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Debt | 12 Months Ended
--- | ---
Dec. 31, 2014
Disclosure Text Block |
Debt | NOTE 11 DEBT Revolving Credit Facilities At December 31, 2014, TDS and U.S. Cellular had revolving credit facilities available for general corporate purposes. Amounts under the revolving credit facilities may be borrowed, repaid and reborrowed from time to time until maturity. U.S. Cell ular borrowed and re p a i d amounts under its revolving credit facility in 2014. Neither TDS nor U.S. Cellular borrowed under their revolving credit facilit ies in 2013 or 2012 except for standby letters of credit. In certain circumstances, TDS' and U.S. Cellular's interest cost on their revolving credit facilities may be subject to increase if their current credit ratings from nationally recognized credit rating agencies are lowered, and may be subject to decrease if the ratings are raised. In 2014, certain nationally recognized credit rating agencies downgraded TDS and U.S. Cellular corporate and senior debt credit ratings. After these downgrades, TDS and U.S. Cellular are rated at sub-investment grade. As a result of these downgrades, the commitment fee on t he revolving credit facilities increased to 0.30% per annum. The downgrades also increased the interest rate on any borrowings by 0.25% per annum. The revolving credit facilities do not cease to be available nor do the maturity dates accelerate solely as a result of a downgrade in TDS' or U.S. Cellular's credit rating. However, downgrades in TDS' or U.S. Cellular's credit rating could adversely affect their ability to renew the revolving credit facilities or obtain access to other credit facilities in the future. The maturity date of any borrowings under the TDS and U.S. Cellular revolving credit facilities would accelerate in the event of a change in control.
The following table summarizes the terms of such revolving credit facilities as of December 31, 2014:
(Dollars in millions) | TDS |  |  | U.S. Cellular |
Maximum borrowing capacity | $ | 400.0 |  |  | $ | 300.0 |
Letters of credit outstanding | $ | 0.6 |  |  | $ | 17.5 |
Amount borrowed | $ | - |  |  | $ | - |
Amount available for use | $ | 399.4 |  |  | $ | 282.5 |
Borrowing rate: One-month London Interbank Offered Rate (“LIBOR”) plus contractual spread (1) |  | 1.92 | % |  |  | 1.92 | %
| Sample LIBOR Rate |  | 0.17 | % |  |  | 0.17 | %
| Contractual spread |  | 1.75 | % |  |  | 1.75 | %
Range of commitment fees on amount available for use (2) |  |  |  |  |  |  |
| Low |  | 0.13 | % |  |  | 0.13 | %
| High |  | 0.30 | % |  |  | 0.30 | %
Agreement date |  | December 2010 |  |  |  | December 2010 |
Maturity date |  | December 2017 |  |  |  | December 2017 |
Fees incurred attributable to the Revolving Credit Facility are as follows: |  |  |  |  |  |  |
| Fees incurred as a percent of Maximum borrowing capacity for 2014 |  | 0.42 | % |  |  | 0.42 | %
| Fees incurred, amount |  |  |  |  |  |  |
|  | 2014 | $ | 1.7 |  |  | $ | 1.3 |
|  | 2013 | $ | 0.9 |  |  | $ | 0.8 |
|  | 2012 | $ | 1.3 |  |  | $ | 1.1 |
(1) | Borrowings under the revolving credit facility bear interest at LIBOR plus a contractual spread based on TDS' or U.S. Cellular’s credit rating or, at TDS' or U.S. Cellular’s option, an alternate “Base Rate” as defined in the revolving credit agreement. TDS and U.S. Cellular may select a borrowing period of either one, two, three or six months (or other period of twelve months or less if requested by TDS or U.S. Cellular and approved by the lenders). If TDS or U.S. Cellular provides notice of intent to borrow the same business day, interest on borrowing is at the Base Rate plus the contractual spread.
(2) | The revolving credit facility has commitment fees based on the unsecured senior debt ratings assigned to TDS and U.S. Cellular by certain ratings agencies.
