US Cellular 2013 Annual Report Download - page 67

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United States Cellular Corporation
Notes to Consolidated Financial Statements (Continued)
NOTE 10 DEBT (Continued)
The continued availability of the revolving credit facility requires U.S. Cellular to comply with certain
negative and affirmative covenants, maintain certain financial ratios and make representations regarding
certain matters at the time of each borrowing. U.S. Cellular believes it was in compliance as of
December 31, 2013 with all covenants and other requirements set forth in the revolving credit facility.
In connection with U.S. Cellular’s revolving credit facility, TDS and U.S. Cellular entered into a
subordination agreement dated December 17, 2010 together with the administrative agent for the lenders
under U.S. Cellular’s revolving credit agreement. Pursuant to this subordination agreement, (a) any
consolidated funded indebtedness from U.S. Cellular to TDS will be unsecured and (b) any
(i) consolidated funded indebtedness from U.S. Cellular to TDS (other than ‘‘refinancing indebtedness’’
as defined in the subordination agreement) in excess of $105,000,000, and (ii) refinancing indebtedness
in excess of $250,000,000, will be subordinated and made junior in right of payment to the prior payment
in full of obligations to the lenders under U.S. Cellular’s revolving credit agreement. As of December 31,
2013, U.S. Cellular had no outstanding consolidated funded indebtedness or refinancing indebtedness
that was subordinated to the revolving credit agreement pursuant to the subordination agreement.
At December 31, 2013, U.S. Cellular had recorded $2.7 million of issuance costs related to the revolving
credit facility which is included in Other assets and deferred charges in the Consolidated Balance Sheet.
Long-Term Debt
Long-term debt as of December 31, 2013 and 2012 was as follows:
December 31, Issuance date Maturity date Call date 2013 2012
(Dollars in thousands)
Unsecured Senior Notes
December 2003 December 2033 December 2003
6.7% ................... and June 2004 $544,000 $544,000
Less: 6.7% Unamortized
discount ............... (11,551) (11,806)
532,449 532,194
6.95% .................. May 2011 May 2060 May 2016 342,000 342,000
Obligation on capital leases ..... 3,749 4,756
Total long-term debt ........... $878,198 $878,950
Long-term debt, current ....... $ 166 $ 92
Long-term debt, noncurrent .... $878,032 $878,858
U.S. Cellular may redeem the 6.7% Senior Notes, in whole or in part, at any time prior to maturity at a
redemption price equal to the greater of (a) 100% of the principal amount of such notes, plus accrued
and unpaid interest, or (b) the sum of the present values of the remaining scheduled payments of
principal and interest thereon discounted to the redemption date on a semi-annual basis at the Treasury
Rate plus 30 basis points. U.S. Cellular may redeem the 6.95% Senior Notes, in whole or in part at any
time after the call date, at a redemption price equal to 100% of the principal amount redeemed plus
accrued and unpaid interest.
Interest on the 6.7% Senior Notes is payable semi-annually, and on the 6.95% Senior Notes is payable
quarterly.
Capitalized debt issuance costs for Unsecured Senior Notes totaled $16.3 million and are included in
Other assets and deferred charges (a long-term asset account). These costs are amortized over the life
of the notes using the effective interest method.
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