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LONG-TERM DEBT | 6 Months Ended
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Jun. 30, 2015
Debt Disclosure [Abstract] |
Debt Disclosure [Text Block] | 4. LONG-TERM DEBT: Long-term debt consists of the following:
|  | June 30, 2015 |  | December 31, 2014 |
|  | (Unaudited) |  |  |
|  | (In thousands) |
Senior bank term debt |  | $ | — |  | $ | 368,532 |
2015 Credit Facility |  |  | 350,000 |  |  | — |
9.25% Senior Subordinated Notes due February 2020 |  |  | 335,000 |  |  | 335,000 |
7.375% Senior Secured Notes due April 2022 |  |  | 350,000 |  |  | — |
Comcast Note due April 2019 |  |  | 11,872 |  |  | — |
10% Senior Secured TV One Notes due March 2016 |  |  | — |  |  | 119,000 |
Total debt |  |  | 1,046,872 |  |  | 822,532 |
Less: current portion of long-term debt |  |  | 2,625 |  |  | 3,829 |
Less: original issue discount |  |  | 23,299 |  |  | 9,088 |
Long-term debt, net |  | $ | 1,020,948 |  | $ | 809,615 |
2022 Notes and Current Credit Facilities On April 17, 2015, the Company closed its private offering of $350.0 million aggregate principal amount of 7.375% senior secured notes due 2022 (the “2022 Notes”). The 2022 Notes were offered at an original issue price of 100.0% plus accrued interest from April 17, 2015 and will mature on April 15, 2022. Interest on the 2022 Notes accrues at the rate of 7.375% per annum and is payable semiannually in arrears on April 15 and October 15, commencing on October 15, 2015. The 2022 Notes are guaranteed, jointly and severally, on a senior secured basis by the Company’s existing and future domestic subsidiaries, including TV One, that guarantee any of its new $350.0 million senior secured credit facility (the “2015 Credit Facility”) entered into concurrently with the closing of the Notes. The 2015 Credit Facility matures on December 31, 2018. At the Company’s election, the interest rate on borrowings under the 2015 Credit Facility is based on either (i) the then applicable base rate plus 3.5% (as defined in the 2015 Credit Facility) as, for any day, a rate per annum (rounded upward, if necessary, to the next 1/100th of 1%) equal to the greater of (a) the prime rate published in the Wall Street Journal, (b) 1/2 of 1% in excess rate of the overnight Federal Funds Rate at any given time and (c) the one-month LIBOR rate commencing on such day plus 1.00%), or (ii) the then applicable LIBOR rate plus 4.5% (as defined in the 2015 Credit Facility). The average interest rate was 4.78% for the three months ended June 30, 2015. Quarterly installments of 0.25%, or $875,000, of the principal balance on the term loan are payable on the last day of each March, June, September and December beginning on September 30, 2015. In connection with the closing of the financing transactions, the Company and the guarantor parties thereto entered into a Fourth Supplemental Indenture to the indenture governing the 2020 Notes. Pursuant to this Fourth Supplemental Indenture, TV One, which previously did not guarantee the 2020 Notes, became a guarantor under the 2020 Notes indentures. In addition, the provisions contained in the Third Supplemental Indenture previously disclosed in the Company’s Current Report on Form 8-K, filed April 1, 2015, which permitted the Company to complete the transactions became operative. The closing of the financing transactions caused a “Triggering Event” (as defined in the 2020 Notes Indenture) under the 2020 Notes Indenture and, as a result, the 2020 Notes became an unsecured obligation of the Company and the subsidiary guarantors and rank equal in right of payment with the Company’s other senior indebtedness. The Company used the net proceeds from the 2022 Notes, along with term loan borrowings under the 2015 Credit Facility, to refinance its existing senior secured credit facility, refinance $119.0 million in outstanding indebtedness of TV One and TV One Capital Corp. (“Capital Corp.”), finance the previously announced Comcast Buyout and pay the related accrued interest, premiums, fees and expenses associated therewith. The 2015 Credit Facility contains affirmative and negative covenants that the Company is required to comply with, including: (a) maintaining an interest coverage ratio of no less than:
§ | 1.25 to 1.00 on June 30, 2015 and the last day of each fiscal quarter thereafter.
