Note 7: Debt

Debt is summarized as follows:



	March 31	December 31	March 31
in thousands	2015	2014	2014
Long-term Debt
10.125% notes due 2015 1, 13	$ 150,728	$ 150,973	$ 151,674
6.50% notes due 2016 2, 11	126,725	126,969	127,678
6.40% notes due 2017 3, 11	218,592	218,589	218,578
7.00% notes due 2018 4	272,580	399,816	399,783
10.375% notes due 2018 5	249,080	249,030	248,888
7.50% notes due 2021 6	600,000	600,000	600,000
8.85% notes due 2021 7, 11	6,000	6,000	6,000
Industrial revenue bond due 2022 8, 11	14,000	14,000	14,000
4.50% notes due 2025 9	400,000	0	0
7.15% notes due 2037 10	239,573	239,570	239,564
Other notes 12	618	637	788
Total long-term debt including current maturities	$ 2,277,896	$ 2,005,584	$ 2,006,953
Less current maturities 13	365,441	150,137	171
Total long-term debt	$ 1,912,455	$ 1,855,447	$ 2,006,782
Estimated fair value of long-term debt	$ 2,160,255	$ 2,113,478	$ 2,313,964


1	Includes an increase for the unamortized deferred gain realized upon the August 2011 settlement of interest rate swaps, as follows: March 31, 2015 — $799 thousand, December 31, 2014 — $1,068 thousand and March 31, 2014 — $1,837 thousand. Additionally, includes decreases for unamortized discounts, as follows: March 31, 2015 — $71 thousand, December 31, 2014 — $95 thousand and March 31, 2014 — $163 thousand. The effective interest rate for these notes is 9.575%.
2	Includes an increase for the unamortized deferred gain realized upon the August 2011 settlement of interest rate swaps, as follows: March 31, 2015 — $1,724 thousand, December 31, 2014 — $1,968 thousand and March 31, 2014 — $2,677 thousand. The effective interest rate for these notes is 6.00%.
3	Includes decreases for unamortized discounts, as follows: March 31, 2015 — $41 thousand, December 31, 2014 — $44 thousand and March 31, 2014 — $55 thousand. The effective interest rate for these notes is 7.39%.
4	Includes decreases for unamortized discounts, as follows: March 31, 2015 — $117 thousand, December 31, 2014 — $184 thousand and March 31, 2014 — $217 thousand. The effective interest rate for these notes is 7.87%.
5	Includes decreases for unamortized discounts, as follows: March 31, 2015 — $920 thousand, December 31, 2014 — $970 thousand and March 31, 2014 — $1,112 thousand. The effective interest rate for these notes is 10.625%.
6	The effective interest rate for these notes is 7.75%.
7	The effective interest rate for these notes is 8.88%.
8	This variable-rate tax-exempt bond is backed by a letter of credit.
9	The effective interest rate for these notes is 4.65%.
10	Includes decreases for unamortized discounts, as follows: March 31, 2015 — $615 thousand, December 31, 2014 — $618 thousand and March 31, 2014 — $624 thousand. The effective interest rate for these notes is 8.05%.
11	As of March 31, 2015, we had initiated prepayment, or announced our intent to prepay; as such, this debt is classified as current maturities of long-term debt.
12	Non-publicly traded debt.
13	The 10.125% notes due 2015 are classified as long-term debt (not current maturities) as of March 31, 2015 due to our intent and ability to refinance these notes at maturity using our line of credit.

Our long-term debt is presented in the table above net of unamortized discounts from par and unamortized deferred gains realized upon settlement of interest rate swaps. Discounts and deferred gains are being amortized using the effective interest method over the respective terms of the notes.

The estimated fair value of debt presented in the table above was determined by averaging several asking price quotes for the publicly traded notes and assuming par value for the remainder of the debt. The fair value estimates for the publicly traded notes were based on Level 2 information (as defined in Note 5) as of the balance sheet dates.

Our debt, other than the line of credit, is unsecured. Essentially all such debt agreements contain customary investment-grade type covenants that primarily limit the amount of secured debt we may incur without ratably securing such debt. Such debt may be redeemed prior to maturity at the greater of par value and the make-whole value plus accrued and unpaid interest.

