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DEBT | 12 Months Ended
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Dec. 31, 2019
Debt Disclosure [Abstract] |
DEBT | DEBT A summary of debt is as follows:
| December 31, |  |
| 2019 |  | 2018
Senior Secured Credit Facility: |  |  |
Revolving Credit Facility due May 2023 ("Revolving Credit Facility"); bearing interest at LIBOR plus 1.75% | $ | 26,900 |  |  | $ | 69,600 |
Term Loan A Facility due May 2023 (Term Loan Facility"); bearing interest at LIBOR plus 1.75% | 350,000 |  |  | 350,000 |
Tax-Exempt Bonds: |  |  |
New York State Environmental Facilities Corporation Solid Waste Disposal Revenue Bonds Series 2014 ("New York Bonds 2014") due December 2044 - fixed rate interest period through 2029; bearing interest at 2.875% | 25,000 |  |  | 25,000 |
New York State Environmental Facilities Corporation Solid Waste Disposal Revenue Bonds Series 2014R-2 ("New York Bonds 2014R-2") due December 2044 - fixed rate interest period through 2026; bearing interest at 3.125% | 15,000 |  |  | 15,000 |
Finance Authority of Maine Solid Waste Disposal Revenue Bonds Series 2005R-3 ("FAME Bonds 2005R-3") due January 2025 - fixed rate interest period through 2025; bearing interest at 5.25% | 25,000 |  |  | 25,000 |
Finance Authority of Maine Solid Waste Disposal Revenue Bonds Series 2015R-1 ("FAME Bonds 2015R-1") due August 2035 - fixed rate interest period through 2025; bearing interest at 5.125% | 15,000 |  |  | 15,000 |
Finance Authority of Maine Solid Waste Disposal Revenue Bonds Series 2015R-2 ("FAME Bonds 2015R-2") due August 2035 - fixed rate interest period through 2025; bearing interest at 4.375% | 15,000 |  |  | 15,000 |
Vermont Economic Development Authority Solid Waste Disposal Long-Term Revenue Bonds Series 2013 ("Vermont Bonds") due April 2036 - fixed rate interest period through 2028; bearing interest at 4.625% | 16,000 |  |  | 16,000 |
Business Finance Authority of the State of New Hampshire Solid Waste Disposal Revenue Bonds Series 2013 ("New Hampshire Bonds") due April 2029 - fixed rate interest period through 2029; bearing interest at 2.95% | 11,000 |  |  | 11,000 |
Other: |  |  |
Finance leases maturing through December 2107; bearing interest at a weighted average of 5.0% | 18,364 |  |  | 11,248 |
Notes payable maturing through June 2027; bearing interest at a weighted average of 3.5% | 5,464 |  |  | 2,401 |
Principal amount of debt | 522,728 |  |  | 555,249 |
Less—unamortized discount and debt issuance costs (1) | 9,406 |  |  | 10,950 |
Debt less unamortized discount and debt issuance costs | 513,322 |  |  | 544,299 |
Less—current maturities of debt | 4,301 |  |  | 2,298 |
| $ | 509,021 |  |  | $ | 542,001 |
(1)A summary of unamortized discount and debt issuance costs by debt instrument follows:
| December 31, |  |
| 2019 |  | 2018
Revolving Credit Facility and Term Loan Facility (collectively, the "Credit Facility") | $ | 5,478 |  |  | $ | 7,118 |
New York Bonds 2014 | 1,057 |  |  | 847 |
New York Bonds 2014R-2 | 390 |  |  | 450 |
FAME Bonds 2005R-3 | 432 |  |  | 517 |
FAME Bonds 2015R-1 | 552 |  |  | 622 |
FAME Bonds 2015R-2 | 417 |  |  | 493 |
Vermont Bonds | 541 |  |  | 595 |
New Hampshire Bonds | 539 |  |  | 308 |
| $ | 9,406 |  |  | $ | 10,950 |
Credit Facility In fiscal year 2018, we entered into a credit agreement ("Credit Agreement"), which provides for a $350,000 aggregate principal amount Term Loan Facility and a $200,000 Revolving Credit Facility. The net proceeds from this transaction were used to repay in full the amounts outstanding of the $350,000 aggregate principal amount term loan B facility ("Term Loan B Facility") and the $160,000 revolving line of credit facility plus accrued and unpaid interest thereon and to pay related transaction expenses. We have the right to request, at our discretion, an increase in the amount of loans under the Credit Facility by an aggregate amount $125,000, subject to the terms and conditions set forth in the Credit Agreement. The Credit Facility has a 5-year term and bears interest at a rate of LIBOR plus 1.75%, which can be reduced to a rate of LIBOR plus 1.25% upon us reaching a consolidated net leverage ratio of less than 2.25x. The Credit Facility is guaranteed jointly and severally, fully and unconditionally by all of