Harman Kardon 2007 Annual Report Download - page 65

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52
Note 6 - Long-Term Debt and Current Portion of Long Term-Debt
Long-term debt is comprised of the following:
June 30,
($000s omitted)
2007
2006
Senior notes, unsecured, due February 15, 2007
interest due
semiannually at 7.125% $
---
13,168
Senior notes, unsecured, due July 1, 2007
interest due
semiannually at 7.32% 16,486
16,486
Revolving credit facility 55,000
159,900
Obligations under capital leases (note 7) 2,251
2,555
Other unsubordinated variable rate loans due
through 2016,
bearing
interest at an average effective rate of 5.00% at June 30, 2007 953
3,694
Total 74,690
195,803
Less current installments
(17,029)
(16,337)
Long-term debt $
57,661
179,466
Our long-term debt at June 30, 2007, consisted of $55.0 million in borrowings under the revolving credit
facility and $2.7 million of other obligations. Our current portion of long-term debt consisted of $16.5
million principal amount of 7.32 percent senior notes due July 1, 2007 and $0.5 million of other
obligations.
During the fiscal year ended June 30, 2007, we purchased and retired $13.2 million of our 7.125 percent
senior notes due February 2007 at an average premium of 0.718 percent, retiring the outstanding principal
amount of $13.2 million and resulting in an other non-operating expense of $0.1 million.
We are a party to a $300 million multi-currency revolving credit facility with a group of banks. This
facility expires in June 2010. The interest rate on the revolving rate facility is based upon LIBOR plus 37
to 90 basis points and we pay a commitment fee of 8 to 22.5 basis points. The interest rate spread and
commitment fee are determined based upon our interest coverage ratio and senior unsecured debt rating.
At June 30, 2007, we had $55.0 million in borrowings under the revolving credit facility and outstanding
letters of credit of $5.6 million.
Our long-term debt agreements contain financial and other covenants that, among other things, limit our
ability to incur additional indebtedness, restrict subsidiary dividends and distributions, limit our ability to
encumber certain assets and restrict our ability to issue capital stock of our subsidiaries. Our long-term
debt agreements permit us to pay dividends or repurchase our capital stock without any dollar limitation
provided that we would be in compliance with the financial covenants in our revolving credit facility after
giving effect to such dividend or repurchase. At June 30, 2007 and 2006, we were in compliance with the
terms of our long-term debt agreements.
Weighted average borrowings were $170.2 million, $342.0 million and $340.3 million for fiscal years
ended June 30, 2007, 2006 and 2005, respectively. The weighted average interest rate was 5.6 percent,
7.4 percent and 5.3 percent in fiscal 2007, 2006 and 2005, respectively. Our average interest rates
fluctuate primarily due to changes in the U.S. Dollar denominated short-term LIBOR base rates. The
majority of our interest expense is linked to the U.S. Dollar short-term LIBOR rates.