40% of net profit before tax, and | | | |
| | unlimited after free cash flow payment is made | | | |
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Bluffton Revenue Bond |
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Green Plains Bluffton issued a $22.0 million Subordinate Solid Waste Disposal Facility Revenue Bond with the City of Bluffton, Indiana. The revenue bond requires: (1) semi-annual principal and interest payments of approximately $1.5 million through March 1, 2019, and (2) a final principal and interest payment of $3.745 million on September 1, 2019. The revenue bond bears interest at 7.50% per annum. At December 31, 2013, Green Plains Bluffton had $3.2 million of cash, presented as restricted cash with the long-term portion in other assets on the consolidated balance sheet, the use of which was restricted for principal and interest payments towards the revenue bond. |
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Otter Tail Promissory Note |
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Green Plains Otter Tail issued $19.2 million in senior notes under New Market Tax Credits financing. The notes bear interest at an annual rate equal to the prime rate (as defined) plus 1.5%, but not less than 4.0%, payable monthly and require monthly principal payments of approximately $0.3 million beginning in September 2014. The notes mature on September 1, 2018 with an expected outstanding balance of $4.7 million upon maturity. |
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Agribusiness Segment |
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Green Plains Grain has a $125.0 million senior secured revolving credit facility with various lenders, as amended on August 27, 2013, to provide the agribusiness segment with working capital funding subject to a borrowing base as defined in the facility. The revolving credit facility matures on August 26, 2016. The revolving credit facility includes total revolving credit commitments of $125.0 million and an accordion feature whereby amounts available under the facility may be increased by up to $75.0 million of new lender commitments upon agent approval. The facility also allows for additional seasonal borrowings up to $50.0 million. The total commitments outstanding under the facility cannot exceed $250.0 million. As security for the revolving credit facility, the lender received a first priority lien on certain cash, inventory, accounts receivable and other assets owned by subsidiaries of the agribusiness segment. Advances are subject to interest charges at a rate per annum equal to the LIBOR rate for the outstanding period plus the applicable margin or a rate per annum equal to the base rate plus the applicable margin. In addition to other customary covenants, this revolving credit facility contains restrictions on distributions with respect to capital stock, with exceptions for distributions of up to 40% of net profit before tax, subject to certain conditions. |
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Marketing and Distribution Segment |
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Green Plains Trade has a senior secured asset-based revolving credit facility pursuant to which the lender will loan up to $130.0 million on eligible collateral. This credit facility was increased from $70.0 million in April 2013. The amount of eligible collateral is determined by a calculated borrowing base value equal to the sum of percentages of eligible receivables and eligible inventories, less certain miscellaneous adjustments. The outstanding balance, if any, is subject to interest charges at the lender’s floating base rate plus the applicable margin or LIBOR plus the applicable margin. The revolving credit facility expires on April 25, 2016. In addition to other customary covenants, this revolving credit facility contains restrictions on distributions with respect to capital stock, with exceptions (i) for distributions with respect to tax obligations, subject to certain conditions, and (ii) whereby distributions may be made in an amount up to 50% of net income if (a) undrawn availability under this facility, on a pro forma basis, is greater than $10.0 million for the preceding 30 days and (b) as of the date of the distribution, the borrower would be in compliance with the fixed charge coverage ratio on a pro forma basis. At December 31, 2013, Green Plains Trade had $26.0 million, presented as restricted cash on the consolidated balance sheets, the use of which was restricted for repayment towards the outstanding loan balance. |
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In June 2013, subsidiaries of the Company executed a New Markets Tax Credits financing transaction. In order to facilitate this financing transaction, the Company was required to issue promissory notes payable in the amount of $10.0 million and a note receivable in the amount of $8.1 million. The promissory notes payable and note receivable bear interest at 1% per annum, payable quarterly. Beginning in March 2020, the promissory notes and note receivable each require quarterly principal and interest payments of approximately $0.2 million; the Company retains the right to call $8.1 million of the promissory notes in 2020. The promissory notes payable and note receivable mature on September 15, 2031 and will be fully amortized upon maturity. In connection with the New Markets Tax Credits financing transaction, income tax credits were generated for the benefit of the lender. The Company has guaranteed the lender the value of these income tax credits over their statutory lives, a period of seven years, in the event that the income tax credits are recaptured or reduced. The value of the income tax credits was anticipated to be $5.0 million at the time of the transaction. The Company believes the likelihood of recapture or reduction of the income tax credits is remote, and therefore has not established a liability in connection with this guarantee. |
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Corporate Activities |