our significant wholly-owned subsidiaries and secured by substantially all of our assets. As of December 31, 2019, further advances were available under the Credit Facility in the amount of $148,575. The available amount is net of outstanding irrevocable letters of credit totaling $24,525, at which date no amount had been drawn. The Credit Agreement requires us to maintain a minimum interest coverage ratio and a maximum consolidated net leverage ratio, to be measured at the end of each fiscal quarter. As of December 31, 2019, we were in compliance with the covenants contained in the Credit Agreement. In addition to these financial covenants, the Credit Agreement also contains a number of important customary affirmative and negative covenants which restrict, among other things, our ability to sell assets, incur additional debt, create liens, make investments, and pay dividends. We do not believe that these restrictions impact our ability to meet future liquidity needs. An event of default under any of our debt agreements could permit some of our lenders, including the lenders under the Credit Facility, to declare all amounts borrowed from them to be immediately due and payable, together with accrued and unpaid interest, or, in the case of the Credit Facility, terminate the commitment to make further credit extensions thereunder, which could, in turn, trigger cross-defaults under other debt obligations. If we were unable to repay debt to our lenders, or were otherwise in default under any provision governing our outstanding debt obligations, our secured lenders could proceed against us and against the collateral securing that debt. Tax-Exempt Financings New York Bonds. In fiscal year 2019, we completed the remarketing of $25,000 aggregate principal amount of New York Bonds 2014. As of December 31, 2019, we had outstanding $25,000 aggregate principal amount of New York Bonds 2014 and $15,000 aggregate principal amount of New York Bonds 2014R-2 issued by the New York State Environmental Facilities Corporation under the indenture dated December 1, 2014 (collectively, the “New York Bonds”). The New York Bonds 2014 accrue interest at 2.875% per annum through December 2, 2029, at which time they may be converted from a fixed rate to a variable rate. The New York Bonds 2014R-2 accrue interest at 3.125% per annum through May 31, 2026, at which time they may be converted from a fixed rate to a variable rate. The New York Bonds, which are unsecured and guaranteed jointly and severally, fully and unconditionally by all of our significant wholly-owned subsidiaries, require interest payments on June 1 and December 1 of each year and mature on December 1, 2044. We borrowed the proceeds of the New York Bonds to finance or refinance certain capital projects in the state of New York and to pay certain costs of issuance of the New York Bonds. Maine Bonds. In fiscal year 2018, we completed the issuance of $15,000 aggregate principal amount of FAME Bonds 2015R-2. As of December 31, 2019, we had outstanding $25,000 aggregate principal amount of FAME Bonds 2005R-3, $15,000 aggregate principal amount of FAME Bonds 2015R-1, and $15,000 aggregate principal amount of FAME Bonds 2015R-2 (collectively, the "FAME Bonds"). The FAME Bonds 2005R-3 accrue interest at 5.25% per annum, and interest is payable semiannually on February 1 and August 1 of each year until such bonds mature on January 1, 2025. The FAME Bonds 2015R-1 accrue interest at 5.125% per annum through August 1, 2025, at which time they may be converted from a fixed to a variable rate, and interest is payable semiannually on February 1 and August 1 of each year until the FAME Bonds 2015R-1 mature on August 1, 2035. The FAME Bonds 2015R-2 accrue interest at 4.375% per annum through July 31, 2025, at which time they may be converted from a fixed to a variable rate, and interest is payable semiannually on May 1 and November 1 of each year until the FAME Bonds 2015R-2 mature on August 1, 2035. The FAME Bonds are unsecured and guaranteed jointly and severally, fully and unconditionally by all of our significant wholly-owned subsidiaries. We borrowed the proceeds of the offering of the FAME Bonds to finance or refinance the costs of certain of our solid waste landfill facilities and solid waste