Long-Term Debt

6 Months Ended

Jun. 30, 2019

Our long-term debt consists of the following:



		June 30, 2019							December 31, 2018
(in thousands)		Gross		Debt Issuance Costs			Net		Gross		Debt Issuance Costs			Net
Bank debt:
	Term loan facility borrowings due May 2024, weighted-average interest rate of 4.22% as of June 30, 2019	$	1,750,000	$	(16,697	)	$	1,733,303	$	—	$	—		$	—
	Revolving line of credit borrowings due May 2024, weighted-average interest rate of 4.22% as of June 30, 2019	10,000		(7,149		)	2,851		—		—			—
	Term loan facility borrowings due August 2022, weighted-average interest rate of 4.05% as of December 31, 2018, modified May 2019	—		—			—		1,597,500		(13,043		)	1,584,457
	Revolving line of credit borrowings due August 2022, weighted-average interest rate of 4.05% as of December 31, 2018, modified May 2019	—		—			—		178,146		(5,216		)	172,930
Notes:
	7.55% senior debentures due April 2028	14,524		(42		)	14,482		14,645		(44		)	14,601
Other debt:
	Various debt instruments with maturities through March 2024	6,500		—			6,500		7,188		—			7,188
Total long-term debt		1,781,024		(23,888		)	1,757,136		1,797,479		(18,303		)	1,779,176
Less current portion of long-term debt		90,115		—			90,115		26,935		—			26,935
Long-term debt, net of current portion		$	1,690,909	$	(23,888	)	$	1,667,021	$	1,770,544	$	(18,303	)	$	1,752,241

As of June 30, 2019, and December 31, 2018, we have recorded $1.3 million and $0.7 million of accrued interest expense, respectively, on our debt-related instruments within accounts payable and other accrued expenses.

Credit Agreement

In May 2019, we amended and restated our credit agreement (the "Credit Agreement") with Bank of America, N.A., as the administrative agent, and other financial institutions. The Credit Agreement provides for a $1.8 billion five-year term loan A facility (the "Term Facility"), and a $750.0 million five-year revolving credit facility (the "Revolving Facility"). The Term Facility matures, and the Revolving Facility expires, in May 2024. The Revolving Facility includes a $100.0 million multi-currency revolving sub-facility and a $50.0 million letter of credit sub-facility. The Credit Agreement also provides for the ability to increase the Term Facility and Revolving Facility by up to $300.0 million in the aggregate; however, the lenders are not obligated to do so.

The loans under the Credit Agreement bear interest, at the election of the Company, at (i) the Alternate Base Rate (defined as the greater of (a) Bank of America's "prime rate", (b) the Federal Funds effective rate plus 0.50% and (c) the reserve adjusted London interbank offering rate for a one-month Eurocurrency borrowing plus 1.00%) plus the Applicable Rate (as defined in the Credit Agreement) or (ii) the London interbank offering rate for Eurocurrency borrowings, adjusted for statutory reserves ("Adjusted Eurocurrency Rate") plus the Applicable Rate. The initial Applicable Rate for Alternate Base Rate borrowings is 0.75% and for Adjusted Eurocurrency Rate borrowings is 1.75%. After September 2019, the Applicable Rate will vary depending upon the Company's leverage ratio. The minimum Applicable Rate for Alternate Base Rate borrowings will be 0.25% and the maximum will be 1.00%. The minimum Applicable Rate for Adjusted Eurocurrency Rate borrowings will be 1.25% and the maximum will be 2.00%. The Credit Agreement also requires the Company to pay a commitment fee for the unused portion of the Revolving Facility, which will be a minimum of 0.20% and a maximum of 0.35%, depending on the Company's leverage ratio.

The Credit Agreement provides that loans under the Term Facility shall be repaid in equal quarterly installments of $21.9 million, commencing on the last day of the next full fiscal quarter and continuing on each three-month anniversary thereafter. The outstanding balance of the term loans will be due in May 2024.

