Long-Term Debt and Notes Payable
|12 Months Ended|
Dec. 31, 2017
|Debt Disclosure [Abstract]|
|Long-Term Debt and Notes Payable||
LONG-TERM DEBT AND NOTES PAYABLE
Long-term debt consists of the following:
Principal maturities of long-term debt are approximately:
The Company's Fourth Amended and Restated Credit Agreement (the “Original Facility”) provided for a $350 million revolving credit line with the option to increase the line by up to $150 million. The maturity date of the loans under the Original Facility was September 26, 2019.
On January 13, 2016, the Company amended the Original Facility to add a new lender and extend the maturity date of the credit facility from September 26, 2019 to January 13, 2021.
The maximum permitted leverage ratio of funded debt to Adjusted EBITDA (as defined in the Agreement) was 3.5 to 1, increasing to 4.0 to 1 for up to two fiscal quarters following the closing of an acquisition permitted under the Agreement. The Company paid interest on the unpaid principal amount of the facility at a rate equal to one-, three- or six-month LIBOR plus between 1.375% and 2.25% based upon the Company’s leverage ratio. The Company paid a commitment fee to the Lenders in an amount equal to between 0.175% and 0.35% on the undrawn portion of the credit facility, based upon the Company’s leverage ratio. The Company was required to maintain a minimum interest coverage ratio (Adjusted EBITDA to interest expense) of 3.0 to 1 for the term of the Agreement.
On February 16, 2018, the Company modified and extended the Original Facility by entering into the Fifth Amended and Restated Credit Agreement (the "Agreement"), which provides for a $500 million revolving credit line with the option to increase the line by up to $150 million. A new lender was added to the facility as well. The outstanding balances in the original Facility were rolled into the Agreement on the date of closing. The maturity date of the loans under the Agreement is February 16, 2023. The credit facility allocates up to $20 million of the $500 million revolving credit line for the issuance of letters of credit, including certain existing letters of credit. At December 31, 2017, outstanding letters of credit totaled $1.1 million. At December 31, 2017, there was $262.0 million outstanding on the revolving credit facility and there remains $236.9 million available, net of outstanding letters of credit.
Covenants in the Agreement have been modified to where the maximum permitted leverage ratio is 3.75 to 1 beginning with quarters ended on or after December 31, 2017. However, the Company may elect to exercise its right to increase this ratio to 4.50 to 1 or up to four fiscal quarters following the closing of an acquisition permitted under the Agreement, subject to limitations. The Company will pay interest on the unpaid principal amount of the facility at a rate equal to one-, three- or six-month LIBOR plus between 1.00% and 1.50% based upon the Company's leverage ratio. The Company will also pay a commitment fee to the Lenders in an amount equal to between 0.10% and 0.20% of the undrawn portion of the credit facility, based upon the Company's leverage ratio. The Company’s leverage ratio was 2.91 to 1 at December 31, 2017. The Company is in compliance with all financial and other covenants at December 31, 2017. The requirement to maintain a minimum interest coverage ratio has been eliminated.
The Company’s obligations under the Credit Agreement as amended are jointly and severally guaranteed by each domestic subsidiary of the Company other than a non-material subsidiary. The obligations are secured by a first priority lien on substantially all of the Company’s and the guarantors’ assets.
In the event of voluntary or involuntary bankruptcy of the Company or any subsidiary, all unpaid principal and other amounts owing under the Credit Agreement automatically become due and payable. Other events of default, such as failure to make payments as they become due and breach of financial and other covenants, change of control, judgments over a certain amount, and cross default under other agreements give the Agent the option to declare all such amounts immediately due and payable.
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
Reference 1: http://www.xbrl.org/2003/role/presentationRef