7.LONG-TERM DEBT

Long-term debt consists of the following:


	December 31,
	2014		2013
Revolver under prior credit agreement	$	680,000	$	727,100
Prior term loan agreement		660,000		700,000
2015 Notes		175,000		175,000
2016 Notes		100,000		100,000
2018 Notes		50,000		50,000
2019 Notes		175,000		175,000
2021 Notes		100,000		100,000
Tax-exempt bonds		31,430		33,030
Notes payable to sellers and other third parties, bearing interest at 2.5% to 10.9%, principal and interest payments due periodically with due dates ranging from 2015 to 2036		8,135		12,845
		1,979,565		2,072,975
Less – current portion		(3,649)		(5,385)
	$	1,975,916	$	2,067,590

Revolver under Prior Credit Agreement

As of December 31, 2014, the Company had a senior revolving credit facility with a syndicate of banks for which Bank of America, N.A. acted as administrative agent (the “prior credit agreement”). The maximum borrowings available under the prior credit agreement were $1,200,000 as of December 31, 2014 and 2013. The Company had the ability to increase commitments under the prior credit agreement from $1,200,000 to $1,500,000, subject to conditions including that no default, as defined in the prior credit agreement, has occurred, although no existing lender had any obligation to increase its commitment. Swing line loans could be issued at the request of the Company in an aggregate amount not to exceed a $25,000 sublimit and there was no maximum amount of standby letters of credit that could be issued under the prior credit agreement; however, the issuance of swing line loans and standby letters of credit both reduced the amount of total borrowings available. As of December 31, 2014, $680,000 was outstanding under the prior credit agreement, exclusive of outstanding standby letters of credit of $73,031. As of December 31, 2013, $727,100 was outstanding under the prior credit agreement, exclusive of outstanding standby letters of credit of $75,166. The prior credit agreement was scheduled to mature in May 2018. The Company incurred $4,722 of debt issuance costs associated with the prior credit agreement, which had an unamortized balance of $3,632 recorded in Other assets, net in the Consolidated Balance Sheets at December 31, 2014. On January 26, 2015, the prior credit agreement was refinanced and replaced by the credit agreement (as defined below).

The borrowings under the prior credit agreement bore interest, at the Company’s option, at either the base rate plus the applicable base rate margin (approximately 3.63% and 3.75% at December 31, 2014 and 2013, respectively) on base rate loans and swing line loans, or the LIBOR rate plus the applicable LIBOR margin (approximately 1.54% and 1.67% at December 31, 2014 and 2013, respectively) on LIBOR loans. The applicable margins under the prior credit agreement varied depending on the Company’s leverage ratio, as defined in the prior credit agreement. As of December 31, 2014 and 2013, the margins were 1.375% and 1.50%, respectively, for LIBOR loans and 0.50% and 0.50%, respectively, for base rate loans and swing line loans. As of December 31, 2014, $677,000 of the borrowings outstanding under the prior credit agreement were in LIBOR loans and $3,000 of the borrowings outstanding under the prior credit agreement were in swing line loans. As of December 31, 2013, $720,000 of the borrowings outstanding under the prior credit agreement were in LIBOR loans and $7,100 of the borrowings outstanding under the prior credit agreement were in swing line loans.

The prior credit agreement required the Company to pay an annual commitment fee on the unused portion of the facility. The commitment fee was 0.20% and 0.23% as of December 31, 2014 and 2013, respectively.

The borrowings under the prior credit agreement were not collateralized. The prior credit agreement contained representations, warranties, covenants and events of default, including a change of control event of default and limitations on incurrence of indebtedness and liens, new lines of business, mergers, transactions with affiliates and restrictive payments. During the continuance of an event of default, the lenders could take a number of actions, including declaring the entire amount then outstanding under the prior credit agreement due and payable. The prior credit agreement contained cross-defaults if the Company defaulted on the prior term loan agreement, the master note purchase agreement or certain other debt. The prior credit agreement required that the Company maintain specified quarterly leverage and interest coverage ratios. The required leverage ratio could not exceed 3.50x total debt to earnings before interest, taxes, depreciation and amortization, or EBITDA. The required interest coverage ratio was at least 2.75x total interest expense to earnings before interest and taxes, or EBIT. As of December 31, 2014 and 2013, the Company’s leverage ratio was 2.67x and 3.08x, respectively. As of December 31, 2014 and 2013, the Company’s interest coverage ratio was 7.94x and 6.33x, respectively.

