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Debt Obligations | 9 Months Ended
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Sep. 30, 2013
Debt Disclosure [Abstract] |
Debt Obligations | Debt Obligations The following table sets forth the Company's outstanding debt obligations on the consolidated balance sheets at September 30, 2013 and December 31, 2012.
|  | Interest Rates | Carrying Value
| Maturity | At September 30, 2013 | At December 31, 2012 | At September 30, 2013 | At December 31, 2012
|  |  |  | (in millions)
Senior secured credit facilities |  |  |  |  |
SuperMedia Inc. | December 31, 2016 | 11.6 | % | 11.0 | % | $ | 1,023 |  | $ | — |
R.H. Donnelly Inc. | December 31, 2016 | 9.75 | % | 9.0 | % | 708 |  | 776 |
Dex Media East, Inc. | December 31, 2016 | 6.0 | % | 2.8 | % | 455 |  | 516 |
Dex Media West, Inc. | December 31, 2016 | 8.0 | % | 7.0 | % | 429 |  | 498 |
Senior subordinated notes | January 29, 2017 | 14.0 | % | 14.0 | % | 236 |  | 220 |
Total debt |  |  |  | 2,851 |  | 2,010 |
Less: current maturities of long-term debt |  |  | 160 |  | 2,010 |
Long-term debt |  |  |  | $ | 2,691 |  | $ | — |
As a result of the merger and adoption of acquisition accounting on April 30, 2013, SuperMedia's debt obligation was recorded at its fair value of $1,082 million, from its face value of $1,442 million, resulting in a discount of $360 million. This debt fair value adjustment will be amortized as an increase to interest expense over the remaining term of the SuperMedia debt obligation using the effective interest method and does not impact future interest or principal payments. Amortization of the SuperMedia debt fair value adjustment included an increase to interest expense of $17 million and $28 million during the three and nine months ended September 30, 2013. The unamortized portion of the SuperMedia discount as of September 30, 2013 was $332 million. In conjunction with Dex One's adoption of fresh start accounting, after bankruptcy emergence on February 1, 2010, an adjustment was recorded to reflect Dex One's outstanding debt obligation at its fair value. A total discount of $120 million was recorded and was amortized as an increase to interest expense, until our next filing for bankruptcy on March 18, 2013, to effectuate the merger. As a result of filing for bankruptcy, Dex One's debt obligations were classified as liabilities subject to compromise at March 31, 2013. As discussed in Note 5, the Company recognized the remaining unamortized debt fair value adjustments associated with Dex One's debt obligations of $32 million as a reorganization item on the consolidated statement of comprehensive income (loss) for the nine months ended September 30, 2013, which resulted in the adjustment of the carrying amounts of Dex One's debt obligations, to its face value. The filing of bankruptcy on March 18, 2013 triggered an event of default that rendered the remaining debt obligations of Dex One immediately due and payable. Any efforts to enforce the immediate payment of its debt obligations were stayed as a result of filing bankruptcy. However, since the Bankruptcy Court had the ability to approve a motion to enforce the immediate payment provisions during that time, we classified the Dex One debt obligations as current maturities of long-term debt at December 31, 2012. Senior Secured Credit Facilities In connection with the consummation of the Prepackaged Plans and the merger between Dex One and SuperMedia, on April 30, 2013, Dex Media entered into an amended and restated loan agreement for SuperMedia and three amended and restated loan agreements for each of Dex Media East, Inc. (“ DME”), Dex Media West, Inc. (“ DMW”) and R.H. Donnelley Inc. (“ RHDI ”) (collectively, the "senior secured credit facilities"), with named financial institutions and JPMorgan Chase Bank, N.A. as administrative agent and collateral agent under the SuperMedia, DME and DMW senior secured credit facilities, and Deutsche Bank Trust Company Americas as administrative agent and collateral agent under the RHDI senior secured credit facility. The administrative agents and financial institutions were the administrative agents and the lenders under Dex One's and SuperMedia's pre-existing senior secured credit facilities. Please refer to the Dex One Annual Report on Form 10-K and the SuperMedia Annual Report on Form 10-K for the year ended December 31, 2012 for detailed information regarding the terms and conditions of Dex One and SuperMedia debt obligations prior to the merger. SuperMedia Senior Secured Credit Facility The SuperMedia senior secured credit facility interest is paid (1) with respect to any base rate loan, quarterly, and (2) with respect to any Eurodollar loan, on the last day of the interest period applicable to such borrowing, at SuperMedia's option, at either:
• | With respect to base rate loans, the highest (subject to a floor of 4.00%) of (1) the prime rate, (2) the federal funds effective rate plus 0.50%, or (3) adjusted London Inter-Bank Offered Rate ("LIBOR") plus 1.00%, plus an interest rate margin of 7.60%, or
• | With respect to Eurodollar loans, the higher of (1) adjusted LIBOR or (2) 3.00%, plus an interest rate margin of 8.60%. SuperMedia may elect interest periods of one, two or three months for Eurodollar borrowings.
