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Financial Commitments | 12 Months Ended
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Dec. 31, 2020
Debt Disclosure [Abstract] |
Financial Commitments | Financial Commitments Long-Term Debt Long-term debt as reported on the Consolidated Balance Sheets consisted of the following:
| As of December 31,
(in thousands) | 2020 |  | 2019
2017 Senior Notes | $ | 495,271 |  |  | $ | 494,365 |
Term Loan B | 408,458 |  |  | N/A
2020 Revolver | — |  |  | N/A
2017 Credit Facility | N/A |  | 114,000 |
Convertible Notes(a) | 67,878 |  |  | 182,292 |
Equipment financing and mortgages | 47,594 |  |  | 39,159 |
Other indebtedness | 6,264 |  |  | 4,660 |
Total debt | 1,025,465 |  |  | 834,476 |
Less: Current maturities | 100,188 |  |  | 124,054 |
Long-term debt, net | $ | 925,277 |  |  | $ | 710,422 |
_____________________________________________________________________________________________________________ (a)The Company will repurchase or retire the remaining Convertible Notes at or before their June 15, 2021 maturity using proceeds from the Term Loan B, $69.9 million of which is currently held in a restricted cash account for this purpose. The following table reconciles the outstanding debt balances to the reported debt balances as of December 31, 2020 and 2019:
| As of December 31, 2020 |  | As of December 31, 2019
(in thousands) | Outstanding Debt | Unamortized Discounts and Issuance Costs | Debt, as reported |  | Outstanding Debt | Unamortized Discount and Issuance Costs | Debt, as reported
2017 Senior Notes | $ | 500,000 |  | $ | (4,729) |  | $ | 495,271 |  |  | $ | 500,000 |  | $ | (5,635) |  | $ | 494,365 |
Term Loan B | 423,938 |  | (15,480) |  | 408,458 |  |  | N/A | N/A | N/A
Convertible Notes | 69,918 |  | (2,040) |  | 67,878 |  |  | 200,000 |  | (17,708) |  | 182,292 |
The unamortized issuance costs related to the 2020 Revolver were $2.6 million as of December 31, 2020 and are included in other assets on the Consolidated Balance Sheets. The unamortized issuance costs related to the 2017 Credit Facility, which was terminated on August 18, 2020 (as discussed below) were $3.7 million as of December 31, 2019 and were included in other assets on the Consolidated Balance Sheets. 2020 Credit Agreement On August 18, 2020, the Company entered into a new credit agreement (the “2020 Credit Agreement”) with BMO Harris Bank N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and other lenders. The 2020 Credit Agreement provides for a $425.0 million term loan B facility (the “Term Loan B”) and a $175.0 million revolving credit facility (the “2020 Revolver”), with sublimits for the issuance of letters of credit and swing line loans up to the aggregate amounts of $75.0 million and $10.0 million, respectively. The Term Loan B will mature on August 18, 2027 and the 2020 Revolver will mature on August 18, 2025, in each case, unless any of the 2017 Senior Notes are outstanding on January 30, 2025 (which is 91 days prior to the maturity of the 2017 Senior Notes), in which case, both the Term Loan B and the 2020 Revolver will mature on January 30, 2025 (subject to certain further exceptions). The 2020 Credit Agreement permits the Company to repay any or all borrowings outstanding under the 2020 Credit Agreement at any time prior to maturity without penalty, except that the Company must pay a 1.00% premium in respect to the Term Loan B in connection with any transactions that reduce the yield applicable to the Term Loan B within the first twelve months after August 18, 2020 (subject to certain further exceptions). The 2020 Credit Agreement requires the Company to make regularly scheduled payments of principal on the Term Loan B in quarterly installments equal to 0.25% of the initial principal amount of the Term Loan B. The 2020 Credit Agreement also requires the Company to make prepayments on the Term Loan B in connection with certain asset sales, receipts of insurance proceeds, incurrences of unpermitted indebtedness and annual excess cash flow (subject to certain exceptions). Subject to certain exceptions, at any time prior to maturity, the 2020 Credit Agreement provides the Company with the right to increase the commitments under the 2020 Revolver and/or to establish one or more term loan facilities in an aggregate amount up to (i) the greater of $173.5 million and 50% LTM EBITDA (as defined in the 2020 Credit Agreement) plus (ii) additional amounts if (A) in the case of pari passu first lien secured indebtedness, the First Lien Net Leverage Ratio (as defined in the 2020 Credit Agreement) does not exceed 1.35:1.00, (B) in the case of junior lien secured