MoneyGram 2011 Annual Report Download - page 114

Table of Contents
Credit Agreement also has quarterly financial covenants to maintain the following interest coverage and total leverage ratios:
Interest
Coverage
minimum
ratio
Total
Leverage
not to
exceed
Present through September 30, 2012 2.00:1 4.75:1
December 31, 2012 through September 30, 2013 2.15:1 4.625:1
December 31, 2013 through September 30, 2014 2.15:1 4.375:1
December 31, 2014 through September 30, 2015 2.25:1 4.00:1
December 31, 2015 through September 30, 2016 2.25:1 3.75:1
December 31, 2016 through maturity 2.25:1 3.50:1
At December 31, 2011, the Company is in compliance with its financial covenants by a substantial margin.
Deferred Financing Costs —The Company capitalized financing costs in “Other assets” in the Consolidated Balance Sheets and amortized them over the
term of the related debt using the effective interest method. Amortization of the deferred financing costs during 2011, 2010 and 2009 include the write−off
of a pro−rata portion of deferred financing costs in connection with the payments on the Second Lien Notes, the incremental term loan, the term debt and
the Senior Tranche B. Amortization is recorded in “Interest expense” in the Consolidated Statements of Income. Following is a summary of the deferred
financing costs at December 31:
2008 Senior Facility 2011 Credit Agreement
(Amounts in thousands) Senior Tranche B Loan Senior secured credit facility Senior secured incremental term Senior revolving credit facility Second Lien Notes Total Deferred Financing Costs
Balance at January 1, 2009 $ 16,586 $ — $ — $ — $ 30,872 $ 47,458
Amortization of deferred financing costs (3,875) — — — (3,251) (7,126)
Write−off of deferred financing costs (854) — — — — (854)
Balance at January 1, 2010 11,857 — — — 27,621 39,478
Amortization of deferred financing costs (3,330) — — — (3,274) (6,604)
Write−off of deferred financing costs (2,734) — — — — (2,734)
Balance at January 1, 2011 5,793 — — — 24,347 30,140
Capitalized deferred financing costs — 8,732 3,151 4,024 5,000 20,907
Amortization of deferred financing costs (968) (750) (51) (501) (3,583) (5,853)
Write−off of deferred financing costs (4,825) (1,100) (8) — (9,115) (15,048)
Balance at December 31, 2011 $ — $ 6,882 $ 3,092 $ 3,523 $ 16,649 $ 30,146
Debt Extinguishment Losses — The Company recognized total debt extinguishment losses of $37.5 million in 2011. In connection with the refinancing of
our 2008 senior debt facility in May 2011, we recorded $5.2 million of debt extinguishment costs, primarily from the write−off of unamortized deferred
financing costs. In connection with the partial redemption of the Second Lien Notes in November 2011, the Company incurred a prepayment penalty of
$23.2 million and wrote−off $9.1 million of unamortized deferred financing costs.
Interest Paid in Cash — The Company paid $78.5 million, $83.5 million and $94.4 million of interest in 2011, 2010 and 2009, respectively.
Maturities — At December 31, 2011, debt totaling $481.0 million will mature in 2017 and $325.0 million will mature in 2018, while debt principal totaling
$8.6 million will be paid in increments of $0.4 million quarterly through 2017.
Note 10 — Pensions and Other Benefits
Pension Benefits — The Pension Plan is a frozen non−contributory funded defined benefit pension plan under which no new service or compensation
credits are accrued by the plan participants. Cash accumulation accounts continue to be credited with interest credits until participants withdraw their money
from the Pension Plan. It is the Company’s policy to fund the minimum required contribution each year.
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