Quarterly report pursuant to Section 13 or 15(d)

Debt

v2.4.0.8
Debt
9 Months Ended
Sep. 30, 2013
Debt Disclosure [Abstract]  
Debt
Debt
 
Debt consists of the following:
 
September 30, 2013
 
December 31, 2012
Senior notes, at par
$
425,000

 
$
425,000

Unamortized premium on senior notes
6,495

 
7,823

Interest rate swap fair value
10,596

 
16,304

Senior notes
442,091

 
449,127

Revolving credit agreement

 

Mortgage notes payable
73,447

 
84,081

Capital leases and other
5,439

 
5,646

Total debt
520,977

 
538,854

Less current portion
(3,046
)
 
(3,373
)
 Long-term debt
$
517,931

 
$
535,481



Senior Notes

In May 2011, the Company issued $250,000 non-callable 5.75% Senior Notes due June 1, 2017 (the $250,000 Notes) at a discount to yield 6%. In connection with the May 2011 issuance, the Company entered into an interest rate swap for a notional amount of $250,000. Gains and losses due to changes in the fair value of the interest rate swap completely offset changes in the fair value of the hedged portion of the underlying debt and are recorded as an adjustment to the $250,000 Notes. At September 30, 2013, the fair value of the interest rate swap increased the fair value of the notes by $10,596 and the variable interest rate of the swap was 3.76%.

In November 2012, the Company issued an additional $175,000 non-callable 5.75% Senior Notes due June 1, 2017 ($175,000 Add-on Notes) at a premium to yield 4.29%. The indenture governing the $250,000 Notes and the $175,000 Add-on Notes contains non-financial and financial covenants, including requirements of a minimum fixed charge coverage ratio. Interest is paid semi-annually in June and December. At September 30, 2013, the total net unamortized debt premium on the $250,000 Notes and $175,000 Add-on Notes was $6,495.  

Revolving Credit Agreement

In May 2013, the Company entered into a new unsecured $500,000 revolving credit facility and terminated its previous $350,000 revolving credit facility. Borrowings under the agreement bear interest based upon LIBOR rates, the Federal Funds Rate or the Prime Rate. The agreement has a maturity date of June 1, 2018, provided it will mature 90 days prior to the maturity date of the Company's 5.75% Senior Notes due 2017 if such notes are not refinanced (or extended) or certain financial conditions are not met, including carrying $100,000 of unrestricted cash on deposit. As of September 30, 2013, the Company had no borrowings outstanding under the agreement.

The agreement contains non-financial and financial covenants, including requirements of minimum fixed charge coverage ratios, maximum debt-to-EBITDA ratios and minimum tangible net worth. The Company is required not to exceed a maximum debt-to-EBITDA ratio of 3.25 as of September 30, 2013 and 3.0 as of December 31, 2013 and thereafter. As of September 30, 2013, the Company's availability under the new revolving credit agreement would have been limited to approximately $400,000 as a result of the debt-to-EBITDA ratio.

Mortgage Notes Payable

The Company had a mortgage note of $8,700 at December 31, 2012 collateralized by an office building and parking garage. In June 2013, the Company paid the balance of this mortgage note.

Letters of Credit

The Company had outstanding letters of credit of $28,682 as of September 30, 2013, which were not part of the revolving credit facility.  The letters of credit bore interest at 0.52% as of September 30, 2013.