v3.3.1.900

LONG-TERM DEBT (Block) | 12 Months Ended
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Dec. 31, 2015
Debt Disclosure [Abstract] |
Debt Disclosure Text Block | 8. LONG-TERM DEBT Long-term debt, including financing method lease obligations, was comprised of the following:
|  |  | Long-Term Debt
|  |  | December 31,
|  |  | 2015 |  | 2014
|  |  |  | (amounts in thousands)
Credit Facility |  |  |  |  |  |
| Revolver, due November 23, 2016 |  | $ | 26,000 |  | $ | -
| Term B Loan, due November 23, 2018 |  |  | 242,750 |  |  | 262,000
Senior Notes |  |  |  |  |  |
| 10.5% senior unsecured notes, due December 1, 2019 |  |  | 220,000 |  |  | 220,000
| Total |  |  | 488,750 |  |  | 482,000
| Current amount of long-term debt |  |  | (31,832) |  |  | (3,000)
| Unamortized original issue discount |  |  | (1,731) |  |  | (2,071)
Total long-term debt |  | $ | 455,187 |  | $ | 476,929
Outstanding standby letter of credit |  | $ | 670 |  | $ | 620
(A) Senior Debt The Credit Facility As of December 31, 2015, the amount outstanding under the term loan component (the “Term B Loan”) of the Company’s senior secured credit facility (the “Credit Facility”) was $242.8 million and the amount outstanding under the revolving credit facility (the “Revolver”) of the Credit Facility was $26.0 million. The amount available under the Revolver, which includes the impact of outstanding letters of credit, was $13.3 million as of December 31, 2015. On November 23, 2011, the Company entered into a credit agreement with a syndicate of lenders for a $425 million Credit Facility that was initially comprised of: (a) a $50 million Revolver (reduced to $40 million in December 2015) that matures on November 23, 2016; and (b) a $375 million Term B Loan that matures on November 23, 2018. The Credit Facility is secured by a pledge of 100% of the capital stock and other equity interest in all of the Company’s wholly owned subsidiaries. In addition, the Credit Facility is secured by a lien on substantially all of the Company’s assets, with limited exclusions (including the Company’s real property). The assets securing the Credit Facility are subject t o customary release provisions which would enable the Company to sell such assets free and clear of encumbrance, subject to certain conditions and exceptions. The Term B Loan requires mandatory prepayments equal to 50% of Excess Cash Flow, as defined within the agreement, subject to incremental step-downs to 0%, de pending on the Consolidated Leverage Ratio. The Excess Cash Flow payment is due in the first quarter of each year and is based on the Excess Cash Flow and Leverage Ratio for the prior year. The Excess Cash Flow payment due in the first quarter of 2016, net of prepayment s made through December 31, 2015, is included under the current portion of long-term debt. The Company expects to fund the payment using cash from operating activities. Management believes that over the next 12 months the Company can continue to maintain compliance with its financial covenants. The Company’s operating cash flow is positive, and management believes that it is adequate to fund the Company’s operating needs and mandatory debt repayments under the Company’s Credit Facility. As of December 31, 2015, the Company is in compliance with all financial covenants and all ot her terms of the Credit Facility in all material respects. The Company’s ability to maintain compliance with its covenants is highly dependent on its results of operations. The amount outstanding under the Revolver as of December 31, 2015 was primarily used to partially fund an acquisition de scribed under Note 18. During December 2015, the Company reduced the total Revolver capacity from $50 million to $40 million. The Company anticipates that it will use funds from operations to fu lly retire the Revolver, which matures on November 23, 2016. Management believes that cash on hand and cash from operating activities will be sufficient to permit the Company to meet its liquidity req uirements over the next 12 months, including its debt repayments. The Credit Facility requires the Company to maintain compliance with certain financial covenants which are defined terms within the agreement, including: a maximum Consolidated Leverage Ratio that cannot exceed 4.75 times as of December 31, 201 5 and which decreases to 4.5 times as of March 31, 2016 and thereafter; and a minimum Consolidated Interest Coverage Ratio of 2.0 times as of D ecember 31, 201 5 and thereafter. The Term B Loan was last amended o n December 2, 2013 which reduc ed the interest rates. Under the December 2, 2013 amendment of the Term B Loan and depending on the Consolidated Leverage Ratio, the Company may elect an interest rate per annum equal to: (1) the Eurodollar London Interbank Offered Rate (“LIBOR”) plus fees of 3.0%; and (2) the Base Rate plus fees of 2.0%. The Term B Loan includes