The Credit Agreement contains the following financial maintenance covenants: (i) a maximum total leverage ratio not to exceed 4.50:1.00 (stepped down to 4.25:1.00 starting with the fiscal quarter ending on September 2020, with a further step down to 4.00:1.00 starting with the fiscal quarter ending on September 2021, followed by a final step down to 3.75:1.00 starting with the fiscal quarter ending on September 2022) and (ii) a minimum interest coverage ratio of 3.00:1.00.

As of June 30, 2019, we had a remaining borrowing capacity of $740.0 million under the Revolving Facility and we were in compliance with all covenants under the Credit Agreement.

Debt Issuance Costs

In connection with the amendment and restatement of the Credit Agreement, in May 2019, we incurred approximately $9.9 million of debt issuance costs of which $9.6 million were initially capitalized within long-term debt, net of current in the accompanying condensed consolidated balance sheets. In addition, when we amended and restated the Credit Agreement, we wrote-off previously unamortized debt issuance costs of $1.5 million within (loss)/gain on investments and other, net in the accompanying consolidated statement of operations; resulting in a remaining $14.6 million of previously unamortized costs. We will amortize all of these costs over the term of the Credit Agreement. For both the three months ended June 30, 2019 and 2018, $1.3 million was recognized in the accompanying condensed consolidated statement of operations related to the amortization of debt issuance costs. For the six months ended June 30, 2019 and 2018, $2.6 million and $2.7 million, respectively, were recognized related to the amortization of debt issuance costs.

7.55% Senior Debentures

In April 1998, we issued $100.0 million in aggregate principal amount of 7.55% senior debentures due 2028. The indentures governing these debentures, as amended, contain limited restrictions on us.

Interest Rate Swaps

We have entered into amortizing interest rate swaps ("Swaps") in order to convert a portion of our interest rate exposure on the Term Facility floating rate borrowings from variable to fixed. Under the Swaps, we agree to exchange floating rate for fixed rate interest payments periodically over the life of the agreement. The floating rates in our Swaps are based on the one-month London interbank offering rate. The notional balances, terms and maturities of our Swaps are designed to have at least 50% of our debt as fixed rate.

As of June 30, 2019, the Swaps have a combined remaining notional balance of $1.4 billion, a weighted average fixed interest rate of 2.00% (rates range from 1.03% to 2.98%), and scheduled terminations through December 2025. Notional balances under our Swaps are scheduled to increase and decrease based on our expectations of the level of variable rate debt to be in effect in future periods. Currently, we have scheduled notional amounts of between $1.4 billion and $1.2 billion through September 2020, then $1.2 billion and $1.0 billion through August 2022, and $416.0 million and $400.0 million thereafter until December 2025. Approximate weighted average fixed interest rates for the aforementioned time intervals are 2.18%, 2.61%, and 2.95%, respectively.

We have designated the Swaps as cash flow hedges. The estimated fair values of these cash flow hedges are recorded in prepaid expenses and other current assets as well as other assets and other liabilities in the accompanying condensed consolidated balance sheets. As of June 30, 2019, the estimated fair value of certain of these cash flow hedges resulted in an asset of $2.2 million recorded within prepaid and other current assets, with the remainder resulting in a liability of $48.5 million. As of December 31, 2018, the estimated fair value of certain of these cash flow hedges resulted in an asset of $13.3 million, of which $0.6 million is classified within prepaid expenses and other current assets, with the remainder resulting in a liability of $15.2 million.

Unrealized losses of $21.1 million (net of $7.0 million in deferred taxes) and unrealized gains of $4.1 million (net $1.4 million in deferred taxes) for the three months ended June 30, 2019 and 2018, respectively, were recognized in other comprehensive loss related to the Swaps. Unrealized losses of $33.3 million (net of $11.1 million in deferred taxes) and unrealized gains of $8.2 million (net of $2.7 million in deferred taxes) for the six months ended June 30, 2019 and 2018, respectively, were recognized in other comprehensive loss related to the Swaps.