Long-Term Debt (Notes) | 12 Months Ended |
Dec. 31, 2013 |
Long-Term Debt Disclosure [Abstract] | ' |
Long-Term Debt | ' |
Long-term Debt |
Obligations in the form of senior notes and borrowings under the credit facilities are as follows: |
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| December 31, |
| 2013 | | 2012 |
Senior notes | $ | 2,800 | | | $ | 1,965 | |
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Revolving loans | 510 | | | 192 | |
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Total | 3,310 | | | 2,157 | |
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Less: current portion | — | | | — | |
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Long-term debt | $ | 3,310 | | | $ | 2,157 | |
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Availability under revolving credit facility: | | | |
Total credit facility limit | $ | 1,200 | | | $ | 1,150 | |
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Revolving loans | (510 | ) | | (192 | ) |
Letters of credit | (14 | ) | | (12 | ) |
Total available | $ | 676 | | | $ | 946 | |
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Long-term debt maturities as of December 31, 2013 for each of the next five years are as follows: |
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Year Ended December 31, | Amount | | | | |
2014 | $ | — | | | | | |
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2015 | — | | | | | |
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2016 | — | | | | | |
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2017 | — | | | | | |
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2018 | 600 | | | | | |
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Thereafter | 2,710 | | | | | |
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Total | $ | 3,310 | | | | | |
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Revolving Credit Facility |
In the year ended December 31, 2013, 2012 and 2011 the Partnership borrowed $1.46 billion, $1.56 billion and $940 million, respectively, under its revolving credit facility; these borrowings were to fund capital expenditures and acquisitions. During the same periods, the Partnership repaid $1.1 billion, $1.70 billion and $893 million, respectively, with proceeds from equity offerings and issuances of senior notes. |
In May 2013, RGS entered into the Sixth Amended and Restated Credit Agreement to increase the commitment to $1.2 billion with a $300 million uncommitted incremental facility and extended the maturity date to May 21, 2018. The material differences between the Fifth and Sixth Amended and Restated Credit Agreement include: |
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• | A 75 bps decrease in pricing, with an additional 50 bps decrease upon the achievement of an investment grade rating; | | | | | | |
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• | No limitation on the maximum amount that the loan parties may invest in joint ventures existing on the date of the credit agreement so long as the Partnership is in pro forma compliance with the financial covenants; | | | | | | |
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• | The addition of a “Restricted Subsidiary” structure such that certain designated subsidiaries are not subject to the credit facility covenants and do not guarantee the obligations thereunder or pledge their assets in support thereof; | | | | | | |
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• | The addition of provisions such that upon the achievement of an investment grade rating by the Partnership, the collateral package will be released; the facility will become unsecured; and the covenant package will be significantly reduced; | | | | | | |
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• | An eight-quarter increase in the permitted Total Leverage Ratio; and | | | | | | |
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• | After March 2015, an increase in the permitted total leverage ratio for the two fiscal quarters following any $50 million or greater acquisition. | | | | | | |
The Partnership capitalized $6 million of net loan fees which is being amortized over the remaining term. |
The revolving credit facility and the guarantees are senior to the Partnership’s and the guarantors’ unsecured obligations, to the extent of the value of the assets securing such obligations. |
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As of December 31, 2013, the Partnership was in compliance in all material respects with all of the financial covenants contained within the new credit agreement. |
The outstanding balance under the revolving credit facility bears interest at LIBOR plus a margin or alternate base rate (equivalent to the U.S. prime lending rate) plus a margin, or a combination of both. The alternate base rate used to calculate interest on base rate loans will be calculated based on the greatest to occur of a base rate, a federal funds effective rate plus 0.50% and an adjusted one-month LIBOR rate plus 1.00%. The applicable margin shall range from 0.625% to 1.50% for base rate loans, 1.625% to 2.50% for Eurodollar loans. The weighted average interest rate on the total amounts outstanding under the Partnership’s revolving credit facility was 2.17% and 2.93% as of December 31, 2013 and 2012, respectively. |
