Long-term debt

Long-term debt was comprised of the following:



	September 30, 2018			December 31, 2017
Senior secured credit facilities:
Term Loan A	$	700,000		$	775,000
Term Loan A-2	995,000			—
Term Loan B	3,351,250			3,377,500
Revolver	275,000			300,000
Senior notes	4,500,000			4,500,000
Acquisition obligations and other notes payable	167,779			150,512
Capital lease obligations	289,333			297,170
Total debt principal outstanding	10,278,362			9,400,182
Discount and deferred financing costs	(53,624		)	(63,951		)
	10,224,738			9,336,231
Less current portion	(1,784,065		)	(178,213		)
	$	8,440,673		$	9,158,018

Scheduled maturities of long-term debt at September 30, 2018 were as follows:



2018 (remainder of the year)	49,701
2019	2,028,808
2020	74,985
2021	3,311,502
2022	1,289,539
2023	36,437
Thereafter	3,487,390

On March 29, 2018, the Company entered into an Increase Joinder No. 1 (Increase Joinder Agreement) under its existing senior secured credit facilities. Pursuant to this Increase Joinder Agreement, the Company entered into an additional $995,000 Term Loan A-2. The new Term Loan A-2 bears interest at LIBOR plus an interest rate margin of 1.00%.

During the first nine months of 2018, the Company made mandatory principal payments under its senior secured credit facilities totaling $75,000 on Term Loan A and $26,250 on Term Loan B.

As of September 30, 2018, the Company maintains several effective interest rate cap agreements that have the economic effect of capping the Company's maximum exposure to LIBOR variable interest rate changes on specific portions of the Company's floating rate debt, as described below. The cap agreements are designated as cash flow hedges and, as a result, changes in the fair values of these cap agreements are reported in other comprehensive income. The amortization of the original cap premium is recognized as a component of debt expense on a straight-line basis over the terms of the cap agreements. These cap agreements do not contain credit-risk contingent features.

As of September 30, 2018, the Company maintains several effective interest rate cap agreements that were entered into in October 2015 with notional amounts totaling $3,500,000. These cap agreements became effective June 29, 2018 and have the economic effect of capping the LIBOR variable component of the Company’s interest rate at a maximum of 3.50% on an equivalent amount of its debt. These cap agreements expire on June 30, 2020. As of September 30, 2018, the total fair value of these cap agreements was an asset of approximately $2,135. During the nine months ended September 30, 2018, the Company recognized debt expense of $2,163 from these cap agreements and recorded a gain of $1,103 in other comprehensive income due to an increase in the unrealized fair value of these cap agreements.

Previously, the Company maintained other interest rate cap agreements that were entered into in November 2014 with notional amounts totaling $3,500,000. These cap agreements had the economic effect of capping the LIBOR variable component of the Company’s interest rate at a maximum of 3.50% on an equivalent amount of the Company’s debt. However, these interest rate cap agreements expired on June 30, 2018. During the nine months ended September 30, 2018, the Company recognized debt expense of $4,140 from these cap agreements and recorded an immaterial loss in other comprehensive income due to a decrease in the unrealized fair value of these cap agreements.

The following table summarizes the Company’s derivative instruments outstanding as of September 30, 2018 and December 31, 2017:

September 30, 2018

December 31, 2017

Derivatives designated as hedging instruments

Balance sheet location

Fair value

Balance sheet location

Fair value

Interest rate cap agreements

Other long-term assets

2,135

Other long-term assets

1,032

The following table summarizes the effects of the Company’s interest rate cap agreements for the three and nine months ended September 30, 2018 and 2017:



	Amount of unrecognized gains (losses) in OCI on interest rate cap agreements												Location of losses reclassified from accumulated OCI into income	Amount of losses reclassified from accumulated OCI into income
	Three months ended September 30,						Nine months ended September 30,							Three months ended September 30,						Nine months ended September 30,
Derivatives designated as cash flow hedges	2018			2017			2018			2017				2018			2017			2018			2017
Interest rate cap agreements	$	50		$	(782	)	$	1,103		$	(8,967	)	Debt expense	$	2,163		$	2,070		$	6,303		$	6,208
Tax (benefit) expense	(13		)	304			(284		)	3,488			Tax expense	(557		)	(805		)	(1,623		)	(2,415		)
Total	$	37		$	(478	)	$	819		$	(5,479	)		$	1,606		$	1,265		$	4,680		$	3,793

As of September 30, 2018, the Company’s Term Loan B debt bears interest at LIBOR plus an interest rate margin of 2.75%. Term Loan B is subject to interest rate caps if LIBOR should rise above 3.50%. Term Loan A bears interest at LIBOR plus an interest rate margin of 2.00%. The capped portion of Term Loan A is $148,750 if LIBOR should rise above 3.50%. In addition, the uncapped portion of Term Loan A, which is subject to the variability of LIBOR, is $551,250. Term Loan A-2 is subject to the variability of LIBOR plus an interest rate margin of 1.00%. Interest rates on the Company’s senior notes are fixed by their terms.

The Company’s weighted average effective interest rate on the senior secured credit facilities at the end of the third quarter was 4.80%, based on the current margins in effect of 2.00% for Term Loan A, 1.00% for Term Loan A-2, and 2.75% for Term Loan B, as of September 30, 2018.

The Company’s overall weighted average effective interest rate during the quarter ended September 30, 2018 was 4.93% and as of September 30, 2018 was 5.03%. The Company's weighted average effective interest rate for the nine months ended September 30, 2018 was 4.92%.

As of September 30, 2018, the Company’s interest rates are fixed on approximately 47.43% of its total debt.

As of September 30, 2018, the Company had $275,000 drawn on its $1,000,000 revolving line of credit under its senior secured credit facilities, of which approximately $14,355 was committed for outstanding letters of credit. The remaining amount is unencumbered. The Company also has approximately $22,621 of additional outstanding letters of credit related to its Kidney Care business and $211 of committed outstanding letters of credit related to DaVita Medical Group (DMG), which is backed by a certificate of deposit.