Prior Term Loan Agreement

On October 25, 2012, the Company entered into a term loan agreement in the original principal amount of $800,000 with Bank of America, N.A. and the other banks and lending institutions party thereto, as lenders, Bank of America, N.A., as administrative agent, and JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association, as co-syndication agents (as amended, the “prior term loan agreement”). On January 26, 2015, the prior term loan agreement was refinanced and replaced by the credit agreement (as defined below). The prior term loan agreement required the aggregate outstanding principal amount to be paid at the maturity of the prior term loan agreement on October 25, 2017. The borrowings under the prior term loan agreement were required to be used only to fund the R360 acquisition pursuant to the R360 purchase and sale agreement and to pay fees and expenses incurred in connection with the R360 acquisition and the Company’s entry into the prior term loan agreement. The Company incurred $7,370 of debt issuance costs associated with the prior term loan agreement, which had an unamortized balance of $3,809 recorded in Other assets, net in the Consolidated Balance Sheets at December 31, 2014.

Outstanding amounts on the prior term loan agreement could be either base rate loans or LIBOR loans. At December 31, 2014 and 2013, all amounts outstanding under the prior term loan agreement were in LIBOR loans which bore interest at the LIBOR rate plus the applicable LIBOR margin (approximately 1.66% and 2.04% at December 31, 2014 and 2013, respectively). The LIBOR rate was determined by the administrative agent in a customary manner as described in the prior term loan agreement. The applicable margins under the prior term loan agreement varied depending on the Company’s leverage ratio, as defined in the prior term loan agreement, and ranged from 1.250% per annum to 2.000% per annum for LIBOR loans. As of December 31, 2014 and 2013, the margin was 1.500% and 1.875%, respectively, for LIBOR loans. Borrowings under the prior term loan agreement were not collateralized.

The prior term loan agreement contained representations and warranties and placed certain business, financial and operating restrictions on the Company relating to, among other things, indebtedness, liens, investments, mergers, consolidation and disposition of assets, sale and leaseback transactions, restricted payments and redemptions, burdensome agreements, business activities, transactions with affiliates, prepayments of indebtedness and accounting changes. During the continuance of an event of default, the lenders could take a number of actions, including declaring the entire amount then outstanding under the prior term loan agreement due and payable. The prior term loan agreement contained cross-defaults if the Company defaulted on the prior credit agreement, the master note purchase agreement or certain other debt. The prior term loan agreement required that the Company maintain specified quarterly leverage and interest coverage ratios. The required leverage ratio could not exceed 3.50x total debt to EBITDA. The required interest coverage ratio was at least 2.75x total interest expense to EBIT. As of December 31, 2014 and 2013, the Company’s leverage ratio was 2.67x and 3.08x, respectively. As of December 31, 2014 and 2013, the Company’s interest coverage ratio was 7.94x and 6.33x, respectively.

New Revolving Credit and Term Loan Agreement

On January 26, 2015, the Company entered into a new revolving credit and term loan agreement (the “credit agreement”) with Bank of America, N.A., as Administrative Agent, and the other lenders from time to time party thereto (the “Lenders”). The credit agreement has a scheduled maturity date of January 24, 2020.

Pursuant to the credit agreement, the Lenders have committed to provide revolving advances up to an aggregate principal amount of $1,200,000 at any one time outstanding. The Lenders have also provided a term loan in an aggregate principal amount of $800,000. The Company has the option to request increases in the aggregate commitments for revolving advances and one or more additional term loans, provided that the aggregate principal amount of commitments and term loans never exceeds $2,300,000. For any such increase, the Company may ask one or more Lenders to increase their existing commitments or provide additional term loans and/or invite additional eligible lenders to become Lenders under the credit agreement. As part of the aggregate commitments under the facility, the credit agreement provides for letters of credit to be issued at the request of the Company in an aggregate amount not to exceed $250,000 and for swing line loans to be issued at the request of the Company in an aggregate amount not to exceed the lesser of $35,000 and the aggregate commitments.

