Tecumseh Products 2012 Annual Report Download - page 52

51
defined by the credit agreement, were to fall below a specified level. We are in compliance with all covenants and terms of the
agreement at December 31, 2012.
At December 31, 2012, our borrowings under the PNC facility totaled $10.0 million, and we have an additional $2.1 million of
borrowing capacity under the borrowing base formula after giving effect to our fixed charge coverage ratio covenant and $3.4
million in outstanding letters of credit. A quarterly covenant is based on our average undrawn borrowing availability and was
such that the covenant did not apply. We paid $0.3 million in fees associated with the agreement in 2011, which were
capitalized and will be amortized over the term of the agreement. We must also pay a facility fee of 0.375% a year on the
unused portion of the facility. In the U.S., we have $0.2 million outstanding in short term borrowings related to financing some
of our insurance premiums, which will be repaid over the next 4 months.
We have various borrowing arrangements at our foreign subsidiaries to support working capital needs and government
sponsored borrowings which provide advantageous lending rates.
Our European business has an overdraft line with an available balance at December 31, 2012 of $0.3 million. None of the
available balance was utilized at December 31, 2012.
In Brazil, as of December 31, 2012, we have uncommitted, discretionary line of credit facilities with several local private
Brazilian banks (some of which are sponsored by the Brazilian government) for an aggregate maximum of $41.4 million,
subject to a borrowing base formula computed on a monthly basis. These credit facilities are secured by a portion of our
accounts receivable and inventory balances and expire at various times from April 15, 2013 through January 15, 2020.
Historically we have been able to enter into replacement facilities when these facilities expire, but such replacements are at the
discretion of the banks. Lenders determine, at their discretion, whether to make new advances with respect to each draw on
such facilities. There are no restrictive covenants on these credit facilities. Our borrowings under the revolving credit facilities
in Brazil, at December 31, 2012, totaled $35.4 million, with an additional $6.0 million available for borrowing, based on our
accounts receivable and inventory at that date.
In India, we have an aggregate maximum availability of $14.2 million in line of credit facilities which are secured by land,
buildings and equipment, inventories and receivables and are subject to a borrowing base formula computed on a monthly
basis. The arrangements expire at various times from April 2013 through July 2013. Historically, we have been able to renew
these facilities when they expire; however, such renewal is at the discretion of the banks. Our borrowings under these facilities
totaled $13.8 million, and based on our borrowing base as of December 31, 2012, we had $0.4 million available for borrowing
under these facilities. There are no restrictive covenants on these credit facilities, except that consent must be received from the
bank in order to dispose of certain assets located in India.
Our consolidated borrowings totaled $61.4 million at December 31, 2012 and $59.9 million at December 31, 2011. Our
weighted average interest rate for these borrowings was 8.8% for the twelve months ended December 31, 2012 and 7.9% for
the twelve months ended December 31, 2011.
Scheduled maturities of debt and capital lease obligations for each of the five years subsequent to December 31, 2012 are as
follows:
(in millions)
2013.............................................................................................................................................................. $ 55.6
2014.............................................................................................................................................................. 2.5
2015.............................................................................................................................................................. 2.4
2016.............................................................................................................................................................. 0.4
Thereafter ..................................................................................................................................................... 0.5
Total.............................................................................................................................................................. $ 61.4
NOTE 9. Stockholders’ Equity
The shares of Class A common stock and Class B common stock are substantially identical except as to voting rights. Class A
common stock has no voting rights except the right to i) vote on any amendments that could adversely affect the Class A
Protection Provision in the articles of incorporation and ii) vote in other limited circumstances, primarily involving mergers and
acquisitions, as required by law.
We have no current expectation to resume payment of dividends.
On April 9, 2007, we issued a warrant to a lender to purchase 1,390,944 shares of our Class A Common Stock, at $6.05 per
share, which is equivalent to 7% of our fully diluted common stock (including both Class A and Class B shares). This warrant
expired on April 9, 2012 without the purchase or issuance of additional shares.