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LONG-TERM DEBT AND CREDIT FACILITIES | 9 Months Ended
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Feb. 29, 2016
Debt Disclosure [Abstract] |
LONG-TERM DEBT AND CREDIT FACILITIES | LONG-TERM DEBT AND CREDIT FACILITIES As of February 29, 2016 and May 31, 2015, long-term debt consisted of the following (in thousands):
| February 29, 2016 |  | May 31, 2015
Term loan: |  |  |
$1,750,000 face amount (less unamortized debt issuance costs of $4,423) at February 29, 2016, and $1,234,375 face amount (less unamortized debt issuance costs of $2,433) at May 31, 2015 | $ | 1,745,577 |  |  | $ | 1,231,942 |
Revolving credit facility | 128,500 |  |  | 508,125 |
Total long-term debt | 1,874,077 |  |  | 1,740,067 |
Less current portion of long-term debt ($87,500 face amount less unamortized debt issuance cost of $1,098 at February 29, 2016, and $62,500 face amount less unamortized debt issuance costs of $716 at May 31, 2015) | 86,402 |  |  | 61,784 |
Long-term debt, excluding current portion | $ | 1,787,675 |  |  | $ | 1,678,283 |
Maturity requirements on long-term debt as of February 29, 2016 by fiscal year are as follows (in thousands):
2016 | $ | — |
2017 | 131,250 |
2018 | 175,000 |
2019 | 175,000 |
2020 and thereafter | 1,397,250 |
Total | $ | 1,878,500 |
July 2015 Refinancing On July 31, 2015, we entered into a second amended and restated term loan agreement (the "2015 Term Loan Agreement") and a second amended and restated credit agreement (the “2015 Revolving Credit Facility Agreement” and collectively, the “2015 Credit Facility Agreements”) to provide for a $1.75 billion term loan (the "Term A Loan") and a $1.25 billion revolving credit facility (the "Revolving Credit Facility"), each with a syndicate of financial institutions. We used the proceeds of approximately $2.0 billion to repay the then-outstanding balances on our previously existing term loan and revolving credit facility together with accrued interest and fees on each. We incurred fees and expenses associated with the 2015 Credit Facility Agreements of approximately $4.9 million. The portion of the debt issuance costs related to the 2015 Revolving Credit Facility Agreement are included in other noncurrent assets, and the portion of the debt issuance costs related to the 2015 Term Loan Agreement are reported as a reduction to the carrying amount of the debt at February 29, 2016. Debt issuance costs are amortized as an adjustment to interest expense over the terms of the respective facilities. February 2016 Refinancing Concurrently with the signing of the Merger Agreement, we entered into a debt commitment letter, which was amended and restated on January 8, 2016, for secured financing of up to $4.78 billion. On February 26, 2016, as contemplated by the debt commitment letter, we entered into an amendment to the 2015 Credit Facility Agreements (as amended, the "2016 Credit Facility Agreement") to, among other things, (i) accelerate our repayment schedule for the Term A Loan effective as of February 26, 2016, and (ii) subject to the closing of the acquisition of Heartland, provide security for the Term A Loan and the Revolving Credit Facility and modify the applicable financial covenants and interest rate margins. In addition, the 2016 Credit Facility Agreement provides for a new $685 million delayed draw term loan facility (the "Delayed Draw Facility") and allows for the addition of approximately $1.095 billion of term B loans (the "Term B Loans") to be issued in connection with the proposed acquisition of Heartland, resulting in total financing of approximately $4.78 billion as contemplated by the debt commitment letter. On March 29, 2016, we entered into a Lender Joinder Agreement to the 2016 Credit Facility Agreement (the "Lender Joinder Agreement"). The Lender Joinder Agreement increases the amount of commitments for the Delayed Draw Facility from $685 million to $735 million through the addition of a new member to the syndicate. If drawn at the closing of the Heartland acquisition, this will result in a corresponding decrease in the anticipated initial aggregate principal balance of the Term B Loans from $1.095 billion to $1.045 billion. The funding commitments for the Delayed Draw Facility and the Term B Loans remain subject to the satisfaction of customary closing conditions. The 2016 Credit Facility Agreement provides for an interest rate, at our election, of either London Interbank Offered Rate ("LIBOR") or a base rate, in each case plus a leverage-based margin. As of February 29, 2016, the interest rates on the Term A Loan and the Revolving Credit Facility were 1.94% and 1.90%, respectively. Pursuant to the 2016 Credit Facility Agreement, the Term A Loan must be repaid in equal quarterly installments of $43.8 million commencing in November 2016 and ending in May 2020, with the remaining principal balance due upon maturity in July 2020. The Delayed Draw Facility and the Revolving Credit Facility also mature and expire, respectively, in July 2020. As of February 29, 2016, the outstanding balance on the Revolving Credit Facility was $128.5 million. The 2016 Credit Facility Agreement allows us to issue standby letters of credit of up to $100 million in the aggregate under the Revolving Credit Facility. Outstanding letters of credit under the Revolving Credit Facility reduce the amount of borrowings available to us. Borrowings available to us under the Revolving Credit Facility are further limited by the covenants described below under "Compliance with Covenants." At February 29, 2016, we had outstanding issued standby letters of credit of $9.2 million under the Revolving Credit Facility. The total available commitments under the Revolving Credit Facility at February 29, 2016 was $488.2 million. We are required to pay a quarterly commitment fee on the unused portion of the Revolving Credit Facility. The 