“Total Funded Debt” is calculated in accordance with the definition contained in our Credit Facility. Total Funded Debt is generally defined as aggregate debt obligations reflected in our balance sheet, less the hedge adjustments resulting from terminated and existing fair value interest rate derivatives or swaps, less certain cash, plus additional outstanding letters of credit not already reflected in debt and certain guarantees.
Our management uses Credit Agreement EBITDA and Total Funded Debt to evaluate compliance with our debt covenants and borrowing capacity available under our Credit Facility. Management believes that investors also use these measures to evaluate our compliance with our debt covenants and available borrowing capacity. Borrowing capacity is dependent upon, in addition to other measures, the “Credit Agreement Debt/EBITDA ratio” or the “Leverage Ratio,” which is defined as Total Funded Debt divided by Credit Agreement EBITDA. As of the June 30, 2012 calculation, our Leverage Ratio was 2.84 times. Our maximum permitted Leverage Ratio under the Credit Facility at June 30, 2012 was 3.75 times. Effective for the September 30, 2012 quarter, the maximum permitted Leverage Ratio under the Credit Facility is 3.5 times.
Set forth below is a reconciliation of Credit Agreement EBITDA for the twelve months ended June 30, 2012, to the most directly comparable GAAP measure, Consolidated Net Income:
|(In Millions)||Twelve Months|
|June 30, 2012|
|Consolidated Net Income||$||253.6|
|Interest Expense, net||113.2|
|Depreciation and Amortization||527.6|
|Additional Permitted Charges||168.5|
|Credit Agreement EBITDA||$||1,204.7|
|Set forth below is a reconciliation of Total Funded Debt to the most directly comparable GAAP measures, Current portion of debt and Long-term debt due after one year:|
|(In Millions, except ratio)||June 30,|
|Current Portion of Debt||$||257.7|
|Long-Term Debt Due After One Year||3,102.6|
|Less: Hedge Adjustments Resulting From Terminated|
|Fair Value Interest Rate Derivatives or Swaps||(0.2||)|
|Total Debt Less Hedge Adjustments||3,360.1|
|Plus: Letters of Credit, Guarantees and Other Adjustments||65.0|
|Total Funded Debt||$||3,425.1|
|Credit Agreement EBITDA for the Twelve Months Ended June 30, 2012||$||1,204.7|
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