a LI BOR floor of 1.0%. Under the Revolver and depending on the Consolidated Leverage Ratio, the Company may elect an interest rate per annum equal to: (1) LIBOR plus fees that can range from 4.5% to 5.0%; or (2) the Base Rate plus fees that can range from 3.5% to 4.0%, where the Base Rate is the highest of: (a) the administrative agent’s prime rate; (b) t he Federal Funds Rate plus 0.5%; and (c) LIBOR plus 1.0%. In addition, the Revolver requires the Company to pay a commitment fee of 0.5% per annum for the unuse d amount of the Revolver. Failure to comply with the Company’s financial covenants or other terms of its Credit Facility and any subsequent failure to negotiate and obtain any required relief from its lenders could result in a default under the Company’s Credit Facility. Any event of default could have a material adverse effect on the Company’s business and financial condition. In addition, a default under either the Company’s Credit Facility or the indenture governing the Company’s Senior Notes could cause a cross default in the other instru ment and result in the acceleration of the maturity of all outstanding debt. T he acceleration of the Company’s debt could have a material adverse effect on its business. The Company may seek from time to time to amend its Credit Facility or obtain other funding or additional funding, which may result in higher interest rates. (B) Senior Unsecured Debt The Senior Notes The Senior Notes may be redeemed at any time on or after December 1, 2015 at a redemption price of 105.25% of the principal amount plus accrued interest. The redemption price decreases over time. O n November 23, 2011, the Company issued $220.0 million of 10.5% unsecured Senior Notes which matu re on December 1, 2019. The Company received net proceeds of $212.7 million, which include d a discount of $2.9 million, and incurred deferred financing costs of $6.1 million. These amounts are amortized over the term under the effective interest rate method. Interest on the Senior Notes is payable semi-annually in arrears on June 1 and Decemb er 1 of each year. The Senior Notes are in minimum denominations of $2,000. Th e Senior Notes are unsecured and rank: (1) senior in right of payment to the Company’s future subordinated debt; (2) equally in right of payment with all of the Company’s existing and future senior debt; (3) effectively subordinated to the Company’s existi ng and future secured debt (including the debt under the Company’s Credit Facility), to the extent of the value of the collateral securing such debt; and (4) structurally subordinated to all of the liabilities of the Company’s subsidiaries that do not guar antee the Senior Notes, to the extent of the assets of those subsidiaries. Financial statements of the subsidiaries are not included in accordance with Rule 3-10 of Regulation S-X as: (1) Entercom Communications Corp., after excluding all subsidiaries (the “Parent Company”), has no independent assets or operations; (2) Entercom Radio, LLC (“Radio”) is a 100% owned finance subsidiary of the Parent Company; (3) the Parent Company has guaranteed the Credit Facility and Senior Notes; (4) all of the Parent Company’s direct and indirect subsidiaries other than Radio have guaranteed the Credit Facility and Senior Notes; (5) all of the guarantees are full and unconditional (subject to the customary automatic release provisions); and (6) all of the guarantees are joint and several. Radio, which is a wholly owne d subsidiary of the Parent Company, holds the ownership interest in various subsidiary companies that own the operating assets, including broadcasting licenses, permits, authorizations and cash royalties. Radio is the borrower under the Credit Facility an d is the issuer of the Senior Notes. The assets securing both the Credit Facility and the Senior Notes are subject to customary release provisions which would enable the Company to sell such assets free and clear of encumbrance, subject to certain conditi ons and exceptions. Under certain covenants, the Company’s subsidiary guarantors are restricted from paying dividends or distributions in excess of amounts defined under the Senior Notes, and the subsidiary guarantors are limited in their ability to incu r additional indebtedness under certain restrictive covenants. See Note 21 for financial statements of the P arent Company. A default under the Company’s Senior Notes could cause a default under the Company’s Credit Facility. Any event of default, therefore, could have a material adverse effect on the Company’s business and financial condition. (C) Net Interest Expense The components of net interest expense are as follows:
|  | Net Interest Expense
|  | Years Ended December 31,
|  | 2015 |  | 2014 |  | 2013
|  | (amounts in thousands)
Interest expense |  | $ | 34,764 |  | $ | 34,656 |  | $ | 40,091
Amortization of deferred financing costs |  |  | 2,863 |  |  | 3,860 |  |  | 3,870