Interest accrues on advances, at the Company’s option, at a LIBOR rate or a base rate plus an applicable margin for each interest period. The issuing fees for all letters of credit are also based on an applicable margin. The applicable margin used in connection with interest rates and fees is based on the Company’s consolidated leverage ratio. The applicable margin for LIBOR rate loans and letter of credit fees ranges from 1.00% to 1.500% and the applicable margin for base rate loans and swing line loans ranges from 0.00% to 0.500%. The Company will also pay a fee based on its consolidated leverage ratio on the actual daily unused amount of the aggregate revolving commitments. The borrowings under the credit agreement are not collateralized. Proceeds of the borrowings under the credit agreement were used to refinance the prior credit agreement, which had a maturity of May 4, 2018, and the prior term loan agreement, which had a maturity of October 25, 2017, and will be used for general corporate purposes, including working capital, capital expenditures and permitted acquisitions.

The credit agreement contains representations, warranties, covenants and events of default, including a change of control event of default and limitations on incurrence of indebtedness and liens, limitations on new lines of business, mergers, transactions with affiliates and restrictive agreements. The credit agreement also includes covenants limiting, as of the last day of each fiscal quarter, (a) the ratio of the consolidated funded debt as of such date to the Consolidated EBITDA (as defined in the credit agreement), measured for the preceding 12 months, to not more than 3.50x (or 3.75x during material acquisition periods, subject to certain limitations) and (b) the ratio of Consolidated EBIT (as defined in the credit agreement) to consolidated interest expense, in each case, measured for the preceding 12 months, to not less than 2.75x. During the continuance of an event of default, the Lenders may take a number of actions, including declaring the entire amount then outstanding under the credit agreement due and payable.

The Company will defer and amortize through the maturity date of the credit agreement, or January 2020, $6,874 of the $7,441 unamortized balance of debt issuance costs at December 31, 2014 associated with the prior credit agreement and term loan agreement.

Master Note Purchase Agreement

Senior Notes due 2015

On July 15, 2008, the Company entered into a master note purchase agreement with certain accredited institutional investors pursuant to which the Company issued and sold to the investors at a closing on October 1, 2008, $175,000 of senior uncollateralized notes due October 1, 2015 in a private placement. The 2015 Notes bear interest at the fixed rate of 6.22% per annum with interest payable in arrears semi-annually on April 1 and October 1 beginning on April 1, 2009, and with principal payable at the maturity of the 2015 Notes on October 1, 2015. The Company is amortizing the $1,026 debt issuance costs over a seven-year term through the maturity date, or October 1, 2015. The Company has the intent and ability to redeem the 2015 Notes on October 1, 2015 using borrowings under its credit agreement.

Senior Notes due 2019

On October 26, 2009, the Company entered into a first supplement to the master note purchase agreement with certain accredited institutional investors pursuant to which the Company issued and sold to the investors on that date $175,000 of senior uncollateralized notes due November 1, 2019 in a private placement. The 2019 Notes bear interest at the fixed rate of 5.25% per annum with interest payable in arrears semi-annually on May 1 and November 1 beginning on May 1, 2010, and with principal payable at the maturity of the 2019 Notes on November 1, 2019. The Company is amortizing the $152 debt issuance costs over a 10-year term through the maturity date, or November 1, 2019.

Senior Notes due 2016, 2018 and 2021

On April 1, 2011, the Company entered into a second supplement to the master note purchase agreement with certain accredited institutional investors, pursuant to which the Company issued and sold to the investors on that date $250,000 of senior uncollateralized notes at fixed interest rates with interest payable in arrears semi-annually on October 1 and April 1 beginning on October 1, 2011 in a private placement. Of these notes, $100,000 will mature on April 1, 2016 with an annual interest rate of 3.30% (the “2016 Notes”), $50,000 will mature on April 1, 2018 with an annual interest rate of 4.00% (the “2018 Notes”), and $100,000 will mature on April 1, 2021 with an annual interest rate of 4.64% (the “2021 Notes”). The Company is amortizing the $1,489 debt issuance costs through the maturity dates of the respective notes.