indebtedness, the Total Net Leverage Ratio (as defined in the 2020 Credit Agreement) does not exceed 3.50:1.00 and (C) in the case of unsecured indebtedness, (x) the Total Net Leverage Ratio does not exceed 3.50:1.00 or (y) the Fixed Charge Coverage Ratio (as defined in the 2020 Credit Agreement) is no less than 2.00:1.00. Borrowings under the 2020 Credit Agreement bear interest, at the Company’s option, at a rate equal to (i) (a) LIBOR or (b) a base rate (determined by reference to the highest of (1) the administrative agent’s prime lending rate, (2) the federal funds effective rate plus 50 basis points and (3) the LIBOR rate for a one-month interest period plus 100 basis points) plus, (ii) an applicable margin. The margin applicable to the Term Loan B is between 4.50% and 4.75% for LIBOR and between 3.50% and 3.75% for base rate (which was initially 4.75% for LIBOR and 3.75% for base rate), and, in each case, is based on the Total Net Leverage Ratio. The margin applicable to the 2020 Revolver is between 4.25% and 4.75% for LIBOR and 3.25% and 3.75% for base rate (which was initially 4.75% for LIBOR and 3.75% for base rate), and, in each case, is based on the First Lien Net Leverage Ratio. In addition to paying interest on outstanding principal under the 2020 Credit Agreement, the Company will pay a commitment fee to the lenders under the 2020 Revolver in respect of the unutilized commitments thereunder. The Company will pay customary letter of credit fees. If a payment or bankruptcy event of default occurs and is continuing, the otherwise applicable margin on overdue amounts will be increased by 2% per annum. The agreement includes provisions for the replacement of LIBOR with an alternative benchmark rate in the event LIBOR is discontinued. The weighted-average annual interest rate on borrowings under the 2020 Revolver was 6.74% during the year ended December 31, 2020. The 2020 Credit Agreement requires, with respect to the 2020 Revolver only, the Company and its restricted subsidiaries to maintain a maximum First Lien Net Leverage Ratio range of 2.75:1:00, stepping down to 2.25:1.00 beginning the quarter ending March 31, 2022. The 2020 Credit Agreement also includes certain customary representations and warranties, affirmative covenants and events of default. Subject to certain exceptions, substantially all of the Company’s existing and future material wholly-owned subsidiaries unconditionally guarantee the obligations of the Company under the 2020 Credit Agreement; additionally, subject to certain exceptions, the obligations are secured by a lien on substantially all of the assets of the Company and its subsidiaries guaranteeing these obligations. As of December 31, 2020, the entire $175 million was available under the 2020 Revolver and the Company had not utilized the 2020 Revolver for letters of credit. The Company was in compliance with the financial covenants under the 2020 Credit Agreement for the period ended December 31, 2020. Termination of 2017 Credit Facility On April 20, 2017, the Company entered into a credit agreement (the “2017 Credit Facility”) with SunTrust Bank, now known as Truist Bank, as Administrative Agent, Swing Line Lender and L/C Issuer and a syndicate of other lenders. The 2017 Credit Facility provided for a $350 million revolving credit facility (the “2017 Revolver”) and a sublimit for the issuance of letters of credit and swing line loans up to the aggregate amount of $150 million and $10 million, respectively, both maturing on April 20, 2022 unless any of the Convertible Notes, as defined below, were outstanding on December 17, 2020, in which case all such borrowings would have matured on December 17, 2020 (the “spring-forward provision”). On August 18, 2020, the Company used proceeds from the Term Loan B to repay outstanding amounts under the 2017 Credit Facility. As a result of repaying the outstanding amounts under the 2017 Credit Facility and entering into the 2020 Credit Agreement, the Company terminated the 2017 Credit Facility, including its spring-forward provision that would have accelerated the maturity of the facility to December 17, 2020. The weighted-average annual interest rate on borrowings under the 2017 Revolver was 3.55% during the year ended December 31, 2020. At December 31, 2019, the balance outstanding on the 2017 Revolver of $114 million was included in “Current maturities of long-term debt” on the Consolidated Balance Sheet. Convertible Notes On June 15, 2016, the Company issued $200 million of 2.875% Convertible Senior Notes due June 15, 2021 (the “Convertible Notes”) in a private placement offering. On August 19, 2020, the Company used proceeds from