Long-Term Obligations

6 Months Ended

Jun. 30, 2013

Long-Term Obligations

Long-Term Obligations

5. Long-Term Obligations

Equipment Financing Arrangement

In October 2008, we entered into an equipment financing loan agreement and in September 2009 and June 2012, we amended the loan agreement to increase the aggregate maximum amount of principal we could draw under the agreement.  Each draw down under the loan agreement has a term of three years, with principal and interest payable monthly.  Interest on amounts we borrow under the loan agreement is based upon the three year interest rate swap at the time we make each draw down plus 3.5 or four percent, depending on the date of the draw. We are using the equipment purchased under the loan agreement as collateral.  In June 2012, we drew down $9.1 million in principal under the loan agreement at an interest rate of 4.12 percent and in June 2013 we drew down $2.5 million in principal at an interest rate of 4.38 percent. As of June 30, 2013, our outstanding borrowings under this loan agreement were at a weighted average interest rate of 4.54 percent and we can borrow up to an additional $3.4 million in principal to finance the purchase of equipment until April 2014.  The carrying balance under this loan agreement at June 30, 2013 and December 31, 2012 was $9.9 million and $10.0 million, respectively. We will continue to use equipment lease financing as long as the terms remain commercially attractive.