collection, organics and transfer, recycling and hauling facilities, and to pay certain costs of the issuance of the FAME Bonds. Vermont Bonds. In fiscal year 2018, we completed the remarketing of $16,000 aggregate principal amount of 4.75% fixed rate senior unsecured Vermont Bonds. As of December 31, 2019, we had outstanding $16,000 aggregate principal amount of Vermont Bonds. The Vermont Bonds, which are guaranteed jointly and severally, fully and unconditionally by all of our significant wholly-owned subsidiaries, accrue interest at 4.625% per annum through April 2, 2028, after which time there is a mandatory tender, and interest is payable semiannually on May 1 and November 1 of each year. The Vermont Bonds mature on April 1, 2036. We borrowed the proceeds of the Vermont Bonds to finance or refinance certain qualifying property, plant and equipment assets purchased in the state of Vermont. New Hampshire Bonds. In fiscal year 2019, we completed the remarketing of $11,000 aggregate principal amount of senior unsecured New Hampshire Bonds. As of December 31, 2019, we had outstanding $11,000 aggregate principal amount of New Hampshire Bonds. The New Hampshire Bonds, which are guaranteed jointly and severally, fully and unconditionally by all of our significant wholly-owned subsidiaries, accrue interest at 2.95% per annum through maturity on April 1, 2029 and interest. During the fixed interest rate period, the New Hampshire Bonds are not supported by a letter of credit. Interest is payable on April 1 and October 1 of each year. We borrowed the proceeds of the New Hampshire Bonds to finance or refinance certain qualifying property, plant and equipment assets purchased in the state of New Hampshire. Loss on Debt Extinguishment In order to lower our borrowing costs and reduce our market risk we completed the following transactions that resulted in a loss on debt extinguishment in fiscal years 2019, 2018 and 2017 of $0, $7,352 and $517, respectively: •the write-off of debt issuance costs and unamortized discount, in the case of our Term Loan B Facility in fiscal year 2018, associated with the refinancing of our previously outstanding senior secured credit facility in fiscal year 2018 and an amendment to our previously outstanding senior secured credit facility in fiscal year 2017: and •the write-off of debt issuance costs in connection with the remarketing of our Vermont Bonds in fiscal year 2018 and the remarketing of our Finance Authority of Maine Solid Waste Disposal Revenue Bonds Series 2005R-1 (“FAME Bonds 2005R-1”) and Finance Authority of Maine Solid Waste Disposal Revenue Bonds Series 2005R-2 (“FAME Bonds 2005R-2”) into the FAME Bonds 2005R-3 in fiscal year 2017. Interest Expense The components of interest expense are as follows:
| Fiscal Year Ended December 31, |  |  |  |
| 2019 |  | 2018 |  | 2017
Interest expense on long-term debt and finance leases | $ | 22,553 |  |  | $ | 23,431 |  |  | $ | 22,060 |
Amortization of debt issuance costs and discount on long-term debt | 2,293 |  |  | 2,449 |  |  | 2,692 |
Letter of credit fees | 519 |  |  | 554 |  |  | 703 |
Less: capitalized interest | (263) |  |  | (140) |  |  | (295) |
Total interest expense | $ | 25,102 |  |  | $ | 26,294 |  |  | $ | 25,160 |
Cash Flow Hedges Our strategy to reduce exposure to interest rate risk involves entering into interest rate derivative agreements to hedge against adverse movements in interest rates related to the variable rate portion of our long-term debt. We enter into interest rate derivative agreements to manage exposure to fluctuations in interest rates related to variable rate interest payments of our long-term debt. As of both December 31, 2019, and December 31, 2018, our interest rate derivative agreements had a total notional amount of $190,000. We receive interest based on the 1-month LIBOR index, restricted by a floor in certain instances, and pay interest at a weighted average rate of approximately 2.5% as of both December 31, 2019 and December 31, 2018. The agreements mature between February 2021 and May 2023. In fiscal year 2019, we entered into interest rate derivative agreements with a total notional amount of $65,000 that will serve to replace existing interest rate derivative agreements upon their expiration between February 2021 and February 