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Long-Term Debt
12 Months Ended
Dec. 31, 2013
Long-Term Debt  
Long-Term Debt

6. Long-term Debt

 

Long-term debt at December 31, 2013 and 2012 was comprised of the following (in thousands):

   2013 2012
        
Revolving credit agreement (average rate of 2.1%) $ 252,500 $ 279,780
Senior Unsecured Notes due 2020 (5.625%)   250,000   250,000
Senior Secured Notes due 2020 (8.04%)   69,643   75,000
Other debt at an average rate of 3.6%, due through 2025   21,149   21,350
Capitalized lease arrangements at an average rate of 5.3%, due through 2026   10,850   11,982
        
     604,142   638,112
Less current portion    20,844   17,407
        
 Long-term debt  $ 583,298 $ 620,705

Principal payments required on the Company's long-term debt and capital leases in the five years and thereafter subsequent to December 31, 2013 are $20,844,000, $17,751,000, $14,903,000, $13,422,000, $265,037,000, and $272,185,000.

 

a.       Credit Facility

 

On June 29, 2012, the Company amended its revolving credit agreement to increase the borrowing capacity and adjust the interest rate spreads. On November 7, 2012, the Company further amended its revolving credit agreement to allow for the Company's issuance of the 5.625% senior unsecured notes (discussed below), which resulted in certain adjustments to the existing covenants. On June 14, 2013, the Company amended its revolving credit agreement to adjust the interest rate spreads and extend the maturity date by one year. The revolving credit agreement, as amended, permits the Company to borrow up to $475,000,000 at an interest rate equal to, at the Company's option, the base rate plus 0.25% to 1.00% or LIBOR plus 1.25% to 2.00%, or a combination thereof; provides for a fee of 0.25% to 0.40% of unused commitments; and contains certain covenants relating to the ratio of debt to operating performance measurements, interest coverage ratios and minimum net worth. Borrowings under the revolving credit agreement mature in June 2018 and are secured by a pledge of the stock of the Company's wholly-owned subsidiaries and the Company's partnership and membership interests in the limited partnerships and limited liability companies. The Company was in compliance with the covenants contained in the revolving credit agreement at December 31, 2013.

 

b.       Senior Unsecured Notes

 

On November 20, 2012, the Company completed a private offering of $250,000,000 aggregate principal amount of 5.625% senior unsecured notes due 2020 (the “Senior Unsecured Notes”). The net proceeds from the issuance of the Senior Unsecured Notes were used to reduce the outstanding indebtedness under the Company's existing revolving credit agreement. In connection with the issuance of the Senior Unsecured Notes, the Company entered into a registration rights agreement, dated November 20, 2012 (the “Registration Rights Agreement). On May 2, 2013, under the terms of the Registration Rights Agreement, the Company commenced an offer to exchange the outstanding Senior Unsecured Notes for an equal amount of such notes that are registered under the Securities Act of 1933, as amended. The exchange offer was completed on May 31, 2013 and all holders of the Senior Unsecured Notes participated in the exchange. The Senior Unsecured Notes are general unsecured obligations of the Company and are guaranteed by its existing and subsequently acquired or organized wholly owned domestic subsidiaries. The Senior Unsecured Notes are pari passu in right of payment with all the existing and future senior debt of the Company and senior to all existing and future subordinated debt of the Company. Interest on the Senior Unsecured Notes accrues at the rate of 5.625% per annum and is payable semi-annually in arrears on May 30 and November 30, through the maturity date of November 30, 2020.

Prior to November 30, 2015, the Company may redeem up to 35% of the aggregate principal amount of the Senior Unsecured Notes at a redemption price of 105.625% of the principal amount thereof, plus accrued and unpaid interest and liquidated damages, if any, using proceeds of one or more equity offerings. On or after November 30, 2015, the Company may redeem the Senior Unsecured Notes in whole or in part. The redemption price for such a redemption (expressed as percentages of principal amount) is set forth below, plus accrued and unpaid interest and liquidated damages, if any, if redeemed during the twelve-month period beginning on November 30 of the years indicated below:

Period Redemption Price
2015 104.219%
2016 102.813%
2017 101.406%
2018 and thereafter 100.000%

The Senior Unsecured Notes contain certain covenants which, among other things, limit, but may not restrict the Company's ability to enter into or guarantee additional borrowings, sell preferred stock, pay dividends and repurchase stock. The Company was in compliance with the covenants contained in the indenture relating to the Senior Unsecured Notes at December 31, 2013.

 

c.       Senior Secured Notes

 

The Company issued $75,000,000 principal amount of senior secured notes (the “Senior Secured Notes”) on May 28, 2010 pursuant to a note purchase agreement. The Senior Secured Notes mature on May 28, 2020. The Senior Secured Notes, which were originally issued with a stated interest rate of 6.04%, were amended on November 7, 2012 to allow for the Company's issuance of the Senior Unsecured Notes, which resulted in an increase in the annual interest rate of 2.00% to 8.04%, and included certain other adjustments to the existing covenants. The Senior Secured Notes are pari passu with the indebtedness under the Company's revolving credit agreement and the Senior Unsecured Notes and principal payments began in August 2013. The note purchase agreement governing the Senior Secured Notes contains covenants similar to the covenants in the revolving credit agreement and includes a make whole provision in the event of any prepayment of principle. The Company was in compliance with the covenants contained in the note purchase agreement relating to the Senior Secured Notes at December 31, 2013.

 

d.       Other Debt

 

Certain partnerships included in the Company's consolidated financial statements have loans with local lending institutions, included above in other debt, which are collateralized by certain assets of the centers with a book value of approximately $74,150,000. The Company and the partners have guaranteed payment of the loans in proportion to the relative partnership interests.