7.LONG-TERM DEBT

Long-term debt consists of the following:


	December 31,
	2015		2014
Revolver under credit agreement	$	390,000	$	680,000
Term loan under credit agreement		800,000		660,000
2015 Notes		-		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
2022 Notes		125,000		-
2025 Notes		375,000		-
Tax-exempt bonds		31,430		31,430
Notes payable to sellers and other third parties, bearing interest at 3.0% to 10.9%, principal and interest payments due periodically with due dates ranging from 2016 to 2036		10,855		8,135
		2,157,285		1,979,565
Less – current portion		(2,127)		(3,649)
Less – debt issuance costs		(8,031)		(4,764)
	$	2,147,127	$	1,971,152

Revolving Credit and Term Loan Agreement

The Company has a 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”). 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 “revolver”). The Lenders have also provided a term loan in an aggregate principal amount of $800,000 (the “term loan”). 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. As of December 31, 2015, $800,000 under the term loan and $390,000 under the revolver were outstanding under the credit agreement, exclusive of outstanding standby letters of credit of $78,373. As of December 31, 2014, $660,000 under the term loan and $680,000 under the revolver were outstanding under the credit agreement, exclusive of outstanding standby letters of credit of $73,031. The Company has $4,136 of debt issuance costs related to the credit agreement recorded in Other assets, net in the Consolidated Balance Sheets at December 31, 2015, which are being amortized through the maturity date, or January 2020.

Interest accrues on advances on the revolver, at the Company’s option, at a LIBOR rate plus the applicable LIBOR margin (for a total rate of 1.44% and 1.54% at December 31, 2015 and 2014, respectively) on LIBOR loans or a base rate plus an applicable margin (for a total rate of 3.70% and 3.63% at December 31, 2015 and 2014, respectively) on base rate and swing line loans 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 was 1.20% and 1.375% at December 31, 2015 and 2014, respectively, and the applicable margin for base rate loans and swing line loans was 0.50% and 0.50% at December 31, 2015 and 2014, respectively. As of December 31, 2015, $385,000 of the borrowings outstanding under the revolver were in LIBOR loans and $5,000 of the borrowings outstanding under the revolver were in swing line loans. As of December 31, 2014, $677,000 of the borrowings outstanding under the revolver were in LIBOR loans and $3,000 of the borrowings outstanding under the revolver were in swing line loans.

Outstanding amounts on the term loan could be either base rate loans or LIBOR loans. At December 31, 2015 and 2014, all amounts outstanding under the term loan were in LIBOR loans which bear interest at the LIBOR rate plus the applicable LIBOR margin (for a total rate of 1.44% and 1.66% at December 31, 2015 and 2014, respectively). The applicable margin is based on the Company’s consolidated leverage ratio. The applicable margin for LIBOR rate loans was 1.20% and 1.375% at December 31, 2015 and 2014, respectively.

The Company will also pay a fee based on its consolidated leverage ratio on the actual daily unused amount of the aggregate revolving commitments (0.15% and 0.20% as of December 31, 2015 and 2014, respectively).

The borrowings under the credit agreement are not collateralized. 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. 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 credit agreement contains cross-defaults if the Company defaults on the master note purchase agreement or certain other debt. 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) (“leverage ratio”) 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 (“interest coverage ratio”). As of December 31, 2015 and 2014, the Company’s leverage ratio was 2.88x and 2.67x, respectively. As of December 31, 2015 and 2014, the Company’s interest coverage ratio was 7.88x and 7.94x, respectively.

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 Company redeemed 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 has the intent and ability to redeem the 2016 Notes on April 1, 2016 using borrowings under its credit agreement. The principal of each of the 2016 Notes, 2018 Notes and 2021 Notes is payable at the maturity of each respective note. The Company is amortizing the $1,489 debt issuance costs through the maturity dates of the respective notes.

Senior Notes due 2022 and 2025

On June 11, 2015, the Company entered into a third supplement to the master note purchase agreement with certain accredited institutional investors, pursuant to which, on August 20, 2015, the Company issued and sold to the investors in a private placement $500,000 of senior uncollateralized notes at fixed interest rates with interest payable in arrears semi-annually on February 20 and August 20 beginning on February 20, 2016. Of these notes, $125,000 will mature on August 20, 2022 with an annual interest rate of 3.09% (the “2022 Notes”) and $375,000 will mature on August 20, 2025 with an annual interest rate of 3.41% (the “2025 Notes”). The principal of each of the 2022 Notes and 2025 Notes is payable at the maturity of each respective note. The Company is amortizing the $3,746 debt issuance costs through the maturity dates of the respective notes.

The 2016 Notes, 2018 Notes, 2019 Notes, 2021 Notes, 2022 Notes and 2025 Notes (collectively, the “Senior Notes”) are uncollateralized obligations and rank equally in right of payment with each of the Senior Notes and the obligations under the Company’s credit 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, 2015 and 2014, the Company’s leverage ratio was 2.88x and 2.67x, respectively. As of December 31, 2015 and 2014, the Company’s interest coverage ratio was 7.88x and 7.94x, 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	2015	Bond	2015		2014		(Amount)
West Valley Bond	Variable	0.05%	August 1, 2018	$	15,500	$	15,500	$	15,678
LeMay Washington Bond	Variable	0.05	April 1, 2033		15,930		15,930		16,126
				$	31,430	$	31,430	$	31,804

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 credit agreement, to guarantee repayment of the bonds in this event. The Company classified these borrowings as long-term at December 31, 2015, because the borrowings were supported by standby letters of credit issued under the Company’s credit agreement.

As of December 31, 2015, aggregate contractual future principal payments by calendar year on long-term debt are due as follows:


2016 *	$	2,127
2017		1,069
2018		66,442
2019		175,955
2020		1,290,460
Thereafter		621,232
	$	2,157,285

______________________

* The Company has recorded the 2016 Notes in the 2020 category in the table above as the Company has the intent and ability to redeem the 2016 Notes on April 1, 2016 using borrowings under its credit agreement.