|12 Months Ended|
Dec. 31, 2017
|Debt Disclosure [Abstract]|
We have a loan agreement with a group of banks to provide working capital support, letters of credit and finance acquisitions. The loan agreement, which expires in January 2020, is comprised of a term loan facility and a revolving loan facility. The revolving loan facility provides for revolving loans and letters of credit.
The maximum amount of credit available to us under the loan agreement for revolving loans and letters of credit as of December 31, 2017 was $150 million. We may borrow and repay the revolving loan borrowings as our cash flows require or permit. We pay an unused commitment fee and fees on letters of credit that are issued. We had approximately $79.3 million in revolving loan amounts outstanding and no letters of credit outstanding as of December 31, 2017. We had approximately $100 million in revolving loan amounts outstanding and no of letters of credit outstanding as of December 31, 2016.
Under the loan agreement we may elect to increase the maximum availability of the term loan facility, the revolving loan facility, or both facilities up to an aggregate additional amount of $75 million.
Total bank loan borrowed funds outstanding including term loan borrowings and revolving loan borrowings were approximately $173.7 million and $216.3 million as of December 31, 2017 and 2016, respectively. These amounts exclude unamortized deferred financing costs of approximately $1.1 million and $1.7 million as of December 31, 2017 and 2016, respectively. The fair value of outstanding debt under our bank loan facilities as of December 31, 2017 approximates its carrying value using Level 2 inputs based on market data on companies with a corporate rating similar to ours that have recently priced credit facilities.
We pay interest on the term loan borrowings and revolving loan borrowings at LIBOR plus a base margin or at a base rate (typically the prime rate) plus a base margin. As of December 31, 2017, the LIBOR base margin was 2.00% and the base rate base margin was 0.75%. The base margins increase or decrease in increments as our Total Funded Debt/EBITDA Ratio increases or decreases.
The loan agreement requires us to have interest rate hedges on a portion of the outstanding term loan for the first three years of the agreement. We executed interest rate swap agreements in February 2015 that complied with these terms. The amount of swapped debt outstanding as of December 31, 2017 was $85 million.
After taking into account the impact of hedging instruments, as of December 31, 2017, interest rates on portions of our outstanding debt ranged from 3.25% to 5.25%, and the effective interest rate on our aggregate outstanding debt was 3.66%.
Interest expense incurred on bank loan borrowings and interest rate hedges was approximately $7.2 million, $7.8 million and $7.3 million during the years ended December 31, 2017, 2016 and 2015, respectively.
The loan agreement contains collateral requirements to secure our loan agreement obligations, restrictive covenants, a limit on annual dividends, and other affirmative and negative covenants, conditions and limitations. Restrictive covenants include a maximum Total Funded Debt/EBITDA Ratio, which decreases over time, and a minimum Fixed Charge Coverage Ratio. We were in compliance with required ratios and other terms and conditions as of December 31, 2017.
In January 2018, we amended the loan agreement to extend our payment terms, increase the borrowing commitments available to us, and increase the bank group from six banks to nine banks. The termination date of the loan agreement after the amendment is January 2023 and the amount of our term loan borrowings outstanding after the January amendment is $100 million. After the amendment, our scheduled term loan payments are approximately $7.5 million in 2018, $10.0 million in 2019, $11.9 million in 2020, $14.4 million in 2021, $15.0 million in 2022 and $41.2 million in 2023. We classified our current portion of long-term debt in our consolidated balance sheets as of December 31, 2017, based on these amended terms.
The maximum amount of credit available to us for revolving loans and letters of credit after the amendment is $300 million. Under the loan agreement we may elect to increase the maximum availability of the term loan facility, the revolving loan facility, or a combination of both facilities. The aggregate limit of incremental increases is $100 million after the amendment.
We pay interest on the term loan borrowings and revolving loan borrowings at LIBOR plus a base margin or at a base rate (typically the prime rate) plus a base margin. After the amendment the LIBOR base margin is 1.75% and the base rate base margin is 0.50%.
The loan agreement requires us to have interest rate hedges on a portion of the outstanding term loan for the first three years of the agreement and for the first three years after the amendment. We executed an interest rate hedge in February 2018 that extended our compliance with this requirement for an additional three years.
After the amendment, the maximum Total Funded Debt/EBITDA Ratio was fixed at 3.0 to 1, with a provision to increase the maximum ratio in the event of a material acquisition.
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
Reference 1: http://www.xbrl.org/2003/role/presentationRef