Financing

9 Months Ended

Sep. 30, 2019

NOTE 4 – FINANCING

The following table identifies the amounts included in “Long-term debt” on the accompanying Condensed Consolidated Balance Sheets as of September 30, 2019, and December 31, 2018 (in thousands):



									September 30, 2019		December 31, 2018
Revolving Credit Facility, weighted-average variable interest rate of							2.942%		$	75,000	$	287,000
$	500	million,	4.875	%	Senior Notes due 2021,	effective interest rate of 4.950%		⁽¹⁾	498,977		498,371
$	300	million,	4.625	%	Senior Notes due 2021,	effective interest rate of 4.644%		⁽²⁾	299,456		299,244
$	300	million,	3.800	%	Senior Notes due 2022,	effective interest rate of 3.845%		⁽³⁾	298,852		298,574
$	300	million,	3.850	%	Senior Notes due 2023,	effective interest rate of 3.851%		⁽⁴⁾	299,005		298,821
$	500	million,	3.550	%	Senior Notes due 2026,	effective interest rate of 3.570%		⁽⁵⁾	496,587		496,240
$	750	million,	3.600	%	Senior Notes due 2027,	effective interest rate of 3.619%		⁽⁶⁾	744,327		743,868
$	500	million,	4.350	%	Senior Notes due 2028,	effective interest rate of 4.383%		⁽⁷⁾	495,332		495,004
$	500	million,	3.900	%	Senior Notes due 2029,	effective interest rate of 3.901%		⁽⁸⁾	496,092		—
Long-term debt									$	3,703,628	$	3,417,122


⁽¹⁾	Net of unamortized discount of $0.5 million as of September 30, 2019, and $0.7 million as of December 31, 2018, and debt issuance costs of $0.6 million as of September 30, 2019, and $0.9 million as of December 31, 2018.


⁽²⁾	Net of unamortized discount of $0.1 million as of September 30, 2019, and December 31, 2018, and debt issuance costs of $0.4 million as of September 30, 2019, and $0.6 million as of December 31, 2018.


⁽³⁾	Net of unamortized discount of $0.4 million as of September 30, 2019, and $0.5 million as of December 31, 2018, and debt issuance costs of $0.8 million as of September 30, 2019, and $1.0 million as of December 31, 2018.


⁽⁴⁾	Net of unamortized discount of less than $0.1 million as of September 30, 2019, and December 31, 2018, and debt issuance costs of $1.0 million as of September 30, 2019, and $1.2 million as of December 31, 2018.


⁽⁵⁾	Net of unamortized discount of $0.6 million as of September 30, 2019, and December 31, 2018, and debt issuance costs of $2.8 million as of September 30, 2019, and $3.1 million as of December 31, 2018.


⁽⁶⁾	Net of unamortized discount of $1.0 million as of September 30, 2019, and $1.1 million as of December 31, 2018, and debt issuance costs of $4.7 million as of September 30, 2019 and $5.1 million as of December 31, 2018.


⁽⁷⁾	Net of unamortized discount of $1.2 million as of September 30, 2019, and $1.3 million as of December 31, 2018, and debt issuance costs of $3.5 million as of September 30, 2019, and $3.7 million as of December 31, 2018.


⁽⁸⁾	Net of unamortized discount of less than $0.1 million as of September 30, 2019, and debt issuance costs of $3.9 million as of September 30, 2019.

Unsecured revolving credit facility:

On April 5, 2017, the Company entered into a credit agreement (the “Credit Agreement”). The Credit Agreement provides for a $1.2 billion unsecured revolving credit facility (the “Revolving Credit Facility”) arranged by JPMorgan Chase Bank, N.A., which is scheduled to mature in April 2022. 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 $600 million, provided that the aggregate amount of the commitments does not exceed $1.8 billion at any time.

As of September 30, 2019, and December 31, 2018, 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 $39.1 million and $35.1 million, respectively, reducing the aggregate availability under the Credit Agreement by those amounts.

Borrowings under the 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 Credit Agreement) plus an applicable margin. Swing line loans made under the 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 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 September 30, 2019, based upon the Company’s current credit ratings, its margin for Alternate Base Rate loans was 0.000%, its margin for Eurodollar Revolving Loans was 0.900% and its facility fee was 0.100%.

The 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 to fixed charges. 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 (subject to customary grace periods, cure rights and materiality thresholds) contained in 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 September 30, 2019, the Company remained in compliance with all covenants under the Credit Agreement.

Senior notes:

On May 20, 2019, the Company issued $500 million aggregate principal amount of unsecured 3.900% Senior Notes due 2029 (“3.900% Senior Notes due 2029”) at a price to the public of 99.991% of their face value with U.S. Bank National Association (“U.S. Bank”) as trustee. Interest on the 3.900% Senior Notes due 2029 is payable on June 1 and December 1 of each year, beginning on December 1, 2019, and is computed on the basis of a 360-day year.

The Company has issued a cumulative $3.7 billion aggregate principal amount of unsecured senior notes, which are due between 2021 and 2029, with UMB Bank, N.A. and U.S. Bank as trustees. 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. None of the Company’s subsidiaries is a guarantor under the senior notes. Each of the senior notes is subject to certain customary covenants, with which the Company complied as of September 30, 2019.