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LONG-TERM DEBT (Block) | 9 Months Ended
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Sep. 30, 2018
Debt Disclosure [Abstract] |
Debt Disclosure Text Block | 6. LONG-TERM DEBT (A) Senior Debt The Credit Facility On November 17, 2017, in connection with the Merger, the Company refinanced its previously outstanding indebtedness and also assumed CBS Radio’s outstanding indebtedness. As a result of the refinancing activity and the Merger, the Company has a credit agreement (the “Credit Facility”) that is comprised of the Revolver and a term loan component (the “Term B-1 Loan”). The $250.0 million Revolver has a maturity date of November 17, 2022. The amount available under the Revolver, which includes the impact of outstanding letters of credit, was $41.0 million as of September 30, 2018. The $1,330.0 million Term B-1 Loan has a maturity date of November 17, 2024. The Term B-1 Loan amortizes: (i) with equal quarterly installments of principal in annual amounts equal to 1.0% of the original principal amount of the Term B-1 Loan; and (ii) mandatory yearly prepayments based up on a percentage of Excess Cash Flow as defined in the agreement. The Term B-1 Loan requires mandatory prepayments equal to a percentage of Excess Cash Flow, as defined within the agreement, subject to incremental step-downs, depending on the Consolidated Net Secured Leverage Ratio as defined in the agreement. The Excess Cash Flow payment, if any, will be due in the first quarter of each year, beginning with 2019, and is based on the Excess Cash Flow and Consolidated Net Secured Leverage Ratio for the prio r year. The Company expects to use the Revolver to: (i) pro vide for working capital; and (ii) provide for general corporate purposes, including capital expenditures and any or all of the following (subject to certain restrictions): repurchase of Class A common stock, dividends, investments and acquisitions. In addition, the Credit Facility is secured by a lien on substantially all of the assets (including material real property) of CBS Radio and its subsidiaries with limited exclusions. A ll of the Comp any’s subsidiaries, jointly and severally guaranteed the Credit Facility. The assets securing the Credit Facility are subject to customary release provisions which would enable the Company to sell such assets free and clear of encumbrance, subject to cert ain conditions and exceptions. The Credit Facility has usual and customary covenants including, but not limited to, a net secured leverage ratio, restricted payments and the incurrence of additional debt. Specifically, the Credit Facility requires the Com pany to comply with a certain financial covenant which is a defined term within the agreement, including a maximum Consolidated Net Secured Leverage Ratio that cannot exceed 4.0 times at September 30, 2018. In certain circ umstances, if the Company consummates additional acquisition activity permitted under the terms of the Credit Facility, the Consolidated Net Secured Leverage Ratio will be increased to 4.5 times for a one year period follow ing the consummation of such permitted acquisition. As of September 30, 2018, the Company’s Consolidated Net Secured Leverage Ratio was 3.7 times. Failure to comply with the Company’s financial covenant 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. The acceleration of the Company’s debt repayment 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. Management believes that over the next 12 months, the Company can continue to maintain compliance with its financial covenant. The Company’s opera ting 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 September 30, 2018, the Company is in compliance with the financial covenant and a ll other terms of the Credit Facility in all material respects. The Company’s ability to maintain compliance with its covenant is highly dependent on its results of operations. Management believes that cash on hand, borrowing capacity from the Revolver and cash from operating activities will be sufficient to permit the Company to meet its liquidity requirements over the next 12 months, including its debt repayments. The cash available from the Revolver is dependent on the Company’s Consolidated Net Secur ed Leverage Ratio at the time of such borrowing. Long-term debt was comprised of the following as of September 30, 2018:
|  |  |  | Long-Term Debt
|  |  |  | September 30, |  | December 31,
|  |  |  | 2018 |  | 2017
|  |  |  |  | (amounts in thousands)
| Credit Facility |  |  |  |  |  |
|  | Revolver, due November 17, 2022 |  | $ | 205,000 |  | $ | 143,000
|  | Term B-1 Loan, due November 17, 2024 |  |  | 1,320,025 |  |  | 1,330,000
|  | Plus unamortized premium |  |  | 2,578 |  |  | 2,904
|  |  |  |  | 1,527,603 |  |  | 1,475,904
| Senior Notes |  |  |  |  |  |
|  | 7.250% senior unsecured notes, due October 17, 2024 |  |  | 400,000 |  |  | 400,000
|  | Plus unamortized premium |  |  | 14,764 |  |  | 16,584
|  |  |  |  | 414,764 |  |  | 416,584
| Other Debt |  |  |  |  |
|  | Capital lease and other |  |  | 916 |  |  | 70
Total debt before deferred financing costs |  |  | 1,943,283 |  |  | 1,892,558
|  | Current amount of long-term debt |  |  | (13,319) |  |  | (13,319)
|  | Deferred financing costs (excludes the revolving credit) |  |  | (17,825) |  |  | (19,797)
Total long-term debt, net of current debt |  | $ | 1,912,139 |  | $ | 1,859,442
Outstanding standby letters of credit |  | $ | 3,987 |  | $ | 1,856
(B) Senior Unsecured Debt The Senior Notes Simultaneously with entering into the Merger and assuming the Credit Facility on November 17, 2017, the Company also assumed the 7.250% unsecured senior notes (the “Senior Notes”) that were subsequently modified and mature on October 17, 2024 in the amount of $400.0 million. The Senior Notes were originally issued by CBS Radio on October 17, 2016. The deferred financing costs and debt premium on the Seni or Notes will be amortized over the term under the effective interest rate method. As of any reporting period, the amount of any unamortized debt finance costs and debt premium costs are reflected on the balance sheet as a subtraction and an addition to t he $400.0 million liability, respectively. Interest on the Senior Notes accrues at the rate of 7.250% per annum and is payable semi-annually in arrears on May 1 and November 1 of eac h year. (C) Net Interest Expense The components of net interest expense are as follows:
|  | Net Interest Expense
|  | Nine Months Ended
|  | September 30,
|  | 2018 |  | 2017
|  | (amounts in thousands)
Interest expense |  | $ | 74,870 |  | $ | 16,913
Amortization of deferred financing costs |  |  | 2,389 |  |  | 1,752
Amortization of original issue discount (premium) of senior notes |  |  | (2,147) |  |  | -
Interest income and other investment income |  |  | (79) |  |  | (79)
Total net interest expense |  | $ | 75,033 |  | $ | 18,586
|  | Net Interest Expense
|  | Three Months Ended
|  | September 30,
|  | 2018 |  | 2017
|  |  | (amounts in thousands)
Interest expense |  | $ | 25,911 |  | $ | 5,920
Amortization of deferred financing costs |  |  | 798 |  |  | 586
Amortization of original issue discount (premium) of senior notes |  |  | (715) |  |  | -
Interest income and other investment income |  |  | (71) |  |  | (30)
Total net interest expense |  | $ | 25,923 |  | $ | 6,476

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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 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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