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Long-Term Debt | 12 Months Ended
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Dec. 31, 2013
Long-Term Debt | 4) LONG-TERM DEBT A summary of long-term debt follows:
|  | December 31, |
|  | 2013 |  |  | 2012 |
|  | (amounts in thousands) |
Long-term debt: |  |  |  |  |  |  |  |
Notes payable and Mortgages payable (including obligations under capitalized leases of $6,633 in 2013 and $8,267 in 2012) and term loans with varying maturities through 2037; weighted average interest rates of 5.9% in each of 2013 and 2012 (see Note 7 regarding capitalized leases) |  | $ | 37,553 |  |  | $ | 47,216 |
Revolving credit and on-demand credit facility |  |  | 25,500 |  |  |  | 163,500 |
Term Loan A, net of unamortized discount of $3,340 in 2013 and $4,612 in 2012 |  |  | 935,308 |  |  |  | 983,438 |
Term Loan B, net of unamortized discount of $6,473 in 2013 and $8,724 in 2012 |  |  | 543,527 |  |  |  | 737,176 |
Term Loan A2 |  |  | 871,875 |  |  |  | 894,375 |
Revenue bonds, interest at floating rates of 0.1% at December 31, 2013 and 0.2% at December 31, 2012, with varying maturities through 2015 |  |  | 5,300 |  |  |  | 5,300 |
Accounts receivable securitization program |  |  | 240,000 |  |  |  | 249,000 |
7.125% Senior Secured Notes due 2016, including unamortized net premium of $11 in 2013 and $15 in 2012 |  |  | 400,011 |  |  |  | 400,015 |
7.00% Senior Unsecured Notes due 2018 |  |  | 250,000 |  |  |  | 250,000 |
|  |  | 3,309,074 |  |  |  | 3,730,020 |
Less-Amounts due within one year |  |  | (99,312 | ) |  |  | (2,589 | )
|  | $ | 3,209,762 |  |  | $ | 3,727,431 |
In May, 2013, we entered into a third amendment (the “Third Amendment”) to the credit agreement, dated as of November 15, 2010 (as amended from time to time, the “Credit Agreement”), which became effective that day, among UHS, the several banks and other financial institutions from time to time parties thereto, JPMorgan Chase Bank, N.A., as administrative agent and the other agents party thereto. The Third Amendment provides for a reduction in the interest rates payable in connection with certain borrowings under the Credit Agreement. Upon the effectiveness of the Third Amendment, UHS replaced its existing $745.9 million senior secured Tranche B term loan with a new senior secured Tranche B-1 term loan in the same amount on substantially the same terms as the Tranche B term loan, other than lower interest rates. Borrowings under the Tranche B-1 term loan bear interest at a rate per annum equal to, at our election, one, two, three or six month LIBOR, plus an applicable margin of 2.25% or ABR plus an applicable margin of 1.25%. The minimum LIBOR and ABR rates for the Tranche B term loan of 1.0% and 2.0%, respectively, were eliminated. In September, 2012, we entered into a second amendment (“Second Amendment”) to our Credit Agreement which provided for: (i) a new $900 million Term Loan-A (“Term Loan A2”) at the same interest rates as our existing Term Loan A and a final maturity date of August 15, 2016; (ii) the extension of the maturity date on a substantial portion of our $800 million revolving credit facility commitment with $777 million of the commitment extended to mature on August 15, 2016 and the remaining $23 million commitment scheduled to mature on November 15, 2015 (there were no borrowings outstanding pursuant to our revolving credit facility as of December 31, 2013), and; (iii) the extension of the maturity date on a substantial portion of our Term Loan-A borrowings which, based upon the outstanding Term Loan-A borrowings as of December 31, 2013, $892 million is scheduled to mature on August 15, 2016 and the remaining $43 million is scheduled to mature on November 15, 2015. The Second Amendment also provides for increased flexibility for refinancing and certain other modifications but substantially all other terms of the Credit Agreement remain unchanged. In September, 2012, we used $700 million of the proceeds from the new Term Loan A2 facility to extinguish a portion of our higher priced, Term Loan-B facility. Pricing under the new Term Loan A2 facility was 1% lower than the Term Loan-B facility and did not include a LIBOR Floor whereas, at that time, the Term Loan-B facility had a 1% LIBOR Floor (which has since been