Long-term Debt and Derivatives

6 Months Ended

Jun. 30, 2012

Long-term Debt and Derivatives

Long-term Debt and Derivatives

7.  Long-term Debt and Derivatives

Long-term debt, net of current maturities, is as follows:

	June 30,			December 31,
	2012			2011
	(in thousands)
Senior secured credit facility	$	1,776,500		$	1,715,750
$325 million 8 ¾% senior subordinated notes due August 2019	325,000			325,000
Other long-term obligations	—			1,949
Capital leases	2,161			2,215
	2,103,661			2,044,914
Less current maturities of long-term debt	(42,600		)	(44,559		)
Less discount on senior secured credit facility Term Loan B	(1,628		)	(1,749		)
	$	2,059,433		$	1,998,606

The following is a schedule of future minimum repayments of long-term debt as of June 30, 2012 (in thousands):

Within one year	$	42,600
1-3 years	137,695
3-5 years	891,728
Over 5 years	1,031,638
Total minimum payments	$	2,103,661

Senior Secured Credit Facility

The Company’s senior secured credit facility had a gross outstanding balance of $1,776.5 million at June 30, 2012, consisting of $369.0 million drawn under the revolving credit facility, a $665.0 million Term Loan A facility, and a $742.5 million Term Loan B facility. Additionally, at June 30, 2012, the Company was contingently obligated under letters of credit issued pursuant to the senior secured credit facility with face amounts aggregating $23.9 million, resulting in $307.1 million of available borrowing capacity as of June 30, 2012 under the revolving credit facility.

Covenants

The Company’s senior secured credit facility and $325 million 83/4% senior subordinated notes require it, among other obligations, to maintain specified financial ratios and to satisfy certain financial tests, including fixed charge coverage, interest coverage, senior leverage and total leverage ratios. In addition, the Company’s senior secured credit facility and $325 million 83/4% senior subordinated notes restrict, among other things, the Company’s ability to incur additional indebtedness, incur guarantee obligations, amend debt instruments, pay dividends, create liens on assets, make investments, engage in mergers or consolidations, and otherwise restrict corporate activities.

At June 30, 2012, the Company was in compliance with all required financial covenants.

Interest Rate Swap Contracts

There were no outstanding interest rate swap contracts as of June 30, 2012 and December 31, 2011. The effect of derivative instruments on the condensed consolidated statement of income for the three months ended June 30, 2011 was as follows (in thousands):

	Gain (Loss)			Location of Gain (Loss)	Gain (Loss)
	Recognized in			Reclassified from	Reclassified from			Location of Gain (Loss)	Gain (Loss)
Derivatives in a	OCI on Derivative			AOCI into Income	AOCI into Income			Recognized in Income on	Recognized in Income on
Cash Flow Hedging Relationship	(Effective Portion)			(Effective Portion)	(Effective Portion)			Derivative (Ineffective Portion)	Derivative (Ineffective Portion)
Interest rate swap contracts	$	(332	)	Interest expense	$	(3,625	)	None	$	—
Total	$	(332	)		$	(3,625	)		$	—

	Location of Gain (Loss)
Derivatives Not Designated as	Recognized in Income	Gain (Loss) Recognized
Hedging Instruments	on Derivative	in Income on Derivative
Interest rate swap contracts	Interest expense	$	(1	)
Total		$	(1	)

The effect of derivative instruments on the condensed consolidated statement of income for the six months ended June 30, 2011 was as ollows (in thousands):

	Gain (Loss)			Location of Gain (Loss)	Gain (Loss)
	Recognized in			Reclassified from	Reclassified from			Location of Gain (Loss)	Gain (Loss)
Derivatives in a	OCI on Derivative			AOCI into Income	AOCI into Income			Recognized in Income on	Recognized in Income on
Cash Flow Hedging Relationship	(Effective Portion)			(Effective Portion)	(Effective Portion)			Derivative (Ineffective Portion)	Derivative (Ineffective Portion)
Interest rate swap contracts	$	(672	)	Interest expense	$	(8,173	)	None	$	—
Total	$	(672	)		$	(8,173	)		$	—

	Location of Gain (Loss)
Derivatives Not Designated as	Recognized in Income	Gain (Loss) Recognized
Hedging Instruments	on Derivative	in Income on Derivative
Interest rate swap contracts	Interest expense	$	(4	)
Total		$	(4	)

In addition, during the three and six months ended June 30, 2011, the Company amortized to interest expense $0.6 million and $2.5 million, respectively, in OCI related to the derivatives that were de-designated as hedging instruments under ASC 815, “Derivatives and Hedging.”