RHDI Senior Secured Credit Facility The RHDI senior secured credit facility interest is paid (1) with respect to any base rate loan, quarterly, and (2) with respect to any Eurodollar loan, on the last day of the interest period applicable to such borrowing (with certain exceptions for interest periods of more than three months), at RHDI's option, at either:
• | With respect to base rate loans, the highest (subject to a floor of 4.00%) of (1) the prime rate, (2) the federal funds effective rate plus 0.50%, or (3) adjusted LIBOR plus 1.00%, plus an interest rate margin of 5.75%, or
• | With respect to Eurodollar loans, the higher of (1) adjusted LIBOR or (2) 3.00%, plus an interest rate margin of 6.75%. RHDI may elect interest periods of one, two, three or six months for Eurodollar borrowings.
DME Senior Secured Facility The DME senior secured credit facility interest is paid (1) with respect to any base rate loan, quarterly, and (2) with respect to any Eurodollar loan, on the last day of the interest period applicable to such borrowing (with certain exceptions for interest periods of more than three months), at DME's option, at either:
• | With respect to base rate loans, the highest (subject to a floor of 4.00%) of (1) the prime rate, (2) the federal funds effective rate plus 0.50%, or (3) adjusted LIBOR plus 1.00%, plus an interest rate margin of 2.00%, or
• | With respect to Eurodollar loans, the higher of (1) adjusted LIBOR or (2) 3.00%, plus an interest rate margin of 3.00%. DME may elect interest periods of one, two, three or six months for Eurodollar borrowings.
DMW Senior Secured Credit Facility The DMW senior secured credit facility interest is paid (1) with respect to any base rate loan, quarterly, and (2) with respect to any Eurodollar loan, on the last day of the interest period applicable to such borrowing (with certain exceptions for interest periods of more than three months), at DMW's option, at either:
• | With respect to base rate loans, the highest (subject to a floor of 4.00%) of (1) the prime rate, (2) the federal funds effective rate, plus 0.50%, or (3) adjusted LIBOR, plus 1.00%, plus an interest rate margin of 4.00%, or
• | With respect to Eurodollar loans, the higher of (1) adjusted LIBOR or (2) 3.00%, plus an interest rate margin of 5.00%. DMW may elect interest periods of one, two, three or six months for Eurodollar borrowings.
