9.	Line of Credit and Long-Term Debt

Long-term debt consists of the following (in thousands):

	As of December 31,
	2015			2014
Equipment-based Facility	$	17,957		$	--
Credit Facility		--			34,601
Notes payable for transportation and construction equipment and other		3,342			3,385
		21,299			37,986
Less current maturities of long-term debt		(5,192	)		(965	)
Total long-term debt	$	16,107		$	37,021

Equipment-based Facility

In May 2015, the Company and its wholly-owned subsidiaries entered into a $40.0 million loan and security agreement with Nations, consisting of a $20.0 million Term Loan and a $20.0 million Revolving Loan (combined, the “Equipment-based Facility”), which replaced its Prior Credit Facility. The amount of the Revolving Loan that may be borrowed from time to time is determined quarterly and may not exceed $20.0 million. In addition, the sum of the outstanding balances of the Equipment-based Facility may not exceed the lesser of $40.0 million or 65% of the appraised value of the collateral pledged for the loans. At December 31, 2015, the Company had approximately a borrowing base of $29.6 million, which was the result of calculating 65% of the appraised value (where appraised value equals net operating liquidated value) of the Company’s collateral. The Revolving Loan may be utilized by the Company to provide ongoing working capital and for other general corporate purposes.

The Equipment-based Facility bears interest at an initial fixed annual rate of 12%, which is subject to (i) a decrease of up to two percentage points based on the Company's fixed charge coverage ratio for each of the most recently ended four quarters beginning with the four quarters ending June 30, 2016; and (ii) an increase of up to two percentage points beginning December 31, 2015 based on the fixed charge coverage ratio at the end of the following four quarters. Principal on the Term Loan is payable in 47 monthly installments (with accrued interest) with a final payment of the then outstanding principal amount on May 29, 2019. Up to $5.0 million of the Term Loan may be prepaid in any year, but subject to a pre-payment fee that declines as the Term Loan nears maturity. Outstanding Revolving Loans are payable in full thirty days before the maturity date of the Term Loan.

The Equipment-based Facility is secured by all of the Company's personal property except accounts receivable, including all of its construction equipment, which forms the basis of availability under the Revolving Loan. The Equipment-based Facility is also secured by one-half of the equipment of the Company's 50%-owned affiliates, Road and Highway Builders, LLC and Myers & Sons Construction, L.P. pursuant to a separate security agreement with those entities. If a default occurs, Nations may exercise the Company's rights in the collateral, with all of the rights of a secured party under the Uniform Commercial Code, including, among other things, the right to sell the collateral at public or private sale.

The proceeds of the Term Loan of $20.0 million and our initial draw of $14.6 million under the Revolving Loan were utilized by the Company to repay the balance outstanding and terminate the Prior Credit Facility and for other general corporate purposes. In addition, in connection with incurring this debt, we recorded $1.3 million in deferred debt issuance costs which are included in “Other assets, net” in our consolidated balance sheet, which is being amortized on a straight line basis over the term of the Equipment-based Facility.

The Company’s Equipment-based Facility has no financial covenants; however, it contains restrictions on the Company’s ability to:

Incur liens and encumbrances on equipment;

Incur further indebtedness;

Dispose of a material portion of assets or merge with a third party;

Make acquisitions; and

Make investments in securities.

Due to this new Equipment-based Facility agreement, the Company’s Letter of Credit, which under our Prior Credit Facility reduced the Company’s borrowing availability, is now collateralized with cash. The aggregate amount of letters of credit outstanding under the Prior Credit Facility was $3.0 million at December 31, 2014, which reduced availability under the Prior Credit Facility. Refer to Note 4 for more information regarding the Company’s cash and cash equivalents including restricted cash used as collateral.

Interest expense related to our Equipment-based Facility was $2.9 million for the 2015 fiscal year compared to $1.0 million in the 2014 fiscal year. This increase in interest expense in 2015 was driven by the increased interest rate on the new Equipment-based Facility agreement, as described above.

At December 31, 2015, the Company had zero drawn on the Revolving Loan, $18.0 million Term Loan outstanding and $11.6 million of borrowings available. At December 31, 2014, the Company had $34.6 million outstanding under the Prior Credit Facility and $2.4 million of borrowings available.

Fair Value

The Company’s debt is recorded at the carrying amount in the consolidated balance sheets. The Company uses an income approach to determine the fair value of its 12% Equipment-based Term Loan due May 29, 2019 using estimated cash flows, which is a Level 3 fair value measurement. As of December 31, 2015, the carrying values and fair values are as follows (amounts in thousands):

	As of December 31, 2015
	Carrying Value		Fair Value

Equipment-based revolving loan	$	--	$	--
Equipment-based term loan		17,957		17,957
Total Equipment-based Facility debt	$	17,957	$	17,957

The Equipment-based revolving loan’s fair value was not practicable to estimate as the timing of cash drawdowns and repayments cannot be determined. The effective interest rate of the Equipment-based revolving loan was 12.17% at December 31, 2015.

As of December 31, 2014, the recorded value of the Company’s Prior Credit Facility approximated its fair value, as the amount outstanding at any given point in time was the principal amount due and interest was paid based on this amount considering the duration outstanding. In order to extinguish this Prior Credit Facility debt, the Company incurred costs of $0.2 million which is included in the Company’s consolidated statement of operations.

Notes Payable for Transportation and Construction Equipment

The Company has purchased and financed various transportation and construction equipment to enhance the Company’s fleet of equipment. The total long-term notes payable related to the purchase of financed equipment was $3.3 million at both December 31, 2015 and 2014. The purchases have payment terms ranging from 3 to 5 years and the associated interest rates range from 3.12% to 6.29%.

Maturities of Debt

The Company’s long-term obligations mature in future years as follows (amounts in thousands):

Years Ending December 31,	Amount
2016	$	5,192
2017		4,993
2018		4,868
2019		6,196
2020		50
Thereafter		--
	$	21,299

The long-term obligations above include $0.5 million related to a capital lease outstanding as of December 31, 2015. See Note 1 for more information regarding our capital lease.