The continued availability of the revolving credit facilities requires TDS and U.S. Cellular to comply with certain negative and affirmative covenants, maintain certain financial ratios and make representations regarding certain matters at the time of each borrowing. TDS and U.S. Cellular believe they were in compliance as of December 31, 2014 with all covenants and other r equirements set forth in the revolving credit facilities. In connection with U.S. Cellular's revolving credit facility, TDS and U.S. Cellular entered into a subordination agreement dated December 17, 2010 together with the administrative agent for the l enders under U.S. Cellular's revolving credit agreement. Pursuant to this subordination agreement, (a) any consolidated funded indebtedness from U.S. Cellular to TDS will be unsecured and (b) any (i) consolidated funded indebtedness from U.S. Cellular to TDS (other than “refinancing indebtedness” as defined in the subordination agreement) in excess of $105,000,000, and (ii) refinancing indebtedness in excess of $250,000,000, will be subordinated and made junior in right of payment to the prior payment in full of obligations to the le nders under U.S. Cellular's revolving credit agreement. As of December 31, 2014, U.S. Cellular had no outstanding consolidated funded indebtedness or refinancing indebtedness that was subordinated to the revolving credit agreement pursuant to the subordination agreement. In July 2014, TDS and U.S. Cellular entered into amendments to the revolving credit facilities agreements which increased the Consolidated Leverage Ratio (the ratio of Consolidated Funded Indebtedness to Consolidated Earnings before interest, taxes, depreciation and amortization) that the companies are required to maintain. Beginning July 1, 2014, TDS and U.S. Cellular are required to maintain the Consolidated Leverage Ratio at a level not to exceed 3.75 to 1.00 for the period of the four fiscal quarters most recently ended (this was 3.00 to 1.00 prior to July 1, 2014). The terms of the amendment decrease the maximum permitted Consolidated Leverage Ratio beginning January 1, 2016, with further decreases effective July 1, 2016 and January 1, 2017 (and will return to 3.00 to 1.00 at that time). For t he twelve months ended December 3 1, 2014, the actual Consolidated Leverage Ratio was 2.50 to 1.00. Future changes in TDS' and U.S. Cellular's financial condition could negatively impact their ability to meet the financial covenants and requirements in their revolving credit facilities agreements. TDS also has certain other non-material credit facilities from time to time. A t December 31, 2014, TDS ha d recorded $5.4 million of issuance costs related to the revolving credit facilities which is included in Other assets and deferred charges in the Consolidated Balance Sheet.
Long Term Financing |  |  |  |  |  |  |  |  |  |  |
Long-term debt as of December 31, 2014 and 2013 was as follows:
|  |  |  |  |  |  |  | December 31,
(Dollars in thousands) | Issuance date |  | Maturity date |  | Call date |  | 2014 |  | 2013
TDS: |  |  |  |  |  |  |  |  |  |  |
|  | Unsecured Senior Notes |  |  |  |  |  |  |  |  |  |
|  |  | 6.625% | March 2005 |  | March 2045 |  | March 2010 |  | $ | 116,250 |  | $ | 116,250
|  |  | 6.875% | November 2010 |  | November 2059 |  | November 2015 |  |  | 225,000 |  |  | 225,000
|  |  | 7.0% | March 2011 |  | March 2060 |  | March 2016 |  |  | 300,000 |  |  | 300,000
|  |  | 5.875% | November 2012 |  | December 2061 |  | December 2017 |  |  | 195,000 |  |  | 195,000
|  | Purchase contract at 6.0% | October 2001 |  | October 2021 |  |  |  |  | 1,097 |  |  | 1,097
|  |  |  | Total Parent |  |  |  |  |  |  |  | 837,347 |  |  | 837,347
Subsidiaries: |  |  |  |  |  |  |  |  |  |  |
| U.S. Cellular - |  |  |  |  |  |  |  |  |  |  |
|  | Unsecured Senior Notes |  |  |  |  |  |  |  |  |  |
|  |  | 6.7% | December 2003 and June 2004 |  | December 2033 |  | December 2003 |  |  | 544,000 |  |  | 544,000
|  |  | Less: 6.7% Unamortized discount |  |  |  |  |  |  |  | (11,278) |  |  | (11,551)
|  |  |  |  |  |  |  |  |  |  |  | 532,722 |  |  | 532,449
|  |  | 6.95% | May 2011 |  | May 2060 |  | May 2016 |  |  | 342,000 |  |  | 342,000
|  |  | 7.25% | December 2014 |  | December 2063 |  | December 2019 |  |  | 275,000 |  |  | -
|  | Obligation on capital leases |  |  |  |  |  |  |  | 2,143 |  |  | 3,749
| TDS Telecom - |  |  |  |  |  |  |  |  |  |  |
|  | Rural Utilities Service (“RUS”) and other notes |  |  |  |  |  |  | 699 |  |  | 749
|  | Obligation on capital leases |  |  |  |  |  |  | 768 |  |  | 779
| Other - |  |  |  |  |  |  |  |  |  |  |
|  | Long-term notes, 3.7% to 4.8% |  |  | Through 2016 |  |  |  |  | 3,686 |  |  | 4,612
|  | Obligation on capital leases |  |  |  |  |  |  |  | 29 |  |  | 35
|  |  |  | Total Subsidiaries |  |  |  |  |  |  |  | 1,157,047 |  |  | 884,373
Total long-term debt |  |  |  |  |  |  | $ | 1,994,394 |  | $ | 1,721,720
|  | Long-term debt, current |  |  |  |  |  |  | $ | 808 |  | $ | 1,646
|  | Long-term debt, noncurrent |  |  |  |  |  |  | $ | 1,993,586 |  | $ | 1,720,074