The 2015 Notes, 2016 Notes, 2018 Notes, 2019 Notes, and 2021 Notes (collectively, the “Senior Notes”) are uncollateralized obligations and rank equally in right of payment with each of the Senior Notes, the obligations under the Company’s credit agreement, as well as the Company’s prior obligations under the prior credit agreement and term loan agreement. The Senior Notes are subject to representations, warranties, covenants and events of default. The master note purchase agreement contains cross-defaults if the Company defaults on the credit agreement or certain other debt. The master note purchase agreement requires that the Company maintain specified quarterly leverage and interest coverage ratios. The required leverage ratio cannot exceed 3.75x total debt to EBITDA. The required interest coverage ratio must be at least 2.75x total interest expense to EBIT. As of December 31, 2014 and 2013, the Company’s leverage ratio was 2.67x and 3.08x, respectively. As of December 31, 2014 and 2013, the Company’s interest coverage ratio was 7.94x and 6.33x, respectively.

Upon the occurrence of an event of default, payment of the Senior Notes may be accelerated by the holders of the respective notes. The Senior Notes may also be prepaid at any time in whole or from time to time in any part (not less than 5% of the then-outstanding principal amount) by the Company at par plus a make-whole amount determined in respect of the remaining scheduled interest payments on the Senior Notes, using a discount rate of the then current market standard for United States treasury bills plus 0.50%. In addition, the Company will be required to offer to prepay the Senior Notes upon certain changes in control.

The Company may issue additional series of senior uncollateralized notes, including floating rate notes, pursuant to the terms and conditions of the master note purchase agreement, as amended, provided that the purchasers of the Senior Notes shall not have any obligation to purchase any additional notes issued pursuant to the master note purchase agreement and the aggregate principal amount of the outstanding notes and any additional notes issued pursuant to the master note purchase agreement shall not exceed $1,250,000.

Tax-Exempt Bonds

The Company’s tax-exempt bond financings are as follows:



	Type of	Interest Rate on Bond at December 31,	Maturity Date of	Outstanding Balance at December 31,				Backed by Letter of Credit
Name of Bond	Interest Rate	2014	Bond	2014		2013		(Amount)
Tehama Bond	Variable	-%	June 1, 2014	$	-	$	205	$	-
San Jose Bond – Series 2001A	Variable	-	September 1, 2016		-		1,395		-
West Valley Bond	Variable	0.09	August 1, 2018		15,500		15,500		15,678
LeMay Washington Bond	Variable	0.07	April 1, 2033		15,930		15,930		16,126
				$	31,430	$	33,030	$	31,804

In October 2013, the Company gave notice to redeem its Tehama Bond with a remaining principal balance of $205. The Company paid in full the principal and accrued interest on this bond on January 8, 2014.

In July 2014, the Company gave notice to redeem its San Jose Bond – Series 2001A with a remaining principal balance of $1,395. The Company paid in full the principal and accrued interest on this bond on September 3, 2014.

The variable-rate bonds are all remarketed weekly by a remarketing agent to effectively maintain a variable yield. If the remarketing agent is unable to remarket the bonds, then the remarketing agent can put the bonds to the Company. The Company obtained standby letters of credit, issued under its prior credit agreement, to guarantee repayment of the bonds in this event. The Company classified these borrowings as long-term at December 31, 2014, because the borrowings were supported by standby letters of credit issued under the Company’s prior credit agreement, which was scheduled to mature in May 2018. The letters of credit were automatically rolled over into the credit agreement in January 2015.

As of December 31, 2014, aggregate contractual future principal payments by calendar year on long-term debt are due as follows:


2015 *	$	3,649
2016		101,537
2017		660,437
2018		920,918
2019		175,411
Thereafter		117,613
	$	1,979,565

______________________

* The Company has recorded the 2015 Notes in the 2018 category in the table above as the Company has the intent and ability to redeem the 2015 Notes on October 1, 2015 using borrowings under its credit agreement.