Fair Value of Financial Instruments and Long Term Debt

12 Months Ended

Apr. 30, 2020

Fair Value of Financial Instruments and Long-Term Debt

FAIR VALUE OF FINANCIAL INSTRUMENTS AND LONG-TERM DEBT

A summary of the fair value of the Company’s financial instruments follows.

Cash and cash equivalents, receivables, and accounts payable: The carrying amount approximates fair value due to the short maturity of these instruments or the recent purchase of the instruments at current rates of interest.

Long-term debt: The fair value of the Company’s long-term debt (including current maturities) and finance lease obligations is estimated based on the current rates offered to the Company for debt of the same or similar issues. The fair value of the Company’s long-term debt and capital lease obligations was approximately $1,341,000 and $1,272,000, respectively, at April 30, 2020 and 2019.

The carrying amount of the Company’s long-term debt and finance lease obligations by issuance is as follows:



	As of April 30,
	2020		2019
Finance lease liabilities (Note 7)	$	16,746	$	16,480
5.72% Senior notes due in 14 installments beginning September 30, 2012 and ending March 30, 2020	—		15,000
5.22% Senior notes due August 9, 2020 (1)	569,000		569,000
3.67% Senior notes (Series A) due in 7 installments beginning June 17, 2022, and ending June 15, 2028	150,000		150,000
3.75% Senior notes (Series B) due in 7 installments beginning December 17, 2022 and ending December 18, 2028	50,000		50,000
3.65% Senior notes (Series C) due in 7 installments beginning May 2, 2025 and ending May 2, 2031	50,000		50,000
3.72% Senior notes (Series D) due in 7 installments beginning October 28, 2025 and ending October 28, 2031	50,000		50,000
3.51% Senior notes (Series E) due June 13, 2025	150,000		150,000
3.77% Senior notes (Series F) due August 22, 2028	250,000		250,000
	1,285,746		1,300,480
Less current maturities (2)	571,244		17,205
	$	714,502	$	1,283,275

(1) The Company is in the process of refinancing these Senior notes, and expects to execute the applicable note purchase agreement for the refinancing in the near future shortly after the report date.

(2) Long-term debt is presented gross in the table above, but net of unamortized debt issuance costs of $964 and $1,171 on the consolidated balance sheets for the years ended April 30, 2020 and 2019, respectively.

In January 2019, the Company entered into the Credit Facility that provides for a $300 million unsecured revolving line of credit, a $30 million sublimit for letters of credit and a $30 million sublimit for swingline loans. The Credit Facility contains an expansion option permitting the Company to request an increase of the Credit Facility from time to time up to an aggregate additional $150 million from the lenders or other financial institutions acceptable to the Company and the Administrative Agent, upon the satisfaction of certain conditions, including the consent of the lenders whose commitments would increase. The maturity date is January 11, 2024. Amounts borrowed under the Credit Facility bear interest at variable rates based upon, at the Company's option, either (a) LIBOR plus an applicable margin or (b) an alternate base rate. The Credit Facility also carries a facility fee between 0.2% and 0.4% per annum based on the Company's consolidated leverage ratio as defined in the credit agreement. The Company had $120,000 and 75,000 outstanding under the line of credit at April 30, 2020 and 2019, respectively.

Concurrently with this credit agreement, the Company also reduced the Bank Line from $150,000 to $25,000. The Bank Line bears interest at a variable rate subject to change from time to time based on changes in an independent index referred to in the Bank Line as the Federal Funds Offered Rate (the “Index”). The interest rate to be applied to the unpaid principal balance of the Bank Line was at a rate of 1.0% over the Index. There was $0 outstanding at April 30, 2020 and 2019. The line of credit is due upon demand.

Interest expense is net of interest income of $860, $595, and $1,583 for the years ended April 30, 2020, 2019, and 2018, respectively. Interest expense is also net of interest capitalized of $5,258, $3,057, and $2,260 during the years ended April 30, 2020, 2019, and 2018, respectively.

The agreements relating to the above long-term debt contain certain operating and financial covenants. At April 30, 2020, the Company was in compliance with all such operating and financial covenants.

Listed below are the aggregate maturities of long-term debt, including finance lease obligations, for the 5 years commencing May 1, 2020 and thereafter:



Years ended April 30,	Finance Leases		Senior Notes		Total
2021	$	2,244	$	569,000	$	571,244
2022	2,354		—		2,354
2023	2,484		20,000		22,484
2024	2,060		32,000		34,060
2025	734		32,000		32,734
Thereafter	6,870		616,000		622,870
	$	16,746	$	1,269,000	$	1,285,746

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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