In March 2015, we issued $400,000,000 of 4.50% senior notes due 2025. Proceeds (net of underwriter fees and other transaction costs) of $395,207,000 were partially used to fund the March 30, 2015 purchase, via tender offer, of $127,303,000 principal amount of the 7.00% notes due 2018 (and the subsequent purchase of $185,000 in April 2015). The March 2015 debt purchase cost $145,899,000, including an $18,140,000 premium above the principal amount of the notes and transaction costs of $456,000. The premium primarily reflects the trading price of the notes relative to par prior to the tender offer commencement. Additionally, we recognized $3,138,000 of non-cash cost associated with the acceleration of a proportional amount of unamortized discounts, deferred financing costs and amounts accumulated in OCI. The combined charge of $21,734,000 is presented in the accompanying Condensed Consolidated Statement of Comprehensive Income as a component of interest expense for the three month period ended March 31, 2015.

The remaining net proceeds from the March 2015 debt issuance, together with cash on hand and borrowings under our line of credit, will fund: (1) the April 9, 2015 redemption of our 6.40% notes due 2017, (2) the April 16, 2015 redemption of our 6.50% notes due 2016, (3) the expected redemption of our 8.85% notes due 2021 and (4) the expected prepayment of our industrial revenue bond due 2022. All debt as of March 31, 2015 which we intend to prepay, as described above, is classified in the accompanying Condensed Consolidated Balance Sheet as current maturities of long-term debt. See Note 18 for a discussion of our subsequent debt redemptions.

In March 2014, we purchased $506,366,000 principal amount of debt through a tender offer as follows: $374,999,000 of 6.50% notes due in 2016 and $131,367,000 of 6.40% notes due in 2017. This debt purchase was funded by the sale of our cement and concrete businesses in the Florida area as described in Note 16. The March 2014 debt purchases cost $579,659,000, including a $71,829,000 premium above the principal amount of the notes and transaction costs of $1,464,000. The premium primarily reflects the trading prices of the notes relative to par prior to the tender offer commencement. Additionally, we recognized a net benefit of $344,000 associated with the acceleration of a proportional amount of unamortized discounts, deferred gains, deferred financing costs and amounts accumulated in OCI. The combined charge of $72,949,000 is presented in the accompanying Condensed Consolidated Statement of Comprehensive Income as a component of interest expense for the three month period ended March 31, 2014.

Our $500,000,000 line of credit is secured by accounts receivable and inventory, but will become unsecured upon the achievement of certain credit metrics and/or credit ratings. In May 2015, we expect to close on a new line of credit that will, among other things, increase the amount to $750,000,000 and extend the term from March 2019 to May 2020. The line of credit also contains affirmative, negative and financial covenants customary for a secured facility.

The negative covenants primarily limit our ability to: (1) incur secured debt, (2) make certain investments, (3) execute acquisitions and divestitures, and (4) make restricted payments, including dividends. Such limitations currently do not impact our ability to execute our strategic, operating, and financial plans, and become less restrictive when the line of credit becomes unsecured as described above.

The line of credit contains two financial covenants: (1) a maximum ratio of debt to EBITDA that declines over time to 3.5:1 and (2) a minimum ratio of EBITDA to net cash interest expense that increases over time to 3.0:1.

As of March 31, 2015, we were in compliance with all of our notes and line of credit covenants.

As of March 31, 2015, our line of credit available borrowing capacity was $446,528,000. Borrowings under the line of credit bear interest at a rate determined at the time of borrowing equal to LIBOR plus a margin ranging from 1.50% to 2.25%, or an alternative rate derived from the lender’s prime rate, based on our ratio of debt to EBITDA. As of March 31, 2015, the applicable margin for LIBOR based borrowing was 1.50%.

Standby letters of credit issued under the line of credit reduce availability and are charged a fee equal to the margin for LIBOR based borrowings plus 0.175%. We also pay a commitment fee on the daily average unused amount of the line of credit. This commitment fee ranges from 0.25% to 0.40% based on our ratio of debt to EBITDA. As of March 31, 2015, the commitment fee was 0.25%. Once the line of credit becomes unsecured, both the LIBOR margin range for borrowings and the commitment fee range will decline.