eliminated as part of the above-mentioned Third Amendment in May, 2013). During the third quarter of 2012, in connection with the extinguishment of a portion of our Term Loan-B facility, we recorded a pre-tax charge of $29 million to write-off the related portion of the Term Loan-B deferred financing costs. The Credit Agreement, as amended, is a senior secured facility which, as of December 31, 2013, provided for an aggregate commitment amount of $3.16 billion, comprised of an $800 million revolving credit facility, a $939 million Term Loan-A facility, a $550 million Term Loan-B facility and a $872 million Term Loan-A2 facility. The revolving credit facility includes a $125 million sub-limit for letters of credit. The Credit Agreement is secured by substantially all of the assets of the Company and our material subsidiaries and guaranteed by our material subsidiaries. Borrowings under the Credit Agreement bear interest at either (1) the ABR rate which is defined as the rate per annum equal to, at our election: the greatest of (a) the lender’s prime rate, (b) the weighted average of the federal funds rate, plus 0.5% and (c) one month LIBOR rate plus 1%, in each case, plus an applicable margin based upon our consolidated leverage ratio at the end of each quarter ranging from 0.50% to 1.25% for revolving credit, Term Loan-A and Term Loan-A2 borrowings and 1.25% for Term Loan B borrowings or (2) the one, two, three or six month LIBOR rate (at our election), plus an applicable margin based upon our consolidated leverage ratio at the end of each quarter ranging from 1.50% to 2.25% for revolving credit, Term Loan-A and Term Loan-A2 borrowings and 2.25% for Term Loan-B borrowings. The current applicable margins are 0.50% for ABR-based loans, 1.50% for LIBOR-based loans under the revolving credit, Term Loan-A and Term Loan-A2 facilities and 2.25% under the Term Loan-B facility. As of December 31, 2013, we had no borrowings outstanding pursuant to the terms of our $800 million revolving credit facility and we had $755 million of available borrowing capacity, net of $25 million of outstanding borrowings pursuant to a short-term, on-demand credit facility and $20 million of outstanding letters of credit. During 2013, we made scheduled principal payments of $72 million on the Term Loan-A and Term Loan A2 facilities. Quarterly installment payments (“Installment Payments”) are due on the Term Loan-A and Term Loan-A2 facilities which approximate $72 million in 2014, $77 million in 2015 and $46 million in 2016. The Installment Payments due on the Term Loan-A and Term Loan-A2 facilities during 2014 are classified as current maturities of long-term debt on our Consolidated Balance Sheet as of December 31, 2013. Although no Installment Payments are due on the Term Loan-B facility, we made optional repayments of $196 million during the fourth quarter of 2013. In October, 2013 our $275 million accounts receivable securitization program (“Securitization”) with a group of conduit lenders and liquidity banks was amended to extend the maturity date to October 25, 2016 and reduce the interest rate spread and commitment fee. Substantially all of the patient-related accounts receivable of our acute care hospitals (“Receivables”) serve as collateral for the outstanding borrowings. We have accounted for this Securitization as borrowings. We maintain effective control over the Receivables since, pursuant to the terms of the Securitization, the Receivables are sold from certain of our subsidiaries to special purpose entities that are wholly-owned by us. The Receivables, however, are owned by the special purpose entities, can be used only to satisfy the debts of the wholly-owned special purpose entities, and thus are not available to us except through our ownership interest in the special purpose entities. The wholly-owned special purpose entities use the Receivables to collateralize the loans obtained from the group of third-party conduit lenders and liquidity banks. The group of third-party conduit lenders and liquidity banks do not have recourse to us beyond the assets of the wholly-owned special purpose entities that securitize the loans. At December 31, 2013, we had $240 million of outstanding borrowings and $35 million of additional capacity pursuant to the terms of our