(b) maintaining a senior leverage ratio of no greater than:
§ | 5.85 to 1.00 on June 30, 2015 and the last day of each fiscal quarter thereafter.
(c) limitations on:
§ | liens;
§ | sale of assets;
§ | payment of dividends; and
§ | mergers.
As of June 30, 2015, ratios calculated in accordance with the 2015 Credit Facility were as follows:
|  | As of |  |  |  |  |  |  |  |  |  |
|  | June |  |  | Covenant |  |  | Excess |  |
|  | 30, 2015 |  |  | Limit |  |  | Coverage |  |
Pro Forma Last Twelve Months Covenant EBITDA (In millions) |  | $ | 137.5 |  |  |  |  |  |  |  |  |  |
Pro Forma Last Twelve Months Interest Expense (In millions) |  | $ | 74.7 |  |  |  |  |  |  |  |  |  |
Senior Debt (In millions) |  | $ | 641.0 |  |  |  |  |  |  |  |  |  |
Interest Coverage |  |  |  |  |  |  |  |  |  |  |  |  |
Covenant EBITDA / Interest Expense |  |  | 1.84 | x |  |  | 1.25 | x |  |  | 0.59 | x |
Senior Leverage |  |  |  |  |  |  |  |  |  |  |  |  |
Senior Secured Debt / Covenant EBITDA |  |  | 4.66 | x |  |  | 5.85 | x |  |  | 1.19 | x |
EBITDA - Earnings before interest, taxes, depreciation and amortization |  |  |  |  |  |  |  |  |  |  |  |  |
Covenant EBITDA – EBITDA adjusted for certain other adjustments, as defined in the 2015 Credit Facility |  |  |  |  |  |  |  |  |  |  |  |  |
As of June 30, 2015, the Company was in compliance with all of its financial covenants under the 2015 Credit Facility. As of June 30, 2015, the Company had outstanding approximately $350.0 million on its 2015 Credit Facility. The original issue discount is being reflected as an adjustment to the carrying amount of the debt obligations and amortized to interest expense over the term of the credit facility. The Company has early adopted ASU 2015-03 during the three months ended June 30, 2015, resulting in approximately $8.3 million of net debt issuance costs presented as a direct deduction to the Company's long-term debt in the consolidated balance sheet as of June 30, 2015. The retrospective application of ASU 2015-03 decreased other intangible assets and long-term debt by approximately $6.9 million in the consolidated balance sheet as of December 31, 2014. 2011 Credit Facilities On March 31, 2011, the Company entered into a senior secured credit facility (the “2011 Credit Agreement”) with a syndicate of banks, and simultaneously borrowed $386.0 million to retire all outstanding obligations under the Company’s previous amended and restated credit agreement and to fund our obligation with respect to a capital call initiated by TV One. The total amount available under the 2011 Credit Agreement was $411.0 million, initially consisting of a $386.0 million term loan facility that matured on March 31, 2016, and a $25.0 million revolving loan facility that matured on March 31, 2015. Borrowings under the credit facilities were subject to compliance with certain covenants including, but not limited to, certain financial covenants. Proceeds from the credit facilities could be used for working capital, capital expenditures made in the ordinary course of business, its common stock repurchase program, permitted direct and indirect investments and other lawful corporate purposes. On December 19, 2012, the Company entered into an amendment to the 2011 Credit Agreement (the “December 2012 Amendment”). The December 2012 Amendment: (i) modified financial covenant levels with respect to the Company's total-leverage, secured-leverage, and interest-coverage ratios; (ii) increased the amount of cash the Company can net for determination of its net indebtedness tests; and (iii) extended the time for certain of the 2011 Credit Agreement's call premium while reducing the time for its later and lower premium. On January 21, 2015, the Company entered into a second amendment to the 2011 Credit Agreement (the “Second Amendment”) with its lenders. The provisions of the 2011 Credit Agreement relating to the call premium were revised by the Second Amendment to extend the call protection from April 1, 2015 until maturity. The Second Amendment provided a call premium of 101.5% if the 2011 Credit Agreement were refinanced with proceeds from a notes offering and 100.5% if the 2011 Credit Agreement was refinanced with proceeds from any other repayment, including proceeds from a new term loan. The call premium was payable at the earlier of any refinancing or final maturity. The Second Amendment also excluded any “going concern” or qualified audit opinion solely as a result of the upcoming revolver or term loan maturities from the Event of Default provisions of the 2011 