NOTE 3 – FINANCING

The following table identifies the amounts included in “Long-term debt” on the accompanying Condensed Consolidated Balance Sheets as of March 31, 2017, and December 31, 2016 (in thousands):



	March 31, 2017		December 31, 2016
Revolving Credit Facility, average interest rate of 4.000%	$	90,000	$	—
$500 million, 4.875% Senior Notes due 2021⁽¹⁾, effective interest rate of 4.959%	496,960		496,758
$300 million, 4.625% Senior Notes due 2021⁽²⁾, effective interest rate of 4.646%	298,749		298,679
$300 million, 3.800% Senior Notes due 2022⁽³⁾, effective interest rate of 3.845%	297,953		297,868
$300 million, 3.850% Senior Notes due 2023⁽⁴⁾, effective interest rate of 3.851%	298,411		298,355
$500 million, 3.550% Senior Notes due 2026⁽⁵⁾, effective interest rate of 3.570%	495,466		495,359
Long-term debt	$	1,977,539	$	1,887,019


⁽¹⁾	Net of unamortized discount of $1.3 million as of March 31, 2017, and $1.4 million as of December 31, 2016, and debt issuance costs of $1.7 million as of March 31, 2017, and $1.8 million as of December 31, 2016.


⁽²⁾	Net of unamortized discount of $0.2 million as of March 31, 2017, and December 31, 2016, and debt issuance costs of $1.0 million as of March 31, 2017, and $1.1 million as of December 31, 2016.


⁽³⁾	Net of unamortized discount of $0.7 million as of March 31, 2017, and December 31, 2016, and debt issuance costs of $1.4 million as of March 31, 2017, and $1.5 million as of December 31, 2016.


⁽⁴⁾	Net of unamortized discount of less than $0.1 million as of March 31, 2017, and December 31, 2016, and debt issuance costs of $1.6 million as of March 31, 2017, and December 31, 2016.


⁽⁵⁾	Net of unamortized discount of $0.8 million as of March 31, 2017, and December 31, 2016, and debt issuance costs of $3.8 million as of March 31, 2017, and $3.9 million as of December 31, 2016.

Unsecured revolving credit facility:

On January 14, 2011, the Company entered into a credit agreement, as amended by Amendment No. 1 dated as of September 9, 2011, and as further amended by Amendment No. 2 dated as of July 2, 2013, and as further amended by Amendment No. 3 dated as of June 18, 2015 (the “Credit Agreement”). The Credit Agreement provides for a $600 million unsecured revolving credit facility (the “Revolving Credit Facility”) arranged by Bank of America, N.A., which is scheduled to mature in July 2018. The Credit Agreement includes a $200 million sub-limit for the issuance of letters of credit and a $75 million sub-limit for swing line borrowings under the Revolving Credit Facility. As described in the Credit Agreement governing the Revolving Credit Facility, the Company may, from time to time, subject to certain conditions, increase the aggregate commitments under the Revolving Credit Facility by up to $200 million.

As of March 31, 2017, and December 31, 2016, the Company had outstanding letters of credit, primarily to support obligations related to workers’ compensation, general liability and other insurance policies, in the amounts of $41.2 million and $38.7 million, respectively, reducing the aggregate availability under the Revolving Credit Facility by those amounts.

Borrowings under the Revolving Credit Facility (other than swing line loans) bear interest, at the Company’s option, at the Base Rate or Eurodollar Rate (both as defined in the Credit Agreement) plus an applicable margin. Swing line loans made under the Revolving Credit Facility bear interest at the Base Rate plus the applicable margin for Base Rate loans. In addition, the Company pays a facility fee on the aggregate amount of the commitments in an amount equal to a percentage of such commitments. The interest rate margins and facility fee are based upon the better of the ratings assigned to the Company’s debt by Moody’s Investor Service, Inc. and Standard & Poor’s Ratings Services, subject to limited exceptions. As of March 31, 2017, based upon the Company’s credit ratings, its margin for Base Rate loans was 0.000%, its margin for Eurodollar Rate loans was 0.875% and its facility fee was 0.125%.

The Credit Agreement contains certain covenants, including limitations on indebtedness, a minimum consolidated fixed charge coverage ratio of 2.50:1.00 and a maximum consolidated leverage ratio of 3.00:1.00. The consolidated fixed charge coverage ratio includes a calculation of earnings before interest, taxes, depreciation, amortization, rent and non-cash share-based compensation expense. Fixed charges include interest expense, capitalized interest and rent expense. The consolidated leverage ratio includes a calculation of adjusted debt to earnings before interest, taxes, depreciation, amortization, rent and non-cash share-based compensation expense. Adjusted debt includes outstanding debt, outstanding stand-by letters of credit and similar instruments, six-times rent expense and excludes any premium or discount recorded in conjunction with the issuance of long-term debt. In the event that the Company should default on any covenant contained within the Credit Agreement, certain actions may be taken, including, but not limited to, possible termination of commitments, immediate payment of outstanding principal amounts plus accrued interest and other amounts payable under the Credit Agreement and litigation from lenders. As of March 31, 2017, the Company remained in compliance with all covenants under the Credit Agreement.