the Term Loan B to repurchase $130.1 million aggregate principal amount of the Convertible Notes for an aggregate purchase price of $132.4 million (including accrued and unpaid interest to the repurchase date). At December 31, 2020, $69.9 million ($67.9 million net of unamortized discount and debt issuance costs) of the Convertible Notes remain outstanding and are included in “Current maturities of long-term debt” on the Consolidated Balance Sheet. The Company will repurchase or retire at or before maturity the remaining Convertible Notes and repay the principal balance using proceeds from the Term Loan B, which are currently held in a restricted cash account for this purpose. The Convertible Notes are unsecured obligations of the Company and do not contain any financial covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company. The Convertible Notes bear interest at a rate of 2.875% per year, payable in cash semi-annually in June and December. To account for the Convertible Notes, the Company applied the provisions of ASC 470-20, Debt with Conversion and Other Options (“ASC 470-20”). ASC 470-20 requires issuers of certain convertible debt instruments that may be settled in cash upon conversion to separately account for the liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer’s nonconvertible debt borrowing rate. This is done by allocating the proceeds from issuance to the liability component based on the fair value of the debt instrument excluding the conversion feature, with the residual allocated to the equity component and classified in additional paid in capital. The $46.8 million difference between the initial principal amount of the Convertible Notes ($200.0 million) and the proceeds initially allocated to the liability component ($153.2 million) is treated as a discount on the Convertible Notes. This difference is being amortized as non-cash interest expense using the interest method, as shown below under Interest Expense. The equity component, however, is not subject to amortization nor subsequent remeasurement. In addition, ASC 470-20 requires that the debt issuance costs associated with a convertible debt instrument be allocated between the liability and equity components in proportion to the allocation of the debt proceeds between these two components. The debt issuance costs attributable to the liability component of the Convertible Notes ($5.1 million) are also treated as a discount on the Convertible Notes and amortized as non-cash interest expense. The debt issuance costs attributable to the equity component ($1.5 million) were netted with the equity component and are not amortized. The following table presents information related to the liability and equity components of the Convertible Notes:
(in thousands) | December 31, 2020 |  | December 31, 2019
Liability component: |  |  |
Principal | $ | 69,918 |  |  | $ | 200,000 |
Conversion feature | (46,800) |  |  | (46,800) |
Allocated debt issuance costs | (5,051) |  |  | (5,051) |
Amortization and extinguishment of discount and debt issuance costs (non-cash interest expense) | 49,811 |  |  | 34,143 |
Net carrying amount | $ | 67,878 |  |  | $ | 182,292 |
Equity component: |  |  |
Conversion feature | $ | 46,800 |  |  | $ | 46,800 |
Reacquisition of conversion option from repurchase of notes, net of tax | (764) |  |  | — |
Allocated debt issuance costs | (1,543) |  |  | (1,543) |
Deferred taxes | (18,815) |  |  | (18,815) |
Net carrying amount | $ | 25,678 |  |  | $ | 26,442 |
Prior to January 15, 2021, the Convertible Notes were convertible only under certain circumstances including upon the occurrence of specified corporate events. The holders did not convert any of the Convertible Notes prior to January 15, 2021. On or after January 15, 2021 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. The Convertible Notes are convertible at an initial conversion rate of 33.0579 shares of the Company’s common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to an initial conversion price of approximately $30.25. The conversion rate will be subject to adjustment for some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date, the Company is required to increase, in certain circumstances, the conversion rate for a holder who elects to convert their Convertible Notes in connection with such a corporate event including customary conversion rate adjustments in connection with a “make-whole fundamental change” described in the indenture. Upon conversion, and at the Company’s election, the Company may satisfy its conversion obligation with cash, shares of its common stock or a combination thereof. As of December 31, 2020, the conversion provisions of the Convertible Notes have not been triggered and none of the notes have been converted. 