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Long Term Debt

12 Months Ended

Dec. 31, 2012

Note 9: Long-Term Debt

The Company’s Long-term debt consists of the following at December 31, 2012 and 2011:


	2012		2011
6³/ ₄% Senior Notes due May 30, 2013	$	–	$	175,748
8% Senior Notes due November 15, 2016		272,025		271,255
7³/ ₄% Senior Debentures due June 1, 2027		200,000		200,000
7¹/₄% Senior Debentures due September 15, 2027		240,000		240,000
Fixed-rate debt		712,025		887,003
Revolving credit facility, including short-term unsecured notes		21,000		–
Total	$	733,025	$	887,003

The Company’s long-term debt maturities are as follows:


2013	$	–
2014		–
2015		–
2016		293,025
2017 and thereafter		440,000
Total	$	733,025

The combined weighted average effective interest rate for these debt instruments was 7.5 percent as of both December 31, 2012 and 2011. The weighted average effective interest rate for the fixed rate debt was 7.7 percent and 7.5 percent as of December 31, 2012 and 2011, respectively. At December 31, 2012 and 2011, the fair value of Belo’s fixed-rate debt was estimated to be $769,541 and $865,921, respectively. The Company’s publicly held long-term debt is classified as being derived from Level 2 inputs, because the fair value for these instruments is determined utilizing observable inputs in non-active markets.

On November 30, 2012, the Company redeemed the 6³/₄ % Senior Notes with a principal balance of $175,925. These notes were originally due May 30, 2013. The Company elected to redeem the notes early and on November 30, 2012, repaid the notes. The Company paid a premium of $5,529 and recorded a charge of $173 related to the write-off of debt issuance costs due to the early redemption.

On December 21, 2011, the Company entered into an Amended and Restated Competitive Advance and Revolving Credit Facility Agreement with JPMorgan Chase Bank, N.A., Suntrust Bank, Royal Bank of Canada, and other lenders, which matures upon expiration of the agreement on August 15, 2016 (the Credit Agreement). The Credit Agreement amended and restated the Company’s Prior Credit Agreement. The amendment reduced the total amount of the Credit Agreement to $200,000, extended the maturity date to August 15, 2016, and reduced the existing restrictions on dividend payments, share repurchases, investments and acquisitions and modified certain other terms and conditions. The Credit Agreement may be used for working capital and other general corporate purposes, including letters of credit. The Credit Agreement is guaranteed by the 100%-owned subsidiaries of the Company. Revolving credit borrowings under the Credit Agreement bear interest at a variable interest rate based on either LIBOR or a base rate, in either case plus an applicable margin that varies depending upon the Company’s leverage ratio. Commitment fees of up to 0.625 percent per year of the total unused commitment, depending on the Company’s leverage ratio, accrue and are payable under the facility.

The Company is required to maintain certain leverage and interest ratios specified in the agreement. The leverage ratio is generally defined as the ratio of debt to cash flow and the senior leverage ratio is generally defined as the ratio of the debt under the credit facility to cash flow. The interest coverage ratio is generally defined as the ratio of interest expense to cash flow. At December 31, 2012, the maximum allowed leverage ratios are as follows:


From	To	Maximum allowed leverage ratio
December 31, 2012	December 30, 2013		5.50
December 31, 2013	Thereafter		5.00

In addition, the Company is required to have an interest coverage ratio of not less than 2.0 and a senior leverage ratio of less than 1.0. While Belo was well within these limits at December 31, 2012, the failure in the future to comply with the covenants in the agreements governing the terms of our indebtedness could be an event of default which, if not cured or waived, would permit acceleration of all our indebtedness and payment obligations. The Prior Credit Agreement did not permit share repurchases. This restriction was eliminated in the Credit Agreement. The Credit Agreement contains additional covenants that are usual and customary for credit facilities of this type. The Credit Agreement allows the Company to pay dividends and repurchase shares up to $100,000 per year as long as the leverage ratio is less than 4.5 and the Company maintains $75,000 of liquidity after any such payment or repurchase is made. Repurchases of the Company’s bonds due in 2016 and 2027 are exempt from the $100,000 per year limitation. Redemption of the Company’s bonds due in 2013, which were retired early on November 30, 2012, was exempt from both the $100,000 per year limitation and the $75,000 liquidity restriction. At December 31, 2012, the Company had $21,000 outstanding under the Credit Agreement, the weighted average interest rate was 2.7 percent, and all unused borrowings were available. Additionally, the Company’s leverage ratio was 2.8, its interest coverage ratio was 3.8 and its senior leverage ratio was 0.1. At December 31, 2012, the Company was in compliance with all debt covenants.

At December 31, 2009, the Company had an Amended and Restated $460,750 Competitive Advance and Revolving Credit Facility Agreement with JPMorgan Chase Bank, N.A., J.P. Morgan Securities Inc., Banc of America Securities LLC, Bank of America, N.A. and other lenders, which was set to mature upon expiration of the agreement on December 31, 2012 (the Prior Credit Agreement). On August 20, 2010, the Company voluntarily reduced the commitment to $205,000. The facility was used for working capital and other general corporate purposes, including letters of credit. The Prior Credit Agreement was guaranteed by the 100%-owned subsidiaries of the Company. In connection with the decrease in capacity in 2010 mentioned above, the Company recorded a charge of $1,225 related to the write-off of debt issuance costs. This charge is included in interest expense.

During 2012, 2011 and 2010, cash paid for interest, net of amounts capitalized, was $68,051, $68,607 and $71,993, respectively. At December 31, 2012, Belo had outstanding letters of credit of $4,726 issued in the ordinary course of business.