Debt

9 Months Ended

Sep. 30, 2011

6. DEBT

As of September 30, 2011 and December 31, 2010, long-term debt consisted of the following (in thousands):


	September 30, 2011		December 31, 2010
	(Unaudited)
U.S. revolving credit facility, which matures December 10, 2015, with available commitments up to $500 million and with an average interest rate of 2.8% for the nine month period ended September 30, 2011	$	—	$	345,600
U.S. term loan, which matures December 10, 2015, of $200 million; 1.25% of aggregate principal repayable per quarter in 2011, 2.5% per quarter thereafter; average interest rate of 2.6% for the nine month period ended September 30, 2011		192,500		200,000
Canadian revolving credit facility, which matures December 10, 2015, with available commitments up to $250 million and with an average interest rate of 3.9% for the nine month period ended September 30, 2011		—		62,538
Canadian term loan, which matures December 10, 2015, of $100 million; 1.25% of aggregate principal repayable per quarter in 2011, 2.5% per quarter thereafter; average interest rate of 3.6% for the nine month period ended September 30, 2011		93,026		100,955
Australian revolving credit facility, which matures October 15, 2013, with available commitments up to A$150 million and with an average interest rate of 7.0% for the nine months ended September 30, 2011		30,206		25,305
6 1/2% senior unsecured notes — due June 2019		600,000		—
23/8% contingent convertible senior subordinated notes, net — due 2025		168,885		163,108
Subordinated unsecured notes payable to sellers of businesses, fixed interest rate of 6%, which mature in 2012		4,000		4,000
Capital lease obligations and other debt		9,381		11,401

Total debt		1,097,998		912,907
Less: Current maturities		197,522		181,175

Total long-term debt and capitalized leases	$	900,476	$	731,732

On June 1, 2011, the Company sold $600 million aggregate principal amount of 6 1/2% senior unsecured notes (6 1/2% Notes) due 2019 through a private placement to qualified institutional buyers.

The 6 1/2% Notes are senior unsecured obligations of the Company, are guaranteed by our U.S. subsidiaries (the Guarantors), bear interest at a rate of 6 1/2% per annum and mature on June 1, 2019. At any time prior to June 1, 2014, the Company may redeem up to 35% of the 6 1/2% Notes at a redemption price of 106.500% of the principal amount, plus accrued and unpaid interest to the redemption date, with the proceeds of certain equity offerings. Prior to June 1, 2014, the Company may redeem some or all of the 6 1/2% Notes for cash at a redemption price equal to 100% of their principal amount plus an applicable make-whole premium and accrued and unpaid interest to the redemption date. On and after June 1, 2014, the Company may redeem some or all of the 6 1/2% Notes at redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest to the redemption date. The optional redemption prices as a percentage of principal amount are as follows:


Twelve Month Period Beginning
June 1,	% of Principal Amount
2014		104.875	%

2015		103.250	%

2016		101.625	%

2017		100.000	%

In connection with the note offering, the Company, the Guarantors of the 6 1/2% Notes and the initial purchasers entered into a registration rights agreement at the closing of the offering. Pursuant to the registration rights agreement, the Company and the Guarantors agreed, subject to certain exceptions, to use commercially reasonable efforts to file with the Commission and cause to become effective a registration statement relating to an offer to exchange the 6 1/2% Notes for an issue of Commission-registered 6 1/2% Notes with substantially identical terms. All of the 6 1/2% Notes were so exchanged in October 2011.

The Company utilized approximately $515 million of the net proceeds of the 6 1/2% Note offering in June 2011 to repay borrowings outstanding under its senior secured credit facilities. The remaining net proceeds of approximately $75 million were utilized for general corporate purposes.

