DIRECTV 2012 Annual Report Download - page 73

DIRECTV
increase in capital expenditures. The increase in capital expenditures resulted Revolving Credit Facilities
primarily from an increase in subscriber leased equipment, satellite and other On September 28, 2012, DIRECTV U.S.’ five year, $2.0 billion revolving
infrastructure primarily at DIRECTV Latin America. credit facility dated February 7, 2011 was terminated and replaced with a three and
one-half year, $1.0 billion revolving credit facility and a five year, $1.5 billion
Debt revolving credit facility. We pay a commitment fee of 0.15% per year for the
At December 31, 2012, we had $17,528 million in total outstanding unused commitment under the revolving credit facilities. Borrowings currently bear
borrowings, which consisted of senior notes and commercial paper issued by interest at a rate equal to the London Interbank Offer Rate (LIBOR) plus 1.25%.
DIRECTV U.S. Our outstanding borrowings are more fully described in Note 10 Both the commitment fee and the annual interest rate may increase or decrease
of the Notes to the Consolidated Financial Statements in Item 8, Part II of this under certain conditions due to changes in DIRECTV U.S.’ long-term, unsecured
Annual Report. debt ratings. Under certain conditions, DIRECTV U.S. may increase the borrowing
capacity of the revolving credit facilities by an aggregate amount of up to
Senior Notes. At December 31, 2012, DIRECTV U.S.’ senior notes had a $500 million. Aggregate amounts outstanding under the revolving credit facilities
carrying value of $17,170 million and a weighted-average interest rate of 4.60%. and the commercial paper program are limited to $2.5 billion. As of December 31,
Our senior notes payable mature as follows: $1,000 million in 2014, 2012, there were no borrowings under the new revolving credit facilities.
$1,200 million in 2015, $2,250 million in 2016, $1,250 million in 2017 and
Borrowings under the revolving credit facilities are unsecured senior obligations
$11,519 million thereafter.
of DIRECTV U.S. and will rank equally in right of payment with all of
Included in the amounts above are DIRECTV U.S.’ £750 million of 4.375% DIRECTV U.S.’ existing and future senior debt and will rank senior in right of
senior notes due in 2029. In connection with the issuance of these senior notes, payment to all of DIRECTV U.S.’ future subordinated debt, if any.
DIRECTV U.S. entered into cross-currency swaps to effectively convert its
fixed-rate British pound sterling denominated debt, including annual interest Covenants and Restrictions
payments and the payment of principal at maturity, to fixed-rate U.S. dollar
The revolving credit facilities require DIRECTV U.S. to maintain at the end
denominated debt. These cross-currency swaps are designated and qualify as cash
of each fiscal quarter a specified ratio of indebtedness to earnings before interest,
flow hedges. The terms of the cross-currency swap agreements correspond to the
taxes and depreciation and amortization. The revolving credit facilities also include
related hedged senior notes and the cross-currency swaps have maturities extending
covenants that restrict DIRECTV U.S.’ ability to, among other things, (i) incur
through September 2029.
additional subsidiary indebtedness, (ii) incur liens, (iii) enter into certain
In January 2013, DIRECTV U.S. issued $750 million of 1.750% senior notes transactions with affiliates, (iv) merge or consolidate with another entity, (v) sell,
due in 2018 with proceeds, net of original issue discount, of $743 million. assign, lease or otherwise dispose of all or substantially all of its assets, and
(vi) change its lines of business. Additionally, the senior notes contain restrictive
Commercial Paper. On November 27, 2012, DIRECTV U.S. established a covenants that are similar. Should DIRECTV U.S. fail to comply with these
commercial paper program backed by its revolving credit facilities, which provides covenants, all or a portion of its borrowings under the senior notes could become
for the issuance of short-term commercial paper in the United States up to a immediately payable and its revolving credit facilities could be terminated. At
maximum aggregate principal of $2.5 billion. As of December 31, 2012, we had December 31, 2012, management believes DIRECTV U.S. was in compliance with
$358 million of short-term commercial paper outstanding, with a weighted average all such covenants. The senior notes and revolving credit facilities also provide that
maturity of 90 days, at a weighted average yield of 0.54%, which may be the borrowings may be required to be prepaid if certain change-in-control events,
refinanced on a periodic basis as borrowings mature. coupled with a ratings decline, occur.
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