RGS must pay (i) a commitment fee ranging from 0.30% to 0.45% per annum of the unused portion of the revolving loan commitments, (ii) a participation fee for each revolving lender participating in letters of credit ranging from 1.625% to 2.50% per annum of the average daily amount of such lender’s letter of credit exposure and (iii) a fronting fee to the issuing bank of letters of credit equal to 0.20% per annum of the average daily amount of the letter of credit exposure. These fees are included in interest expense, net in the consolidated statement of operations. |
The revolving credit facility contains financial covenants requiring RGS and its subsidiaries to maintain a debt to consolidated EBITDA (as defined in the credit agreement) ratio less than 5.00 for the first eight quarters (after March 2015, an increase is allowed in the permitted total leverage ratio for the first two fiscal quarters following any $50 million or greater acquisition), consolidated EBITDA to consolidated interest expense ratio greater than 2.50 and a secured debt to consolidated EBITDA ratio less than 3.25. At December 31, 2013 and 2012, RGS and its subsidiaries were in compliance with these covenants. |
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The revolving credit facility restricts the ability of RGS to pay dividends and distributions other than reimbursements of the Partnership for expenses and payment of dividends to the Partnership to the amount of available cash (as defined) so long as no default or event of default has occurred or is continuing. The revolving credit facility also contains various covenants that limit (subject to certain exceptions), among other things, the ability of RGS to: |
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• | incur indebtedness; | | | | | | |
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• | grant liens; | | | | | | |
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• | enter into sale and leaseback transactions; | | | | | | |
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• | make certain investments, loans and advances; | | | | | | |
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• | dissolve or enter into a merger or consolidation; | | | | | | |
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• | enter into asset sales or make acquisitions; | | | | | | |
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• | enter into transactions with affiliates; | | | | | | |
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• | prepay other indebtedness or amend organizational documents or transactions documents (as defined in the revolving credit facility); | | | | | | |
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• | issue capital stock or create subsidiaries; or | | | | | | |
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• | engage in any business other than those businesses in which it was engaged at the time of the effectiveness of the revolving credit facility or reasonable extension thereof. | | | | | | |
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In February 2014, RGS entered into the first Amendment to the Sixth Amended and restated Credit Agreement to, among other things, expressly permit the pending PVR and Eagle Rock acquisitions, and to increase the commitment to $1.5 billion and increase the uncommitted incremental facility to $500 million. The amendment will specifically allows the Partnership to assume the series of PVR senior notes that mature prior to the credit agreement. |
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Senior Notes |
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In May 2009, the Partnership and Finance Corp. issued $250 million of senior notes that mature on June 1, 2016 (the “2016 Notes”). The 2016 Notes bear interest at 9.375% with interest payable semi-annually in arrears on June 1 and December 1. In May 2012, the Partnership redeemed 35%, or $88 million, of the 2016 Notes, bringing the total outstanding principal amount to $163 million. A redemption premium of $8 million was charged to loss on debt refinancing, net in the consolidated statement of operations and $4 million of accrued interest was paid. The Partnership also wrote off the unamortized loan fee of $1 million and unamortized bond premium of $2 million to loss on debt refinancing, net in the consolidated statement of operations. In June 2013, the Partnership redeemed all amounts outstanding 2016 Notes for $178 million cash, inclusive of accrued and unpaid interest of $7 million and other fees and expenses. |
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The Partnership and Finance Corp. have outstanding the following series of senior notes (collectively “Senior Notes”): |
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• | $600 million in aggregate principal amount of our 6.875% senior notes due December 1, 2018 (the “2018 Notes”) with interest payable semi-annually in arrears on June 1 and December 1; | | | | | | |
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• | $400 million in aggregate principal amount of our 5.75% senior notes due September 1, 2020 (the “2020 Notes”) with interest payable semi-annually in arrears on March 1 and September 1; | | | | | | |
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• | $500 million in aggregate principal amount of our 6.5% senior notes due July 15, 2021 (the “2021 Notes”) with interest payable semi-annually in arrears on January 15 and July 15; | | | | | | |