TDS may redeem its callable notes and U.S. Cellular may redeem its 6.95% Senior Notes and 7.25% Senior Notes, in whole or in part at any time after the respective call date, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest. U.S. Cellular may redeem the 6.7% Senior Notes, in whole or in part, at any time prior to maturity at a redemption price equal to the greater of (a) 100% of the principal amount of such notes, plus accrued and unpaid interest, or (b) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date on a semi-annual basis at the Treasury Rate plus 30 basis points. Interest on the notes is payable quarterly on Senior Notes outstanding at December 31, 2014, with the exception of U.S. Cellular's 6.7% note in which interest is payable semi-annually. Capitalized debt issuance costs for Unsecured Senior Notes totaled $53.9 million a nd are included in Other assets and deferred charges (a long-term asset account). These costs are amortized over the life of the notes using the effective interest method. The annual requirements for principal payments on long-term debt are approximately $0.8 million, $3.8 million, $0.1 million, $0.1 million and $0.1 million for the years 201 5 through 201 9, respectively. The covenants associated with TDS and its subsidiaries' long-term debt obligations, among other things, restrict TDS' ability, subject to certain exclusions, to incur additional liens, enter into sale and leaseback transactions, and sell, consolidate or merge assets. TDS' long-term debt indentures do not contain any provisions resulting in acceleration of the maturities of outstanding debt in the event of a change in TDS' credit rating. However, a downgrade in TDS' credit rating could adversely affect its ability to obtain long-term debt financing in the future. Term Loan Facility On January 21, 2015, U.S. Cellular entered into a term loan credit facility relating to $225.0 million in debt. The term loan must be drawn in one or more advances by the six month anniversary of the date of the agreement; amounts not drawn by that time will cease to be available. Amounts repaid or prepaid under the term loan facility may not be reborrowed. The term loan is available for general corporate purp oses, including working capital, spectrum purchases and capital expenditures. The term loa n is unsecured except for a lien on all investments in equity which U.S. Cellular may have in the loan administrative agent, CoBank ACB, subject to certain limitations. In certain circumstances, U.S. Cellular's interest cost on its term loan may be subject to increase if its current credit ratings from nationally recognized credit rating agencies are lowered, and may be subject to decrease if the ratings are raised. The term loan facility does not cease to be available nor does the maturity date accelerate solely as a result of a downgrade in U.S. Cellular's credit rating. However, downgrades in U.S. Cellular's credit rating could adversely affect its ability to renew or obtain access to credit facilities in the future. The maturity date of term loan would accelerate in the event of a change in control.
The following table summarizes the terms of the term loan facility as of February 25, 2015:
(Dollars in millions) |  |  |
Maximum borrowing capacity | $ | 225.0 |
Amount borrowed | $ | - |
Amount available for use | $ | 225.0 |
Hypothetical Borrowing rate: One-month London Interbank Offered Rate ("LIBOR") plus contractual spread (1) |  | 2.67 | %
| Sample LIBOR Rate |  | 0.17 | %
| Contractual spread |  | 2.5 | %
Range of commitment fees on amount available for use (2) |  |  |
| Low |  | 0.13 | %
| High |  | 0.30 | %
Agreement date |  | January 21, 2015 |
Maturity date (3) |  | January 21, 2022 |
(1) | Borrowings under the term loan credit facility bear interest at LIBOR plus a contractual spread based on U.S. Cellular’s credit rating or, at U.S. Cellular’s option, an alternate “Base Rate” as defined in the term loan facility.
(2) | The term loan credit facility has commitment fees based on the unsecured senior debt ratings assigned to U.S. Cellular by certain ratings agencies.
(3) | Principal amounts outstanding on the term loan facility will be due and payable quarterly in equal installments beginning on the last day of the fifth fiscal quarter ending after the agreement date, in an amount equal to 1.25% of the aggregate term loan facility commitment. Any amounts owing under the term loan facility not previously repaid will be due and payable on the maturity date.
The continued availability of the term loan facility requires U.S. Cellular to comply with certain negative and affirmative covenants, maintain certain financial ratios and make representations regarding certain matters at the time of each borrowing, that are substantially the same as those in the U.S. Cellular revolving credit facility described above. In connection with U.S. Cellular's term credit facility, TDS and U.S. Cellular entered into a subordi nation agreement dated January 21, 2015 together with the administrative agent for the lenders under U.S. Cellular's term loan credit agreement, which is substantially the same as the subordination agreement in the U.S. Cellular revolving credit facility described above. As of February 25, 2015, U.S. Cellular had no outstanding consolidated funded indebtedness or refinancing indebtedness that was subordinated to the term loan facility pursuant to this subordination agreement.

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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 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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