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On September 20, 2013, the Company issued $120.0 million of 3.25% Convertible Senior Notes due 2018, or the 3.25% Notes. The 3.25% Notes represent senior, unsecured obligations of the Company, with interest payable on April 1 and October 1 of each year. Conversion of the 3.25% Notes may only be settled in shares of the Company’s common stock unless shareholder approval is received to allow for flexible settlement consisting of, at the Company's election, cash, shares of the Company's common stock, or a combination of cash and shares of the Company's common stock (and cash in lieu of fractional shares) until the close of business on the scheduled trading day immediately preceding the maturity date. As a result, the 3.25% Notes contain liability and equity components which were bifurcated and accounted for separately. The liability component of the 3.25% Notes, as of the issuance date, was calculated by estimating the fair value of a similar liability issued at an 8.21% effective interest rate, which was determined by considering the estimated rate of return investors would require for the Company’s debt without the conversion feature. The amount of the equity component was calculated by deducting the fair value of the liability component from the principal amount of the 3.25% Notes, resulting in the initial recognition of $24.5 million as debt discount costs recorded in additional paid-in capital. The carrying amount of the 3.25% Notes will be accreted to the principal amount over the remaining term to maturity and the Company will record a corresponding amount of noncash interest expense. Additionally, the Company incurred debt issuance costs of $5.1 million related to the 3.25% Notes and allocated $4.0 million of debt issuance costs to the liability component of the 3.25% Notes. These costs will be amortized to noncash interest expense over the five-year term of the 3.25% Notes. Prior to April 1, 2018, the 3.25% Notes will not be convertible unless certain conditions are satisfied. The initial conversion rate is 47.9627 shares of common stock per $1,000 principal amount of 3.25% Notes, which is equal to an initial conversion price of approximately $20.85 per share. The conversion rate is subject to adjustment upon the occurrence of certain events, including the payment of a quarterly cash dividend that exceeds $0.04 per share. In addition, the Company may be obligated to increase the conversion rate for any conversion that occurs in connection with certain corporate events, including the Company calling the 3.25% Notes for redemption. |
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The Company may redeem for cash all, but not less than all, of the 3.25% Notes at any time on or after October 1, 2016 if the sale price of the Company's common stock equals or exceeds 140% of the applicable conversion price for a specified time period ending on the trading day immediately prior to the date the Company delivers notice of the redemption. The redemption price will equal 100% of the principal amount of the 3.25% Notes, plus any accrued and unpaid interest to, but excluding, the redemption date. In addition, upon the occurrence of a fundamental change, such as a change in control, holders of the 3.25% Notes will have the right, at their option, to require the Company to repurchase their 3.25% Notes in cash at a price equal to 100% of the principal amount of the 3.25% Notes to be repurchased, plus accrued and unpaid interest. Default with respect to any loan in excess of $10.0 million constitutes an event of default under the 3.25% Notes, which could result in the 3.25% Notes being declared due and payable. |
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In November 2010, the Company issued $90.0 million of 5.75% Convertible Senior Notes due 2015, or the 5.75% Notes. The 5.75% Notes represent senior, unsecured obligations of the Company, with interest payable on May 1 and November 1 of each year. The 5.75% Notes may be converted into shares of the Company’s common stock and cash in lieu of fractional shares of the common stock based on a conversion rate equal to 70.1208 shares of the common stock per $1,000 principal amount of 5.75% Notes at December 31, 2013, which is equal to a conversion price of approximately $14.26 per share. The conversion rate is subject to adjustment upon the occurrence of specified events, including the payment of a cash dividend. The conversion rate was adjusted to reflect the payment of cash dividends during 2013. The Company may redeem for cash all, but not less than all, of the 5.75% Notes at any time on or after November 1, 2013, if the last reported sale price of the Company’s common stock equals or exceeds 140% of the applicable conversion price for a specified time period, at a redemption price equal to 100% of the principal amount of the 5.75% Notes, plus accrued and unpaid interest. Default with respect to any loan in excess of $10.0 million constitutes an event of default under the 5.75% Notes, which could result in the 5.75% Notes being declared due and payable. |
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Covenant Compliance |
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The Company, including all of its subsidiaries, was in compliance with its debt covenants as of December 31, 2013. |
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Capitalized Interest |
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The Company had no capitalized interest during the year ended December 31, 2013, $285 thousand in capitalized interest during the year ended December 31, 2012 and no capitalized interest during the year ended December 31, 2011. |
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Restricted Net Assets |
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At December 31, 2013, there were approximately $636.9 million of net assets at the Company’s subsidiaries that were not available to be transferred to the parent company in the form of dividends, loans, or advances due to restrictions contained in the credit facilities of these subsidiaries. |
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