As of September 30, 2011, we classified the $175.0 million principal amount of our 2 3/8% Contingent Convertible Senior Subordinated Notes (2 3/8% Notes), net of unamortized discount, as of current liability based on the first put/call date of July 6, 2012. If certain contingent conversion thresholds based on the Company’s stock price are met and a 2 3/8% Note holder chooses to present their notes for conversion during a future quarter prior to the first put/call date in July 2012, they will receive cash up to $1,000 for each 2 3/8% Note plus Company common stock for any excess valuation over $1,000 using the conversion rate of the 2 3/8% Notes of 31.496 multiplied by the Company’s average common stock price over a ten trading day period following presentation of the 2 3/8% Notes for conversion. As of September 30, 2011, the contingent conversion thresholds were met and, as a result, 2 3/8% Note holders could present their notes for conversion during the quarter following the September 30, 2011 measurement date. During the quarter ended September 30, 2011, a holder converted 10 of our 2 3/8% Notes (principal amount of $10,000) for cash of $10,000 plus 189 shares of our common stock.

The following table presents the carrying amount of our 2 3/8% Notes in our consolidated balance sheets (in thousands):


	September 30,		December 31,
	2011		2010
Carrying amount of the equity component in additional paid-in capital	$	28,434	$	28,449


Principal amount of the liability component	$	174,990	$	175,000
Less: Unamortized discount		6,105		11,892

Net carrying amount of the liability component	$	168,885	$	163,108

Unamortized Discount — 2 3/8% Notes

The effective interest rate of our 2 3/8% Notes is 7.17%. Interest expense on the 2 3/8% Notes, excluding amortization of debt issue costs, was as follows (in thousands):


	Three months ended				Nine months ended
	September 30,				September 30,
	2011		2010		2011		2010
Interest expense	$	3,003	$	2,867	$	8,904	$	8,505


	September 30, 2011
Remaining period over which discount will be amortized	9 months
Conversion price	$	31.75
Number of shares to be delivered upon conversion (1)		2,074,918
Conversion value in excess of principal amount (in thousands) (1)	$	105,655
Derivative transactions entered into in connection with the convertible notes	None


(1)		Calculation is based on the Company’s September 30, 2011 closing stock price of $50.92.

On July 13, 2011, The MAC entered into a A$150 million revolving loan facility governed by a Facility Agreement (the Facility Agreement) between The MAC and National Australia Bank Limited, which is guaranteed by the Company. The Facility Agreement amended The MAC’s existing A$75 million revolving loan facility on substantially the same terms, including the maturity date of the Facility Agreement of November 30, 2013. As of September 30, 2011, we had $30.2 million outstanding under the Australian facility.

The Company’s financial instruments consist of cash and cash equivalents, investments, receivables, payables, and debt instruments. The Company believes that the carrying values of these instruments, other than our 2 3/8% Notes and our 6 1/2% Notes, on the accompanying consolidated balance sheets approximate their fair values.

The fair values of our 2 3/8% and 6 1/2% Notes are estimated based on quoted prices in active markets (Level 1 fair value measurements). The carrying and fair values of these notes were as follows (in thousands):


				September 30, 2011				December 31, 2010
	Interest			Carrying		Fair		Carrying		Fair
	Rate			Value		Value		Value		Value
6 1/2% Notes
Principal amount due 2019		6 1/2	%	$	600,000	$	599,628	$	—	$	—

2 3/8% Notes
Principal amount due 2025		2 3/8	%	$	174,990	$	296,188	$	175,000	$	354,057
Less: unamortized discount					6,105		—		11,892		—

Net value				$	168,885	$	296,188	$	163,108	$	354,057

As of September 30, 2011, the Company had approximately $118.9 million of cash and cash equivalents and $729.6 million of the Company’s U.S. and Canadian revolving credit and term loan facilities available for future financing needs. The Company also had availability totaling A$119.0 million under its Australian credit facility. As of September 30, 2011, we had $23.7 million of outstanding letters of credit drawn under these credit facilities.

Interest expense on the condensed consolidated statements of income is net of capitalized interest of $1.6 million and $4.0 million, respectively, for the three and nine months ended September 30, 2011 and less than $0.1 and $0.1 million, respectively, for the three and nine months ended September 30, 2010.