Credit Agreement. Next, the Second Amendment provided for the ability to “amend and extend” both the term loan and the revolving credit facility provided for by the 2011 Credit Agreement and added a $2 million lien basket for letters of credit not issued under the 2011 Credit Agreement. Finally, beginning with the quarter ending March 31, 2015, the Second Amendment implemented certain changes to the financial covenants the Company was required to comply with in order to remain in compliance with the terms of the 2011 Credit Agreement. As noted above, the Company used the net proceeds from the private offering, along with term loan borrowings under the 2015 Credit Facility, to refinance its 2011 Credit Agreement, as amended. The Company recorded a loss on retirement of debt of approximately $7.1 million for the three months ended June 30, 2015. This amount included a write-off of approximately $1.3 million of previously capitalized debt financing costs, a write-off of $844,000 of original issue discount associated with the 2011 Credit Agreement, as amended, as well as $827,000 associated with the call premium to refinance the credit facility, $106,000 associated with the consent to the existing holders of the 2020 Notes and approximately $4.0 million of costs associated with the financing transactions. The 2011 Credit Agreement, as amended on December 19, 2012 and January 21, 2015, contained affirmative and negative covenants that the Company was required to comply with. In accordance with the 2011 Credit Agreement, as amended, the calculations for the ratios did not include the operating results or related debt of TV One, but rather included our proportionate share of cash dividends received from TV One for periods presented. Under the terms of the 2011 Credit Agreement, as amended, interest on base rate loans was payable quarterly and interest on LIBOR loans was payable monthly or quarterly. The base rate was equal to the greater of: (i) the prime rate; (ii) the Federal Funds Effective Rate plus 0.50%; or (iii) the LIBOR Rate for a one-month period plus 1.00%. The applicable margin on the 2011 Credit Agreement was between (i) 4.50% and 5.50% on the revolving portion of the facility and (ii) 5.00% (with a base rate floor of 2.5% per annum) and 6.00% (with a LIBOR floor of 1.5% per annum) on the term portion of the facility. The average interest rate was 7.50% for the first quarter of 2015 prior to the refinancing. Quarterly installments of 0.25%, or $957,000, of the principal balance on the term loan were payable on the last day of each March, June, September and December. On February 24, 2015, the Company entered into a letter of credit reimbursement and security agreement. As of June 30, 2015, the Company had letters of credit totaling $1.0 million under the agreement. Letters of credit issued under the agreement are required to be collateralized with cash. During the three and six months ended June 30, 2015, the Company repaid approximately $367.6 million and $368.5 million, respectively, under the 2011 Credit Agreement, as amended. During the three and six months ended June 30, 2014, the Company repaid approximately $2.0 million and $3.0 million, respectively, under the 2011 Credit Agreement, as amended. The original issue discount was being reflected as an adjustment to the carrying amount of the debt obligations and amortized to interest expense over the term of the credit facility. According to the terms of the Credit Agreement, as amended, the Company did not make an excess cash flow payment in April 2015. According to the terms of the Credit Agreement, as amended, the Company made an excess cash flow payment of approximately $1.1 million during April 2014. Senior Subordinated Notes On November 24, 2010, we issued $286.8 million of our 12.5%/15% Senior Subordinated Notes due May 2016 (the “2016 Notes”) in a private placement and exchanged and then cancelled approximately $97.0 million of $101.5 million in aggregate principal amount outstanding of our 87/8% senior subordinated notes due 2011 (the “2011 Notes”) and approximately $199.3 million of $200.0 million in aggregate principal amount outstanding of our 63/8% Senior Subordinated Notes that matured in February 2013 (the “2013 Notes” and the 2013 Notes together with the 2011 Notes, the “Prior Notes”). Subsequently, we repurchased or redeemed all remaining Prior Notes pursuant to the terms of their respective indentures. Effective March 13, 2014, the Company repurchased or otherwise redeemed all of the amounts outstanding under the 2016 Notes using