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• | $900 million in aggregate principal of our 5.875% senior notes due March 1, 2022 (the “2022 Notes”), issued in February 2014, with interest payable semi-annually in arrears on March 1 and September 1; | | | | | | |
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• | $700 million in aggregate principal amount of our 5.5% senior notes due April 15, 2023 (the “2023 5.5% Notes”) with interest payable semi-annually in arrears on April 15 and October 15; and | | | | | | |
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• | $600 million in aggregate principal amount of our 4.5% senior notes due November 1, 2023 (the “2023 4.5% Notes”) with interest payable semi-annually in arrears on May 1 and November 1. | | | | | | |
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The Senior Notes are guaranteed by our existing consolidated subsidiaries except Finance Corp and ELG. |
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The Senior Notes are redeemable at any time prior to the dates specified below at a price equal to 100% of the principal amount of the applicable series, plus a make-whole premium and accrued and unpaid interest, if any, to the redemption date. |
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• | 2018 Notes - Beginning December 1, 2014 100% may be redeemed at fixed redemption price of 103.438% (December 1, 2015 - 101.719% and December 1, 2016 and thereafter - 100%) plus accrued and unpaid interest, if any, to the redemption date | | | | | | |
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• | 2020 Notes - Redeemable, in whole or in part, prior to June 1, 2020 at 100% of the principal amount plus a make-whole premium and accrued and unpaid interest, if any, to the redemption date; redeemable, in whole or in part, on or after June 1, 2020 at 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date | | | | | | |
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• | 2021 Notes - Any time prior to July 15, 2014, up to 35% may be redeemed at a price of 106.5% plus accrued and unpaid interest, if any; beginning July 15, 2016, 100% may be redeemed at fixed redemption price of 103.25% (July 15, 2017 - 102.167%, July 15, 2018 - 101.083% and July 15, 2019 and thereafter - 100%) plus accrued and unpaid interest, if any, to the redemption date | | | | | | |
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• | 2022 Notes - Redeemable, in whole or in part, prior to December 1, 2021 at 100% at the principal amount plus a make-whole premium and accrued and unpaid interest, if any, to the redemption date; redeemable, in whole or in part, on or after December 1, 2021 at 100% at the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date | | | | | | |
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• | 2023 5.5% Notes - Any time prior to October 15, 2015, up to 35% may be redeemed at a price of 105.5% plus accrued and unpaid interest, if any; beginning October 15, 2017, 100% may be redeemed at fixed redemption price of 102.75% (October 15, 2018 - 101.833%, October 15, 2019 - 100.917% and October 15, 2020 and thereafter - 100%) plus accrued and unpaid interest, if any, to the redemption date | | | | | | |
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• | 2023 4.5% Notes - Redeemable, in whole or in part, prior to August 1, 2023 at 100% of the principal amount plus a make-whole premium and accrued and unpaid interest, if any, to the redemption date; redeemable, in whole or in part, on or after August 1, 2023 at 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date | | | | | | |
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Upon a change of control followed by a ratings downgrade within 90 days of a change of control, each note holder of the Senior Notes will be entitled to require us to purchase all or a portion of its notes at a purchase price of 101% plus accrued and unpaid interest, if any. The Partnership’s ability to purchase the Senior Notes upon a change of control will be limited by the terms of our debt agreements, including the Partnership’s revolving credit facility. |
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The existing senior notes contain various covenants that limit, among other things, our ability, and the ability of certain of our subsidiaries, to: |
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• | incur additional indebtedness; | | | | | | |
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• | pay distributions on, or repurchase or redeem our equity interests; | | | | | | |
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• | make certain investments; | | | | | | |
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• | incur liens; | | | | | | |
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• | enter into certain types of transactions with affiliates; and | | | | | | |
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• | sell assets or consolidate or merge with or into other companies. | | | | | | |
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If the Senior Notes achieve investment grade ratings by both Moody’s and Standard & Poor’s and no default or event of default has occurred and is continuing, we will no longer be subject to many of the foregoing covenants. At December 31, 2013, we were in compliance with these covenants. |