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Long-Term Debt
12 Months Ended
Dec. 31, 2011
Long-Term Debt [Abstract]  
Long-Term Debt

Note G: Long-Term Debt

 

 

    December 31

            

    (add 000)

   2011     2010  

    6.875% Notes, due 2011

       $ --        $ 242,129   

    6.6% Senior Notes, due 2018

     298,476        298,288   

    7% Debentures, due 2025

     124,417        124,393   

    6.25% Senior Notes, due 2037

     247,915        247,882   

    Term Loan Facility, due 2015, interest rate of 2.20% at December 31, 2011

     250,000        --     

    Term Loan, due 2012, interest rate of 3.29% at December 31, 2010

     --          111,750   

    Revolving Facility, interest rate of 2.64% at December 31, 2011

     35,000        --     

    AR Credit Facility, interest rate of 1.66% at December 31, 2011

     100,000        --     

    Other notes

     4,276        6,317   

    Total

     1,060,084        1,030,759   

    Less current maturities

     (7,182     (248,714

    Long-term debt

   $ 1,052,902      $ 782,045   

On March 31, 2011, the Corporation entered into a Credit Agreement with JPMorgan Chase Bank, N.A., as Administrative Agent, Wells Fargo Bank, N.A., Branch Banking and Trust Company, SunTrust Bank, and Bank of America, N.A., as Co-Syndication Agents, and the lenders party thereto (the "Credit Agreement"), consisting of a $250,000,000 senior unsecured term loan (the "Term Loan Facility") and a $350,000,000 four-year senior unsecured revolving facility (the "Revolving Facility", and together with the Term Loan Facility, the "Senior Unsecured Credit Facilities"). The Senior Unsecured Credit Facilities are syndicated with the following banks:

 

    (add 000)

    Lender

       Revolving Facility    
Commitment
         Term Loan Facility    
Commitment
 

    JPMorgan Chase Bank, N.A.

       $ 46,667               $ 33,333       

    Wells Fargo Bank, N.A.

     46,667             33,333       

    SunTrust Bank

     46,667             33,333       

    Branch Banking and Trust Company

     46,667             33,333       

    Bank of America, N.A.

     46,667             33,333       

    Citibank, N.A.

     29,167             20,833       

    Deutsche Bank AG New York Branch

     29,167             20,833       

    The Northern Trust Company

     29,167             20,833       

    Comerica Bank

     14,582             10,418       

    Regions Bank

     14,582             10,418       
  

 

 

    

 

 

 

    Total

       $ 350,000               $ 250,000       
  

 

 

    

 

 

 

Borrowings under the Senior Unsecured Credit Facilities bear interest, at the Corporation's option, at rates based upon LIBOR or a base rate, plus, for each rate, a margin determined in accordance with a ratings-based pricing grid. The base rate is defined as the highest of (i) JPMorgan Chase Bank N.A.'s prime lending rate, (ii) the federal funds rate plus 0.5% and (iii) one-month LIBOR plus 1%.

The Revolving Facility expires on March 31, 2015, with any outstanding principal amounts, together with interest accrued thereon, due in full on that date.

On March 31, 2011, the Corporation borrowed $250,000,000 under the Term Loan Facility, a portion of which was used to prepay the $111,750,000 Term Loan due 2012. The Corporation is required to make annual principal payments of $5,000,000, with the remaining outstanding principal, together with interest accrued thereon, due in full on March 31, 2015.

On March 31, 2011, the Corporation entered into the Second Amendment to Account Purchase Agreement with Wells Fargo Bank, N.A., which amended its $100,000,000 secured accounts receivable credit facility (the "AR Credit Facility"). As amended, borrowings under the AR Credit Facility bear interest at a rate equal to the one-month LIBOR plus 1.35%. Borrowings under the AR Credit Facility are limited based on the balance of the Corporation's accounts receivable; however, this limitation is not expected to reduce the availability below the $100,000,000 facility maximum. The AR Credit Facility matures on April 20, 2012.

On April 1, 2011, the Corporation borrowed $100,000,000 under the AR Credit Facility, which in addition to proceeds from the Term Loan Facility, was used to repay $242,140,000 of 6.875% Notes that matured on that date. At December 31, 2011, outstanding borrowings of $100,000,000 were classified as long-term on the consolidated balance sheet as the Corporation has the ability and intent to refinance its AR Credit Facility with borrowings that mature in more than twelve months. Currently, the Corporation is in negotiations with its lender to renew the AR Credit Facility for successive one-year terms through 2015. Furthermore, the Corporation has capacity under its Revolving Facility to refinance this debt if the AR Credit Facility cannot be renewed.