2017 Senior Notes On April 20, 2017, the Company issued $500 million in aggregate principal amount of 6.875% Senior Notes due May 1, 2025 (the “2017 Senior Notes”) in a private placement offering. Interest on the 2017 Senior Notes is payable in arrears semi-annually in May and November of each year, beginning in November 2017. Prior to May 1, 2020, the Company could have redeemed the 2017 Senior Notes under certain conditions described in the agreement. Since May 1, 2020, the Company may redeem the 2017 Senior Notes at specified redemption prices described in the indenture. Upon a change of control, holders of the 2017 Senior Notes may require the Company to repurchase all or part of the 2017 Senior Notes at 101% of the principal amount thereof, plus accrued and unpaid interest to the redemption date. The 2017 Senior Notes are senior unsecured obligations of the Company and are guaranteed by substantially all of the Company’s existing and future subsidiaries that also guarantee obligations under the Company’s 2020 Credit Agreement, as defined above. In addition, the indenture for the 2017 Senior Notes provides for customary covenants, including events of default and restrictions on the payment of dividends and share repurchases. Equipment Financing and Mortgages The Company has certain loans entered into for the purchase of specific property, plant and equipment and secured by the assets purchased. The aggregate balance of equipment financing loans was approximately $36.9 million and $27.7 million at December 31, 2020 and 2019, respectively, with interest rates ranging from 2.74% to 3.89% with equal monthly installment payments over periods up to 7 years with balloon payments of $12.4 million in 2021 and $6.3 million in 2022. The aggregate balance of mortgage loans was approximately $10.7 million and $11.5 million at December 31, 2020 and 2019, respectively, with interest rates ranging from LIBOR plus 3% to a fixed 3.50% and equal monthly installment payments over periods up to 10 years with balloon payments of $2.9 million in 2021 and $6.8 million in 2023. The following table presents the future principal payments required under all of the Company’s debt obligations, discussed above:
Year (in thousands) |
2021 | $ | 102,228 |
2022 | 14,822 |
2023 | 14,282 |
2024 | 7,498 |
2025 | 506,156 |
Thereafter | 402,728 |
| 1,047,714 |
Less: Unamortized discount and issuance costs | 22,249 |
Total | $ | 1,025,465 |
Interest Expense Interest expense as reported in the Consolidated Statements of Operations consisted of the following:
| For the year ended December 31,
(in thousands) | 2020 |  | 2019 |  | 2018
Cash interest expense: |  |  |  |  |
Interest on 2017 Senior Notes | $ | 34,375 |  |  | $ | 34,375 |  |  | $ | 34,375 |
Interest on Term Loan B | 9,028 |  |  | N/A |  | N/A
Interest on 2020 Revolver | 77 |  |  | N/A |  | N/A
Interest on 2017 Credit Facility | 5,341 |  |  | 11,990 |  |  | 8,575 |
Interest on Convertible Notes | 4,373 |  |  | 5,750 |  |  | 5,750 |
Other interest | 2,079 |  |  | 2,172 |  |  | 2,747 |
Cash portion of loss on extinguishment | 786 |  |  | — |  |  | — |
Total cash interest expense | 56,059 |  |  | 54,287 |  |  | 51,447 |
Non-cash interest expense(a): |  |  |  |  |
Amortization of discount and debt issuance costs on Convertible Notes | 8,944 |  |  | 10,811 |  |  | 9,846 |
Amortization of discount and debt issuance costs on Term Loan B | 784 |  |  | N/A |  | N/A
Amortization of debt issuance costs on 2020 Revolver | 206 |  |  | N/A |  | N/A
Amortization of debt issuance costs on 2017 Credit Facility | 1,001 |  |  | 1,552 |  |  | 1,439 |
Amortization of debt issuance costs on 2017 Senior Notes | 906 |  |  | 844 |  |  | 787 |
Non-cash portion of loss on extinguishment | 8,312 |  |  | — |  |  | — |
Total non-cash interest expense | 20,153 |  |  | 13,207 |  |  | 12,072 |
Total interest expense | $ | 76,212 |  |  | $ | 67,494 |  |  | $ | 63,519 |
_____________________________________________________________________________________________________________ (a)The combination of cash and non-cash interest expense produces effective interest rates that are higher than contractual rates. Accordingly, the effective interest rates for the 2017 Senior Notes, Term Loan B and the Convertible Notes were 7.13%, 6.49% and 9.39%, respectively, for the year ended December 31, 2020.

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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://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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