Amortization of original issue discount of senior notes |  |  | 340 |  |  | 305 |  |  | 274
Interest income and other investment income |  |  | (6) |  |  | - |  |  | (3)
Total net interest expense |  | $ | 37,961 |  | $ | 38,821 |  | $ | 44,232
The weighted average interest rate under the Credit Facility (before taking into account the fees on the unused portion of the Revolver) was: (1) 4.1% as of December 31, 2015; and (2) 4.0% as of December 31, 2014. (D) Interest Rate Transactions As of December 31, 2015 and 2014, there were no derivative interest rate transactions outstanding. The Company from time to time enters into interest rate transactions with different lenders to diversify its risk associated with interest rate fluctuations of its variable rate debt. Under these transactions, the Company agrees with other parties (participating members of the Company’s Credit Facility) to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts calculated by reference to an agreed notional principal amount against the variable debt. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. This process includes ongoing effectiveness assessments by relating all derivatives that are designated as fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company’s derivative activities, all of which are for purposes other than trading, are initiated within the guidelines of corporate risk-management policies. The Company reviews the correlation and effectiveness of its derivatives on a periodic basis. The Company’s credit exposure under these hedging agreements, or similar agreements the Company m ay enter into in the future, is the cost of replacing such agreements in the event of nonperformance by the Company’s counterparty. For those interest rate transactions that may be entered into with the same counterparty, the Company will enter into a mast er netting agreement that would allow, under certain circumstances, the Company a nd the counterparty to settle financial assets and liabilities on a net basis. (E) Aggregate Principal Maturities The minimum a ggregate principal maturities on the Company’s outstanding debt (excluding any impact from required principal payments based upon the Company’s future operating performance) are as follow s:
| Principal Debt Maturities
| Credit |  | Senior |  |  |
| Facility |  | Notes |  | Total
| (amounts in thousands)
Years ending December 31: |  |  |  |  |  |  |  |
2016 | $ | 31,832 |  | $ | - |  | $ | 31,832
2017 |  | 168 |  |  | - |  |  | 168
2018 |  | 236,750 |  |  | - |  |  | 236,750
2019 |  | - |  |  | 220,000 |  |  | 220,000
2020 |  | - |  |  | - |  |  | -
Thereafter |  | - |  |  | - |  |  | -
Total | $ | 268,750 |  | $ | 220,000 |  | $ | 488,750
(F) Outstanding Letters Of Credit The Company is required to maintain standby letters of credit in connection with insurance coverage as described in Note 20. (G) Guarantor and Non-Guarantor Financial Information Radio, which is a wholly owned subsidiary of Entercom Communications Corp., holds the ownership interest in various subsidiary companies that own the operating assets, including broadcasting licenses, permits and authorizations. Radio (1) is the borrower under the Credit Facility, as described in Note 8(A); and (2) is the issuer of the Senior Notes, as described in Note 8(B). As of December 31, 2015, Entercom Communications Corp. and each direct and indirect subsidiar y of Radio is a guarantor of Radio’s obligations under both the Credit Facility and the Senior Notes. Separate condensed consolidating financial information is not included as Entercom Communications Corp. does not have independent assets or operations, Radio is a 100% owned finance subsidiary of Entercom Communications Corp., and all guarantees by Entercom Communications Corp. and its guarantor subsidiaries are full, unconditional (subject to the customary automatic release provisions), joint and several under its Credit Facility and are full, unconditional, joint and several under its Senior Notes. Under the Credit Facility, Radio is permitted to make distributions to Entercom Communications Corp. in amounts as defined, which are required to pay Entercom Communications Corp.’s reasonable overhead costs, including income taxes and other costs associated with conducting the operations of Radio and its subsidiaries. Under the indenture governing the Senior Notes, Radio is permitted to make distributions to Entercom Communications Corp. in amounts, as defined, that are required to pay Entercom Communications Corp’s overhead costs and other costs associated with conducting the operations of Radio and its subsidiaries.

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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 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 + Details
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