Senior Subordinated Notes The Company's senior subordinated notes require interest payments, payable semi-annually on March 31 and September 30 of each year. The senior subordinated notes accrue interest at 12% for cash interest payments and 14% for payments-in-kind ("PIK") interest. PIK interest represents additional indebtedness and increases the aggregate principal amount owed. The Company is required to make interest payments of 50% in cash and 50% in PIK interest until maturity of the senior secured credit facilities on December 31, 2016. For the semi-annual interest period ending March 31, 2013 and September 30, 2013, the Company made interest payments of 50% in cash and 50% in PIK interest resulting in the issuance of an additional $16 million of senior subordinated notes. The Company is restricted from making open market repurchases of its senior subordinated notes until maturity of the senior secured credit facilities on December 31, 2016. Principal Payment Terms for Senior Secured Credit Facilities The Company has mandatory debt principal payments due after each quarter prior to the December 31, 2016 maturity date on its outstanding senior secured credit facilities. RHDI, DME and DMW are required to pay scheduled amortization payments, plus additional prepayments at par equal to each borrower's respective Excess Cash Flow ("ECF"), multiplied by the applicable ECF Sweep Percentage as defined in the respective senior secured credit facility (60% for RHDI, 50% for DMW, and 70% in 2013 and 2014 and 60% in 2015 and 2016 for DME). SuperMedia is required to make prepayments at par in an amount equal to 67.5% of any increase in Available Cash, as defined in its senior secured credit facility. In addition to these principal payments, the Company may on one or more occasions use another portion of the increase in ECF or Available Cash, as applicable to repurchase debt at market prices ("Voluntary Prepayments") at a discount of face value, as defined in the respective senior secured credit facility (12.5% for SuperMedia, 20% for RHDI, 30% for DMW, and 15% in 2013 and 2014 and 20% in 2015 and 2016 for DME) as determined following the end of each quarter. These Voluntary Prepayments must be made within 180 days after the date on which financial statements are delivered to the administrative agents. If a borrower does not make such Voluntary Prepayments within the 180-day period, the Company must make a prepayment at par at the end of the quarter during which such 180-day period expires. Any remaining portion of ECF or Available Cash, may be used at the Company's discretion, subject to certain restrictions specified in each senior secured credit facility agreement. 2013 and 2012 Principal Payments During the nine months ended September 30, 2013, the Company made mandatory and accelerated principal payments on its senior secured credit facilities at par of $210 million and $111 million, respectively, for total debt principal payments of $321 million. Accelerated principal payments consist of prepayments of cash flow sweep requirements under our senior secured credit facilities. During the nine months ended September 30, 2012, the Company made debt principal payments of $401 million, which reduced the Company's debt obligations by $545 million. On March 23, 2012, the Company utilized $70 million in cash to prepay $142 million of the senior secured credit facilities. This transaction resulted in the Company recording a non-taxable gain of $69 million ($72 million gain offset by $3 million in administrative fees and other adjustments). On April 19, 2012, the Company utilized $26 million in cash to prepay $98 million of the senior subordinated notes. This transaction resulted in the Company recording a non-taxable gain of $71 million ($72 million gain offset by $1 million in administrative fees). During the nine months ended September 30, 2012, the Company also made debt principal payments, at par, of $305 million. Debt Covenants Each of the senior secured credit facilities described above contain certain covenants that, subject to exceptions, limit or restrict each borrower's incurrence of liens, investments (including acquisitions), sales of assets, indebtedness, payment of dividends, distributions and payments of certain indebtedness, sale and leaseback transactions, swap transactions, affiliate transactions, capital expenditures and mergers, liquidations and consolidations. Each of the senior secured credit facilities also contain certain covenants that, subject to exceptions, limit or restrict each borrower's incurrence of liens, indebtedness, ownership of assets, sales of assets, payment of dividends or distributions or modifications of the senior subordinated notes. Each borrower is required to maintain compliance with a consolidated leverage ratio covenant and a consolidated interest coverage ratio covenant. The senior subordinated notes contain certain covenants that, subject to certain exceptions, among other things, limit or restrict the Company's (and, in certain cases, the Company's restricted subsidiaries) incurrence of indebtedness, making of certain restricted payments, incurrence of liens, entry into transactions with affiliates, conduct of its business and the merger, consolidation or sale of all or substantially all of its property. As of September 30, 2013, the Company is in compliance with all of the covenants associated with its senior secured credit facilities and senior subordinated notes. Guarantees Each of the senior secured credit facilities are separate facilities with no cross guarantees or collateralization provision among the entities, subject to certain exceptions. The Shared Guarantee and Collateral agreement has certain cross guarantee and collaterization provisions among RHDI, DME and DMW, but excludes SuperMedia. However, an event of default by one of the entities could trigger a call on the applicable guarantor. An event of default by a guarantor on a guarantee obligation could be an event of default under the applicable credit facility, and if demand is made under the guarantee and the creditor accelerates the indebtedness, failure to satisfy such claims in full would in turn trigger a default under all of the other credit facilities. A subordinated guarantee also provides that SuperMedia, RHDI, DME and DMW guarantees the obligations of the other such entities, including SuperMedia, provided that no claim may be made on such guarantee until the senior secured debt of such entity is satisfied and discharged.

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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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