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Long-Term Debt | 9 Months Ended
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Sep. 30, 2014
Debt Disclosure [Abstract] |
Long-Term Debt | NOTE 7· Long-Term Debt Long-term debt at September 30, 2014 and December 31, 2013 consisted of the following:
(in thousands) |  | 2014 |  |  | 2013 |
Current portion of long-term debt: |  |  |  |  |  |  |  |
Current portion of 5-year term loan facility expires 2019 |  | $ | 13,750 |  |  | $ | — |
6.080% senior notes, semi-annual interest payments, balloon due 2014 |  |  | — |  |  |  | 100,000 |
5.370% senior notes, quarterly interest payments, balloon due 2015 |  |  | 25,000 |  |  |  | — |
Total current portion of short-term debt |  | $ | 38,750 |  |  | $ | 100,000 |
Long-term debt: |  |  |  |  |  |  |  |
Note agreements: |  |  |  |  |  |  |  |
5.370% senior notes, quarterly interest payments, balloon due 2015 |  | $ | — |  |  | $ | 25,000 |
5.660% senior notes, semi-annual interest payments, balloon due 2016 |  |  | 25,000 |  |  |  | 25,000 |
4.500% senior notes, quarterly interest payments, balloon due 2018 |  |  | 100,000 |  |  |  | 100,000 |
4.200% senior notes, semi-annual interest payments, balloon due 2024 |  |  | 498,432 |  |  |  | — |
Total notes |  | $ | 623,432 |  |  | $ | 150,000 |
Credit agreements: |  |  |  |  |  |  |  |
Periodic payments of interest, LIBOR plus 1.00%, expires December 31, 2016 |  | $ | — |  |  | $ | 100,000 |
Quarterly payments of interest, LIBOR plus 1.00%, expires December 31, 2016 |  |  | — |  |  |  | 100,000 |
Periodic payments of interest, LIBOR plus 1.00%, expires December 31, 2016 |  |  | — |  |  |  | 30,000 |
5-year term-loan facility, periodic interest and principal payments, currently LIBOR plus 1.375%, expires May 20, 2019 |  |  | 536,250 |  |  |  | — |
5-year revolving-loan facility, periodic interest payments, currently LIBOR plus 1.175%, plus commitment fees of 0.20%, expires May 20, 2019 |  |  | — |  |  |  | — |
Revolving credit loan, quarterly interest payments, LIBOR plus up to 1.40% and availability fee up to 0.25%, expires December 31, 2016 |  |  | — |  |  |  | — |
Total credit agreements |  | $ | 536,250 |  |  | $ | 230,000 |
Total long-term debt |  | $ | 1,159,682 |  |  | $ | 380,000 |
Current portion of short-term debt |  | $ | 38,750 |  |  | $ | 100,000 |
Total debt |  | $ | 1,198,432 |  |  | $ | 480,000 |
In July 2004, the Company completed a private placement of $200.0 million of unsecured senior notes (the “Notes”). The $200.0 million was divided into two series: (1) Series A, which closed on September 15, 2004, for $100.0 million due in 2011 and bore interest at 5.57% per year; and (2) Series B, which closed on July 15, 2004, for $100.0 million due in 2014 and bore interest at 6.08% per year. On September 15, 2011, the $100.0 million of Series A Notes were redeemed on their normal maturity date through use of funds from the Master Agreement (defined below). As of July 15, 2014 Series B notes were redeemed at maturity using proceeds from the Credit Facility (defined below). On January 9, 2012, the Company entered into: (1) an amended and restated revolving and term loan credit agreement (the “SunTrust Agreement”) with SunTrust Bank (“SunTrust”) that provided for (a) a $100.0 million term loan (the “SunTrust Term Loan”) and (b) a $50.0 million revolving line of credit (the “SunTrust Revolver”) and (2) a $50.0 million promissory note. The maturity date for the SunTrust Term Loan and the SunTrust Revolver was December 31, 2016, at which time all outstanding principal and unpaid interest would have been due. On May 20, 2014, in connection with closing the Wright acquisition and funding of the Credit Facility (as defined below), the SunTrust Term Loan was paid in full using proceeds from the Credit Facility and the SunTrust Revolver was also terminated at that time. On January 26, 2012, the Company entered into a term loan agreement (the “JPM Agreement”) with JPMorgan that provided for a $100.0 million term loan (the “JPM Term Loan”). The JPM Term Loan was fully funded on January 26, 2012, and provided the financing to fully repay (1) the JPM Bridge Facility and (2) the SunTrust Revolver. As a result of the January 26, 2012 financing and repayments, the JPM Bridge Facility was terminated and the SunTrust Revolver’s amount outstanding was reduced to zero. The maturity date for the JPM Term Loan was December 31, 2016, at which time all outstanding principal and unpaid interest would have been due. On May 20, 2014, in connection with closing the Wright acquisition and funding of the Credit Facility (as defined below), the JPM Term Loan was paid in full and terminated using proceeds from the Credit Facility. On July 1, 2013, in conjunction with the acquisition of Beecher Carlson Holdings, Inc., the Company entered into: (1) a revolving loan agreement (the “Wells Fargo Agreement”) with Wells Fargo Bank, N.A. that provided for a $50.0 million revolving line of credit (the “Wells Fargo Revolver”) and (2) a term loan agreement (the “Bank of America Agreement”) with Bank of America, N.A. (“Bank of America”) that provided for a $30.0 million term loan (the “Bank of America Term Loan”). The maturity date for the Wells Fargo Revolver is December 31, 2016, at which time all outstanding principal and unpaid interest will be due. The Wells Fargo Revolver may be increased by up to $50.0 million (bringing the total amount available to $100.0 million). The calculation of interest and fees for the Wells Fargo Agreement is generally based on the