New unsecured revolving credit facility:

On April 5, 2017, the Company entered into a new credit agreement (the “New Credit Agreement”). The New Credit Agreement provides for a $1.2 billion unsecured revolving credit facility (the “New Revolving Credit Facility”) arranged by JPMorgan Chase Bank, N.A., which is scheduled to mature in April 2022. The New Credit Agreement includes a $200 million sub-limit for the issuance of letters of credit and a $75 million sub-limit for swing line borrowings under the New Revolving Credit Facility. As described in the New Credit Agreement governing the New Revolving Credit Facility, the Company may, from time to time, subject to certain conditions, increase the aggregate commitments under the New Revolving Credit Facility by up to $600 million.

In conjunction with the issuance of the New Credit Agreement, all outstanding loans and commitments, including the guarantees of each of the subsidiary guarantors, under the Credit Agreement dated January 14, 2011, were terminated and replaced by the loans and commitments under the New Credit Agreement. None of the Company’s subsidiaries are guarantors or obligors under the New Credit Agreement.

Borrowings under the New Revolving Credit Facility (other than swing line loans) bear interest, at the Company’s option, at either an Alternate Base Rate or an Adjusted LIBO Rate (both as defined in the New Credit Agreement) plus an applicable margin. Swing line loans made under the New Revolving Credit Facility bear interest at an Alternate Base Rate plus the applicable margin for Alternate Base Rate loans. In addition, the Company pays a facility fee on the aggregate amount of the commitments under the New Credit Agreement in an amount equal to a percentage of such commitments. The interest rate margins and facility fee are based upon the better of the ratings assigned to the Company’s debt by Moody’s Investor Service, Inc. and Standard & Poor’s Ratings Services, subject to limited exceptions. As of April 5, 2017, with the New Credit Agreement, based upon the Company’s current credit ratings, its margin for Alternate Base Rate loans is 0.000%, its margin for Eurodollar Rate Loans is 0.900% and its facility fee is 0.100%.

The New Credit Agreement contains certain covenants, including limitations on subsidiary indebtedness, a minimum consolidated fixed charge coverage ratio of 2.50:1.00 and a maximum consolidated leverage ratio of 3.50:1.00. The consolidated fixed charge coverage ratio includes a calculation of earnings before interest, taxes, depreciation, amortization, rent and non-cash share-based compensation expense. Fixed charges include interest expense, capitalized interest and rent expense. The consolidated leverage ratio includes a calculation of adjusted debt to earnings before interest, taxes, depreciation, amortization, rent and non-cash share-based compensation expense. Adjusted debt includes outstanding debt, outstanding stand-by letters of credit and similar instruments, five-times rent expense and excludes any premium or discount recorded in conjunction with the issuance of long-term debt. In the event that the Company should default on any covenant contained in the New Credit Agreement, certain actions may be taken, including, but not limited to, possible termination of commitments, immediate payment of outstanding principal amounts plus accrued interest and other amounts payable under the New Credit Agreement and litigation from lenders.

Senior notes:

The Company has issued a cumulative $1.9 billion aggregate principal amount of unsecured senior notes, which are due between January 2021 and March 2026, with United Missouri Bank as trustee. Interest on the senior notes, ranging from 3.550% to 4.875%, is payable semi-annually and is computed on the basis of a 360-day year.

As of March 31, 2017, the senior notes were guaranteed on a senior unsecured basis by each of the Company’s subsidiaries (“Subsidiary Guarantors”) that incurs or guarantees obligations under the Company’s Credit Agreement or under other credit facility or capital markets debt of the Company’s or any of the Company’s Subsidiary Guarantors. The guarantees were joint and several and full and unconditional, subject to certain customary automatic release provisions, including release of the Subsidiary Guarantor’s guarantee under the Company’s Credit Agreement and certain other debt, or, in certain circumstances, the sale or other disposition of a majority of the voting power of the capital interest in, or of all or substantially all of the property of, the Subsidiary Guarantor. Each of the Subsidiary Guarantors is 100% owned, directly or indirectly, by the Company, and the Company has no independent assets or operations other than those of its subsidiaries. The only direct or indirect subsidiaries of the Company that would not be Subsidiary Guarantors would be minor subsidiaries. Neither the Company, nor any of its Subsidiary Guarantors, is subject to any material or significant restrictions on the Company’s ability to obtain funds from its subsidiaries by dividend or loan or to transfer assets from such subsidiaries, except as provided by applicable law. Each of the senior notes is subject to certain customary covenants, with which the Company complied as of March 31, 2017.