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Long-term Debt | 9 Months Ended
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Sep. 30, 2017
Debt Disclosure [Abstract] |
Long-term Debt | Long-term Debt Our long-term debt outstanding consists of the following (in millions):
| September 30, 2017 |  | December 31, 2016
Credit Agreement— |  |  |
Advances under revolving credit facility | $ | 138.0 |  |  | $ | 152.0 |
Term loan facilities | 298.3 |  |  | 421.2 |
Bonds payable— |  |  |
5.125% Senior Notes due 2023 | 295.7 |  |  | 295.3 |
5.75% Senior Notes due 2024 | 1,193.7 |  |  | 1,193.2 |
5.75% Senior Notes due 2025 | 344.3 |  |  | 343.9 |
2.00% Convertible Senior Subordinated Notes due 2043 | — |  |  | 275.7 |
Other notes payable | 80.1 |  |  | 55.8 |
Capital lease obligations | 272.3 |  |  | 279.3 |
| 2,622.4 |  |  | 3,016.4 |
Less: Current portion | (31.1 | ) |  | (37.1 | )
Long-term debt, net of current portion | $ | 2,591.3 |  |  | $ | 2,979.3 |
The following chart shows scheduled principal payments due on long-term debt for the next five years and thereafter (in millions):
| Face Amount |  | Net Amount
October 1 through December 31, 2017 | $ | 7.4 |  |  | $ | 7.4 |
2018 | 31.6 |  |  | 31.6 |
2019 | 31.7 |  |  | 31.6 |
2020 | 24.4 |  |  | 24.4 |
2021 | 25.8 |  |  | 25.8 |
2022 | 399.2 |  |  | 397.4 |
Thereafter | 2,120.4 |  |  | 2,104.2 |
Total | $ | 2,640.5 |  |  | $ | 2,622.4 |
In May 2017, we provided notice of our intent to exercise our early redemption option on the $320 million outstanding principal amount of the 2.00% Convertible Senior Subordinated Notes due 2043 (the “Convertible Notes”). Pursuant to the indenture, the holders had the right to convert their Convertible Notes into shares of our common stock at a conversion rate of 27.2221 shares per $1,000 principal amount of Convertible Notes, which rate was increased by the make-whole premium. Holders of $319.4 million in principal of these Convertible Notes chose to convert their notes to shares of our common stock resulting in the issuance of 8.9 million shares from treasury stock, including 0.2 million shares due to the make-whole premium. Approximately 8.6 million of these shares were included in Diluted earnings per share attributable to HealthSouth common shareholders as of March 31, 2017. We redeemed the remaining $0.6 million in principal at par in cash. The redemption and all conversions occurred in the second quarter of 2017. As a result of these transactions, we recorded a $10.4 million Loss on early extinguishment of debt in the second quarter of 2017. See also Note 10, Earnings per Common Share for additional information on these Convertible Notes. In September 2017, we amended our existing credit agreement. The following are the changes made to the material provisions of the credit agreement:
• | increase the maximum capacity under the revolving credit facility from $600 million to $700 million;
• | decrease the current term loan facility to $300 million with a net repayment of approximately $110 million;
• | decrease the spread used to calculate the applicable interest rate on any outstanding revolving credit or term loan balances by 25 basis points;
• | in addition to the specified amounts and types of permitted investments, allow for additional investments so long as the senior secured leverage ratio is no greater than 2.00:1 after giving pro forma effect to those additional investments;
• | in addition to the specified amounts and types of permitted restricted payments, allow for additional restricted payments so long as the senior secured leverage ratio is no greater than 2.00:1 (rather than the 1.75:1 threshold ratio applicable to this provision previously) after giving pro forma effect to those additional restricted payments;
• | increase the maximum amount of permitted capital expenditures in a given year from $300 million to $350 million, which amount is in addition to any unused portion of the permitted amount from the prior year;
• | increase the maximum leverage ratio in the financial covenants applicable for the periods ending on or before September 30, 2019 from 4.25x to 4.50x;
• | increase the accordion feature permitting future increases in revolving borrowing capacity or new term loans, or both, from an aggregate amount not to exceed $300 million to the greater of (a) $870 million and (b) our adjusted consolidated EBITDA for the most recently completed four-quarter period, after giving pro forma effect to any additional borrowings; and
• | move the maturity date for both the revolving credit and term loan facilities from July 2020 to September 2022.
All other material terms of the existing credit agreement remained the same and are described in more detail in Note 9, Long-term Debt, to the consolidated financial statements accompanying the 2016 Form 10-K. As a result of this amendment, we recorded a $0.3 million Loss on early extinguishment of debt in the third quarter of 2017. In February 2016, we entered into a development/lease agreement with CR HQ, LLC (the “Developer”) to construct our new corporate headquarters in Birmingham, Alabama. Under the terms of this agreement, the Developer is responsible for all costs of constructing the new facility ‘shell’ which will then be leased to us for an initial term of 15 years with four, five-year renewal options. The lease is expected to commence in the first half of 2018. We are responsible for the costs associated with improvements to the interior of the building. Due to the nature and extent of the tenant improvements we will be making to the new corporate headquarters and certain provisions of the development/lease agreement, we are deemed to be the accounting owner of the new corporate headquarters during the construction period. Construction commenced in the second quarter of 2016. As of September 30, 2017 and December 31, 2016, Property and equipment, net includes $46.8 million and $20.3 million, respectively, for the construction costs incurred to date by the Developer, and Long-term debt, net of current portion includes a corresponding financing obligation liability of $46.6 million and $20.3 million, respectively. The remaining corresponding financing obligation liability of $0.2 million as of September 30, 2017 is included in Current portion of long-term debt. It is estimated that the total financing obligation associated with the Developer’s costs to construct the new corporate headquarters will be $56 million. The amounts recorded for construction costs and the corresponding liability are noncash activities for purposes of our condensed consolidated statement of cash flows. For additional information regarding our indebtedness, see Note 9, Long-term Debt, to the consolidated financial statements accompanying the 2016 Form 10-K.

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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 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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