Company’s funded debt-to-EBITDA ratio. Interest is charged at a rate equal to 1.00% to 1.40% above LIBOR or 1.00% below the Base Rate, each as more fully described in the Wells Fargo Agreement. Fees include an up-front fee, an availability fee of 0.175% to 0.25%, and a letter of credit margin fee of 1.00% to 1.40%. The obligations under the Wells Fargo Revolver are unsecured and the Wells Fargo Agreement includes various covenants, limitations and events of default that are customary for similar facilities for similar borrowers. As of April 16, 2014, in connection with the signing of the Credit Facility an amendment to the agreement was established to reduce the total revolving loan commitment from $50.0 million to $25.0 million. There were no borrowings against the Wells Fargo Revolver as of September 30, 2014 and December 31, 2013. The maturity date for the Bank of America Term Loan was December 31, 2016, at which time all outstanding principal and unpaid interest would have been due. The Bank of America Term Loan was funded in the amount of $30.0 million on July 1, 2013. On May 20, 2014, in connection with closing the Wright acquisition and funding of the Credit Facility, the term loan was paid in full using proceeds from the Credit Facility (as defined below). The 30-day Adjusted LIBOR Rate as of September 30, 2014 was 0.19%. On April 17, 2014, the Company entered into a credit agreement with JPMorgan Chase Bank, N.A. as administrative agent and certain other banks as co-syndication agents and co-documentation agents (the “Credit Agreement”). The Credit Agreement in the amount of $1,350.0 million provides for an unsecured revolving credit facility (the “Credit Facility”) in the initial amount of $800.0 million and unsecured term loans in the initial amount of $550.0 million, either or both of which may, subject to lenders’ discretion, potentially be increased by up to $500.0 million. The Credit Facility was funded on May 20, 2014 in conjunction with the closing of the Wright acquisition, with the $550.0 million term loan being funded as well as a drawdown of $375.0 million on the revolving loan facility. Use of these proceeds were to retire existing term loan debt including the JPM Term Loan Agreement, SunTrust Term Loan Agreement and Bank of America Term Loan Agreement in total of $230.0 million (as described above) and to facilitate the closing of the Wright acquisition as well as other acquisitions. The Credit Facility terminates on May 20, 2019, but either or both of the revolving credit facility and the term loans may be extended for two additional one-year periods at the Company’s request and at the discretion of the respective lenders. Interest and facility fees in respect to the Credit Facility are based on the better of the Company’s net debt leverage ratio or a non-credit enhanced senior unsecured long-term debt rating. Based on the Company’s net debt leverage ratio, the rates of interest for the first two quarters charged on the term loan and revolving loan is 1.375% and 1.175% respectively and above the adjusted LIBOR rate for outstanding amounts drawn. There are fees included in the facility which include a facility fee based on the revolving credit commitments of the lenders (whether used or unused) at a rate of 0.20% and letter of credit fees based on the amounts of outstanding secured or unsecured letters of credit. The Credit Facility includes various covenants, limitations and events of default customary for similar facilities for similarly rated borrowers. As of September 30, 2014, there was an outstanding debt balance issued under the provisions of the Credit Facility in total of $550.0 million with no proceeds outstanding relative to the revolving loan. On September 18, 2014 the Company issued $500.0 million of 4.200% unsecured senior notes due 2024. The senior notes were given investment grade ratings of BBB-/Baa3 with a stable outlook. The notes are subject to certain covenant restrictions and regulations which are customary for credit rated obligations. At the time of funding, the proceeds were offered at a discount of the original note amount which also excluded an underwriting fee discount. The net proceeds received from the issuance were used to repay the outstanding balance of $475.0 million on the revolving Credit Facility and other general corporate purposes. The Notes, the Master Agreement and the Credit Agreement all require the Company to maintain certain financial ratios and comply with certain other covenants. The Company was in compliance with all such covenants as of September 30, 2014 and December 31, 2013. NOTE 8· Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities
|  | For the nine months ended September 30, |
(in thousands) |  | 2014 |  |  | 2013 |
Cash paid during the period for: |  |  |  |  |  |  |  |
Interest |  | $ | 19,940 |  |  | $ | 13,223 |
Income taxes |  | $ | 92,018 |  |  | $ | 81,156 |
Brown & Brown’s significant non-cash investing and financing activities are summarized as follows:
|  | For the nine months ended September 30, |
(in thousands) |  | 2014 |  |  | 2013 |
Other payable issued for purchased customer accounts |  | $ | 1,623 |  |  | $ | 503 |
Estimated acquisition earn-out payables and related charges |  | $ | 12,937 |  |  | $ | 2,064 |
Notes received on the sale of fixed assets and customer accounts |  | $ | 296 |  |  | $ | 1,107 |

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- Definition 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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