Sally Beauty Supply 2013 Annual Report Download - page 128

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Sally Beauty Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
Fiscal Years ended September 30, 2013, 2012 and 2011
liabilities (long-term portion) in our consolidated balance sheets. The Company carries insurance coverage
in such amounts in excess of its self-insured retention which management believes to be reasonable.
Liabilities for loss contingencies, arising from claims, assessments, litigation, fines, penalties and other
sources are recorded when it is probable that a liability has been incurred and the amount of the
assessment can be reasonably estimated. The Company has no significant liabilities for loss contingencies
at September 30, 2013 and 2012, except as discussed in the second preceding paragraph.
13. Short-term Borrowings and Long-Term Debt
Details of long-term debt are as follows (in thousands):
As of September 30,
2013 2012 Interest Rates
ABL facility(a) ................. $ 76,000 $ — (i) Prime plus (0.50% to 0.75%) or;
(ii) LIBOR(a) plus (1.50% to 1.75%)
Senior notes due Nov. 2019 ....... 750,000 750,000 6.875%
Senior notes due Jun. 2022(b) ...... 858,381 859,308 5.750%(b)
Other, due 2014-2015(c) .......... 1,310 2,407 4.93% to 5.79%
Total ...................... $1,685,691 $1,611,715
Capital leases and other .......... 5,012 5,515
Less: current portion ............ 78,018 1,908
Total long-term debt ........... $1,612,685 $1,615,322
(a) At September 30, 2013, borrowings outstanding under the ABL facility bear interest at the weighted
average rate of 2.0%. When used in this Annual Report, LIBOR means the London Interbank
Offered Rate.
(b) Includes unamortized premium of $8.4 million and $9.3 million as of September 30, 2013 and 2012,
respectively, related to notes issued in September 2012 with an aggregate principal amount of
$150.0 million. The 5.75% interest rate relates to notes in the aggregate principal amount of
$850.0 million.
(c) Represents pre-acquisition debt of Pro-Duo NV and Sinelco Group BVBA (‘‘Sinelco’’).
In November 2006, the Company, through its subsidiaries (Sally Investment Holdings LLC and Sally
Holdings LLC, which we refer to as ‘‘Sally Investment’’ and ‘‘Sally Holdings,’’ respectively) incurred
$1,850.0 million of indebtedness in connection with the Company’s separation from its former parent,
Alberto-Culver. Please see Note 1 for more information about the Company’s separation from Alberto-
Culver.
In the fiscal year ended September 30, 2011, Sally Holdings entered into a new $400 million, five-year
asset-based senior secured loan facility (the ‘‘ABL facility’’) and terminated its prior $400 million ABL
credit facility. The availability of funds under the ABL facility, as amended on June 8, 2012, is subject to a
customary borrowing base comprised of: (i) a specified percentage of our eligible credit card and trade
accounts receivable (as defined therein) and (ii) a specified percentage of our eligible inventory (as defined
therein), and reduced by (iii) certain customary reserves and adjustments and by certain outstanding letters
of credit. The ABL facility includes a $25.0 million Canadian sub-facility for our Canadian operations.
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