Leverage Covenant Calculation. Leverage Covenant Calculation Summary December 31, 2009 (millions) Leverage Covenant Calculation Detail Covenant Debt LTM Adjusted EBITDA Comments
December 31, 2009
Leverage Covenant Calculation Detail
LTM Adjusted EBITDA
(a) Adjustment to convert debt denominated in euros to weighted average FX rate for the 12 month period ended 12/31/09. (See “Key Points”)
(b) Per the covenant agreement, only $100.0 million of cash can be used to offset debt in the leverage calculation. Note the Company had $300.5 million of cash as of 12/31/09. The Company can utilize the $200.5 of cash not included in the covenant calculation to prepay debt at any time which will lower this leverage ratio.
(c) Represents projected synergy benefits (e.g. headcount reduction savings) not already realized for acquisitions as permitted by the covenant in the debt agreement.
12/31/09 Senior Secured Debt
(a) Total debt using 12/31/09 balance sheet FX rate.
(b) Total debt using LTM 12/31/09 weighted average FX rate.
Assume Adjusted EBITDA is equal to LTM 12/31/09 Adjusted EBITDA of $540.3 at three different FX rates:
PER THE COVENANT AGREEMENT, ONLY $100.0 MILLION OF CASH CAN BE USED TO OFFSET DEBT IN THE LEVERAGE CALCULATION. NOTE THE COMPANY HAD $300.5 MILLION OF CASH AS OF 12/31/09. THE COMPANY CAN UTILIZE THE $200.5 OF CASH NOT INCLUDED IN THE COVENANT CALCULATION TO PREPAY DEBT AT ANY TIME WHICH WILL LOWER THIS LEVERAGE RATIO. THROUGH THE FIRST QUARTER OF 2010 THE MAXIMUM LEVERAGE RATIO ALLOWED IS 4.40X. FROM 4/1/10 THROUGH 9/30/10, THE MAXIMUM LEVERAGE RATIO DECREASES TO 4.25X AND DECREASES TO 4.00X FROM 10/1/10 THROUGH THE REMAINDER OF THE AGREEMENT TO 2014.