2022. These forward starting interest rate derivative agreements mature between February 2026 and February 2027. We receive interest based on the 1-month LIBOR index, restricted by floor, and pay interest at a weighted average rate of approximately 1.8%. We have designated these derivative instruments as highly effective cash flow hedges, and therefore the change in fair value is recorded in our stockholders’ equity (deficit) as a component of accumulated other comprehensive loss and included in interest expense at the same time as interest expense is affected by the hedged transactions. Differences paid or received over the life of the agreements are recorded as additions to or reductions of interest expense on the underlying debt and included in cash flows from operating activities. A summary of the effect of cash flow hedges related to derivative instruments on the consolidated balance sheet follows:
|  |  | Fair Value |  |
| Balance Sheet Location |  | December 31, 2019 |  | December 31, 2018
Interest rate swaps | Other current assets |  |  | $ | — |  |  | $ | 338 |
Interest rate swaps | Other non-current assets |  |  | — |  |  | 482 |
Total |  |  | $ | — |  |  | $ | 820 |
Interest rate swaps | Other accrued liabilities |  |  | $ | 1,824 |  |  | $ | 387 |
Interest rate swaps | Other long-term liabilities |  |  | 3,603 |  |  | 1,555 |
Total |  |  | $ | 5,427 |  |  | $ | 1,942 |
Interest rate swaps | Accumulated other comprehensive loss, net |  |  | $ | (5,929) |  |  | $ | (1,196) |
Interest rate swaps - tax provision | Accumulated other comprehensive loss, net |  |  | (112) |  |  | (112) |
|  |  | $ | (6,041) |  |  | $ | (1,308) |
A summary of the amount of gain or (loss) on cash flow hedging relationships related to interest rate swaps reclassified from accumulated other comprehensive loss, net into earnings follows:
|  | Fiscal Year Ended December 31, |  |  |  |
|  | 2019 |  | 2018 |  | 2017
Statement of Operations Location |  | (Expense) Income |  |  |  |  |
Interest expense |  | $ | (553) |  |  | $ | (363) |  |  | $ | (421) |
Fair Value of Debt As of December 31, 2019, the fair value of our fixed rate debt, including the FAME Bonds, Vermont Bonds, New York Bonds and New Hampshire Bonds was approximately $131,357 and the carrying value was $122,000. The fair value of the FAME Bonds, Vermont Bonds, New York Bonds and New Hampshire Bonds is considered to be Level 2 within the fair value hierarchy as the fair value is determined using market approach pricing provided by a third-party that utilizes pricing models and pricing systems, mathematical tools and judgment to determine the evaluated price for the security based on the market information of each of the bonds or securities with similar characteristics. As of December 31, 2019, the carrying value of our Term Loan Facility was $350,000 and the carrying value of our Revolving Credit Facility was $26,900. Their fair values are based on current borrowing rates for similar types of borrowing arrangements, or Level 2 inputs, and approximate their carrying values. Although we have determined the estimated fair value amounts of the FAME Bonds, Vermont Bonds, New York Bonds and New Hampshire Bonds using available market information and commonly accepted valuation methodologies, a change in available market information, and/or the use of different assumptions and/or estimation methodologies could have a material effect on the estimated fair values. These amounts have not been revalued, and current estimates of fair value could differ significantly from the amounts presented. Future Maturities of Debt Aggregate principal maturities of debt are as follows:
Estimated Future Payments as of December 31, 2019 |
Fiscal year ending December 31, 2020 | $ | 4,300 |
Fiscal year ending December 31, 2021 | 3,593 |
Fiscal year ending December 31, 2022 | 5,358 |
Fiscal year ending December 31, 2023 | 379,945 |
Fiscal year ending December 31, 2024 | 2,893 |
Thereafter | 126,639 |
| $ | 522,728 |

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- Definition The entire disclosure for debt and capital lease obligations can be reported. 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. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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