On January 23, 2012, the Corporation repurchased $20,000,000 par value of its outstanding 6.25% Senior Notes due 2037 at 90.75. This repurchase was financed with borrowings of $18,200,000 under the Corporation's Revolving Facility, which are due March 31, 2015.

In 2010, the Corporation repaid $217,590,000 of floating rate senior notes through the use of cash.

The Corporation's 6.6% Senior Notes due 2018 and 6.25% Senior Notes due 2037 (collectively, the "Senior Notes") are senior unsecured obligations of the Corporation, ranking equal in right of payment with the Corporation's existing and future unsubordinated indebtedness. Upon a change of control repurchase event and a below investment grade credit rating, the Corporation will be required to make an offer to repurchase all outstanding Senior Notes at a price in cash equal to 101% of the principal amount of the Senior Notes, plus any accrued and unpaid interest to, but not including, the purchase date.

All Debentures and Senior Notes are carried net of original issue discount, which is being amortized by the effective interest method over the life of the issue. Senior Notes are redeemable prior to their respective maturity dates. The principal amount, effective interest rate and maturity date for the Corporation's Debentures and Senior Notes are as follows:

 

      Principal
Amount
(add 000)
     Effective
Interest
Rate
  Maturity Date

6.6% Senior Notes

   $   300,000       6.81%   April 15, 2018

7% Debentures

   $ 125,000       7.12%   December 1, 2025

6.25% Senior Notes

   $ 250,000       6.45%   May 1, 2037

The Corporation's Credit Agreement and AR Credit Facility, as amended, require the Corporation's ratio of consolidated debt to consolidated earnings before interest, taxes, depreciation, depletion and amortization (EBITDA), as defined, for the trailing twelve months (the "Ratio") to not exceed 3.50x as of the end of any fiscal quarter, provided that the Corporation may exclude from the Ratio debt incurred in connection with certain acquisitions for a period of 180 days so long as the Corporation maintains specified ratings on its long-term unsecured debt and the Ratio calculated without such exclusion does not exceed 3.75x. Additionally, if no amounts are outstanding under both the Revolving Facility and the AR Credit Facility, consolidated debt, including debt guaranteed by the Corporation, may be reduced by the Corporation's unrestricted cash and cash equivalents in excess of $50,000,000, such reduction not to exceed $200,000,000, for purposes of the covenant calculation.The Corporation was in compliance with the Ratio at December 31, 2011.

Effective February 24, 2012, the Corporation amended the Ratio to ensure that the impact of business development costs for the proposed business combination with Vulcan Materials Company ("Vulcan") (See Note R) and the seasonal working capital requirements for the newly-acquired Colorado operations do not impair liquidity available under the Corporation's Credit Agreement and AR Credit Facility. The amendment temporarily increases the maximum Ratio to 3.95x at March 31, 2012 and June 30, 2012, stepping down to 3.75x at September 30, 2012. The Ratio returns to the pre-amendment maximum of 3.50x for the December 31, 2012 calculation date. The amendment also allows the Corporation to exclude from the Ratio at March 31, 2012 and June 30, 2012 debt associated with the newly-acquired Colorado operations, which was allowed only through the March 31, 2012 calculation date prior to the amendment.

Available borrowings under the Revolving Facility are reduced by any outstanding letters of credit issued by the Corporation under the Revolving Facility. At December 31, 2011 and 2010, the Corporation had $1,963,000 of outstanding letters of credit issued under the Revolving Facility. The Corporation paid an upfront loan commitment fee to the bank group that is being amortized over the life of the Revolving Facility. Unused fees are paid on undrawn revolving balances.

The Corporation has a $10,000,000 short-term line of credit. No amounts were outstanding under this line of credit at December 31, 2011 or 2010.

The Corporation's long-term debt maturities for the five years following December 31, 2011, and thereafter are:

 

    (add 000)

       

2012

   $ 7,182   

2013

     6,181   

2014

     5,229   

2015

     370,207   

2016

     109   

Thereafter

     671,176   

Total

   $   1,060,084   

Accumulated other comprehensive loss includes the unamortized value of terminated forward starting interest rate swap agreements. For the years ended December 31, 2011 and 2010, the Corporation recognized $963,000 and $898,000, respectively, as additional interest expense. The ongoing amortization of the terminated value of the forward starting interest rate swap agreements will increase annual interest expense by approximately $1,000,000 until the maturity of the 6.6% Senior Notes in 2018.