accounts receivable securitization program. Our $250 million, 7.00% senior unsecured notes (the “Unsecured Notes”) are scheduled to mature on October 1, 2018. The Unsecured Notes were issued on September 29, 2010 and registered in April, 2011. Interest on the Unsecured Note is payable semiannually in arrears on April 1st and October 1st of each year. The Unsecured Notes can be redeemed in whole at anytime subject to a make-whole call at treasury rate plus 50 basis points prior to October 1, 2014. They are also redeemable in whole or in part at a price of: (i) 103.5% on or after October 1, 2014; (ii) 101.75% on or after October 1, 2015, and; (iii) 100% on or after October 1, 2016. These Unsecured Notes are guaranteed by a group of subsidiaries (each of which is a 100% directly or indirectly owned subsidiary of Universal Health Services, Inc.) which fully and unconditionally guarantee the Unsecured Notes on a joint and several basis, subject to certain customary automatic release provisions. On June 30, 2006, we issued $250 million of senior notes which have a 7.125% coupon rate and mature on June 30, 2016 (the “7.125% Notes”). Interest on the 7.125% Notes is payable semiannually in arrears on June 30th and December 30th of each year. In June, 2008, we issued an additional $150 million of 7.125% Notes which formed a single series with the original 7.125% Notes issued in June, 2006. Other than their date of issuance and initial price to the public, the terms of the 7.125% Notes issued in June, 2008 are identical to and trade interchangeably with, the 7.125% Notes which were originally issued in June, 2006. In connection with the entering into of the Credit Agreement on November 15, 2010, and in accordance with the Indenture dated January 20, 2000 governing the rights of our existing notes, we entered into a supplemental indenture pursuant to which our 7.125% Notes (due in 2016) were equally and ratably secured with the lenders under the Credit Agreement with respect to the collateral for so long as the lenders under the Credit Agreement are so secured. The average amounts outstanding during each of years 2013, 2012 and 2011 under the current and prior Credit Agreements, demand notes and accounts receivable securitization programs was $2.9 billion, with corresponding interest rates of 2.2%, 2.9% and 3.4% including commitment and facility fees. The maximum amounts outstanding at any month-end were $3.00 billion in 2013, $3.06 billion in 2012 and $3.03 billion in 2011. The effective interest rate on our current and prior Credit Agreements, accounts receivable securitization programs, and demand notes, which includes the respective interest expense, commitment and facility fees, designated interest rate swaps expense and amortization of deferred financing costs and original issue discounts, was 3.6% in 2013, 4.5% in 2012 and 4.6% in 2011. Our Credit Agreement includes a material adverse change clause that must be represented at each draw. The Credit Agreement contains covenants that include a limitation on sales of assets, mergers, change of ownership, liens and indebtedness, transactions with affiliates and dividends; and requires compliance with financial covenants including maximum leverage and minimum interest coverage ratios. We are in compliance with all required covenants as of December 31, 2013. The carrying values of our debt at December 31, 2013 and 2012 were $3.3 billion and $3.7 billion, respectively. The fair values of our debt at December 31, 2013 and 2012 were $3.4 billion and $3.8 billion, respectively. The fair value of our debt was computed based upon quotes received from financial institutions. We consider these to be “level 2” in the fair value hierarchy as outlined in the authoritative guidance for disclosures in connection with debt instruments. Aggregate maturities follow:
|  | (000s) |
2014 |  | $ | 99,312 |
2015 |  |  | 139,261 |
2016 |  |  | 2,804,569 |
2017 |  |  | 1,798 |
2018 |  |  | 251,893 |
Later |  |  | 12,241 |
Total |  | $ | 3,309,074 |

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- Definition The entire disclosure for long-term debt. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 22 -Article 5 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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