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Table of Contents
UNITED ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. LONG-TERM DEBT (Continued)
The refinancing of the Credit Facilities was accounted for in accordance with ASC 470, Debt . A significant portion of the debt under the
2008 Credit Agreement was considered to be extinguished, and the Company recorded a $6.1 million loss on extinguishment of debt in
connection with the refinancing, which was recorded in interest expense for the year ended December 31, 2011.
The changes in the Company's debt balances, net of discounts, for the year ended December 31, 2011 under the Credit Agreement were as
follows (in thousands):
Future minimum principal payments based upon scheduled mandatory debt payments under the Credit Agreement, excluding required
repayments based on excess cash flows, were as follows at December 31, 2011 (in thousands):
At December 31, 2011, the borrowing capacity under the Revolving Credit Facility, which was reduced by $1.3 million in outstanding
letters of credit, was $48.7 million.
Commencing in April 2013 for fiscal year 2012, subject to certain exceptions, FTD Group, Inc. will be required to make annual repayments
of a portion of the Term Loan based on excess cash flow as defined in the Credit Agreement.
Under the terms of the Credit Agreement, FTD Group, Inc. is generally restricted from transferring funds to United Online, Inc., with
certain exceptions including an annual basket of $15 million (subject to adjustment based on excess cash flow calculations) which may be used
to make cash dividends, loans and advances to United Online, Inc., provided certain terms and conditions specified in the Credit Agreement are
satisfied. These restrictions have resulted in the restricted net assets (as defined in Rule 4-08(e)(3) of Regulation S-X) of FTD Group Inc. and its
subsidiaries totaling $262.1 million and $256.4 million at December 31, 2011 and 2010, respectively, which exceeded 25% of the consolidated
net assets of United Online, Inc. and its subsidiaries. FTD Group, Inc. was in compliance with all covenants under the Credit Agreement at
December 31, 2011.
F-27
Balance at
January 1,
2011 Draw Down
of Debt Repayments
of Debt Discounts Accretion
of Discounts
Balance at
December 31,
2011
Credit
Agreement,
Term Loan
$
—
$
265,000
$
(1,325
)
$
(2,780
)
$
229
$
261,124
Credit
Agreement,
Revolving
Credit Facility
—
—
—
—
—
—
Total
$
—
$
265,000
$
(1,325
)
$
(2,780
)
$
229
$
261,124
Year Ending December 31,
Total
Gross Debt
2012
2013
2014
2015
2016
Thereafter
Credit Agreement,
term loan
$
263,675
$
2,650
$
2,650
$
2,650
$
2,650
$
2,650
$
250,425