2016 Credit Facility Agreement contains customary affirmative and restrictive covenants, including, among others, financial covenants based on our leverage and fixed charge coverage ratios. See "Compliance with Covenants" below. The 2016 Credit Facility Agreement includes customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations to be immediately due and payable. Lines of Credit We have lines of credit with banks in the United States and Canada as well as several countries in Europe and in the Asia-Pacific region where we do business. The lines of credit, which are restricted for use in funding settlement, generally have variable interest rates and are subject to annual review. The credit facilities are generally denominated in local currency but may, in some cases, facilitate borrowings in multiple currencies. For certain of our lines of credit, the line of credit balance is reduced by the amount of cash we have on deposit in specific accounts with the lender when determining the available credit. Accordingly, the amount of the outstanding line of credit may exceed the stated credit limit, while the net position is less than the credit limit. As of February 29, 2016 and May 31, 2015, a total of $69.5 million and $193.2 million, respectively, of cash on deposit was used to determine the available credit. As of February 29, 2016 and May 31, 2015, respectively, we had $189.9 million and $592.6 million outstanding under these lines of credit with additional capacity of $1,119.7 million as of February 29, 2016 to fund settlement. The weighted-average interest rate on these borrowings was 1.67% and 1.50% at February 29, 2016 and May 31, 2015, respectively. Compliance with Covenants The 2016 Credit Facility Agreement includes financial covenants requiring (i) a leverage ratio no greater than 3.50 to 1.00, or up to 3.75 to 1.00 if we were to complete an acquisition, subject to certain conditions, and (ii) a fixed charge coverage ratio no less than 2.50 to 1.00. The financial covenants under the 2016 Credit Facility Agreement are subject to change upon the closing of the acquisition of Heartland. The 2016 Credit Facility Agreement and lines of credit also include various other covenants that are customary in such borrowings. We were in compliance with all applicable covenants as of and for the nine months ended February 29, 2016. Interest Rate Swap Agreements We have interest rate swap agreements with financial institutions to hedge changes in cash flows attributable to interest rate risk on a portion of our variable-rate debt instruments. A $500 million notional interest rate swap agreement, which became effective on October 31, 2014, effectively converted $500 million of our variable-rate debt to a fixed rate of 1.52% plus a leverage-based margin and will mature on February 28, 2019. A $250 million notional interest rate swap, which became effective on August 28, 2015, effectively converted $250 million of our variable-rate debt to a fixed rate of 1.34% plus a leverage-based margin and will mature on July 31, 2020. Net amounts to be received or paid under the swap agreements are reflected as adjustments to interest expense. Since we have designated the interest rate swap agreements as cash flow hedges, unrealized gains or losses resulting from adjusting the swaps to fair value are recorded as components of other comprehensive income, except for any ineffective portion of the change in fair value, which would be immediately recorded in interest expense. During the three and nine months ended February 29, 2016, there was no ineffectiveness. The fair values of the interest rate swaps were determined based on the present value of the estimated future net cash flows using implied rates in the applicable yield curve as of the valuation date. These derivative instruments were classified within Level 2 of the valuation hierarchy. The table below presents the fair values of our derivative financial instruments designated as cash flow hedges included within the consolidated balance sheets (in thousands):
|  | Consolidated Balance Sheet Location |  | February 29, 2016 |  | May 31, 2015
Interest rate swaps ($750 million notional) |  | Accounts payable and accrued liabilities |  | $ | 15,818 |  |  | $ | 6,157 |
The table below presents the effects of our interest rate swaps on the consolidated statements of income and other comprehensive income for the three and nine months ended February 29, 2016 and 2015 (in thousands):
| Three Months Ended |  | Nine Months Ended
| February 29, 2016 |  | February 28, 2015 |  | February 29, 2016 |  | February 28, 2015
Derivatives in cash flow hedging relationships: |  |  |  |  |  |  |
Amount of loss recognized in other comprehensive income | $ | 11,946 |  |  | $ | 1,859 |  |  | $ | 15,946 |  |  | $ | 6,278 |
Amount of loss recognized in interest expense | $ | 2,083 |  |  | $ | 1,750 |  |  | $ | 6,284 |  |  | $ | 2,281 |
At February 29, 2016, the amount in accumulated other comprehensive income related to our interest rate swaps that is expected to be reclassified into interest expense during the next 12 months was approximately $6.3 million. Interest Expense Interest expense was $13.5 million and $12.2 million for the three months ended February 29, 2016 and 2015, respectively. Interest expense was $40.3 million and $31.1 million for the nine months ended February 29, 2016 and 2015, respectively. Interest expense is comprised primarily of interest payable on our long-term debt and lines of credit and also includes settlements on our interest rate swaps, amortization of deferred debt issuance costs and commitment fees on the unused portions of our Revolving Credit Facility.

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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 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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