proceeds from our 2020 Notes (defined below). The Company recorded a loss on retirement of debt of approximately $5.7 million during the first quarter of 2014. This amount included a write-off of approximately $4.1 million of previously capitalized debt financing costs and approximately $1.6 million associated with the net premium paid to retire the 2016 Notes. Interest on the 2016 Notes, that the Company repurchased or otherwise redeemed in March 2014, was initially payable in cash, or at our election, partially in cash and partially through the issuance of additional 2016 Notes (a “PIK Election”) on a quarterly basis in arrears. For fiscal 2014, interest accrued at a rate of 12.5% and was payable in cash. On February 10, 2014, the Company closed a private placement offering of $335.0 million aggregate principal amount of 9.25% senior subordinated notes due 2020 (the “2020 Notes”). The 2020 Notes were offered at an original issue price of 100.0% plus accrued interest from February 10, 2014. The 2020 Notes mature on February 15, 2020. Interest accrues at the rate of 9.25% per annum and is payable semiannually in arrears on February 15 and August 15 in the amount of approximately $15.5 million, commencing on August 15, 2014. The 2020 Notes are guaranteed by certain of the Company’s existing and future domestic subsidiaries and any other subsidiaries that guarantee the existing senior credit facility or any of the Issuer's other syndicated bank indebtedness or capital markets securities. The Company used the net proceeds from the offering to repurchase or otherwise redeem all of the amounts currently outstanding under its 2016 Notes and to pay the related accrued interest, premiums, fees and expenses associated therewith. As of June 30, 2015, the Company had $335.0 million of our 2020 Notes outstanding. During the six months ended June 30, 2014, the Company capitalized approximately $4.5 million of costs associated with our 2020 Notes. The indenture that governs the 2020 Notes contains covenants that restrict, among other things, the ability of the Company to incur additional debt, purchase common stock, make capital expenditures, make investments or other restricted payments, swap or sell assets, engage in transactions with related parties, secure non-senior debt with assets, or merge, consolidate or sell all or substantially all of its assets. TV One Senior Secured Notes TV One issued $119.0 million in senior secured notes on February 25, 2011. The proceeds from the notes were used to purchase equity interests from certain financial investors and TV One management. The notes bore interest at 10.0% per annum, which was payable monthly, and the entire principal amount was due on March 15, 2016. In connection with the closing of the financing transactions on April 17, 2015, the TV One senior secured notes were repaid. Comcast Note The Company also has outstanding our new senior unsecured promissory note in the aggregate principal amount of approximately $11.9 million due to Comcast. The Comcast Note bears interest at 10.47%, is payable quarterly in arrears, and the entire principal amount is due on April 17, 2019. The Company conducts a portion of its business through its subsidiaries. Certain of the Company’s subsidiaries have fully and unconditionally guaranteed the Company’s 2022 Notes, 2020 Notes and the Company’s obligations under the 2015 Credit Facility. Future scheduled minimum principal payments of debt as of June 30, 2015, are as follows:
|  |  |  |  |  | 9.25% Senior |  | 7.375% Senior |  |  |
|  |  |  |  |  | Subordinated |  | Secured |  |  |
|  | Comcast Note due April 2019 |  | 2015 Credit Facility |  | Notes due February 2020 |  | Notes due April 2022 |  | Total |
|  | (In thousands) |
July – December 2015 |  | $ | — |  | $ | 2,625 |  | $ | — |  | $ | — |  | $ | 2,625 |
2016 |  |  | — |  |  | 3,500 |  |  | — |  |  | — |  |  | 3,500 |
2017 |  |  | — |  |  | 3,500 |  |  | — |  |  | — |  |  | 3,500 |
2018 |  |  | — |  |  | 340,375 |  |  | — |  |  | — |  |  | 340,375 |
2019 |  |  | 11,872 |  |  | — |  |  | — |  |  | — |  |  | 11,872 |
2020 |  |  | — |  |  | — |  |  | 335,000 |  |  | — |  |  | 335,000 |
2021 and thereafter |  |  | — |  |  | — |  |  | — |  |  | 350,000 |  |  | 350,000 |
Total Debt |  | $ | 11,872 |  | $ | 350,000 |  | $ | 335,000 |  | $ | 350,000 |  | $ | 1,046,872 |

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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 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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