Long-Term Debt and Notes Payable to Affiliates | 9 Months Ended |
Mar. 31, 2014 |
Long-Term Debt and Notes Payable to Affiliates [Abstract] | ' |
Long-Term Debt and Notes Payable to Affiliates | ' |
7. Long-Term Debt and Notes Payable to Affiliates |
Long-term debt as of June 30, 2013 and March 31, 2014 consisted of the following (in thousands): |
| Maturity | Fiscal Year End | 31-Mar-14 |
30-Jun-13 |
FY14 First Lien Loans(a) | 2020 | $ | — | | $ | 533,507 | |
FY13 First Lien Loans(b) | 2017 | | 441,669 | | | — | |
FY13 Second Lien Loans(b) | 2018 | | 122,084 | | | — | |
Obligations under capital leases(c) | 2021-2052 | | 20,264 | | | 39,238 | |
Other obligations(d) | 2014-2016 | | 4,846 | | | 4,492 | |
| | | 588,863 | | | 577,237 | |
Less current maturities(e) | | | 8,201 | | | 10,565 | |
| | $ | 580,662 | | $ | 566,672 | |
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| (a) | As described in Note 1, “Formation and Business”, the Company entered into the New Credit Agreement providing for a $540.0 million Term Loan. The Company has the ability to increase the size of the Term Loan under certain circumstances in an aggregate amount of up to $100.0 million plus an additional amount such that, after giving effect to such additional amount, it does not exceed the total secured debt leverage ratio. The proceeds from the Term Loan, together with cash on hand and $48.3 million contributed to the Company by Fortress, were used to refinance and extinguish the existing debt under the FY13 Lien Loans. | | | | | |
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The refinancing has been accounted for as an extinguishment of debt resulting in a pre-tax loss of $35.5 million during the nine months ended March 31, 2014, consisting of the difference between the principal value and fair value of the FY13 Lien Loans and the write-off of the related unamortized financing costs and unamortized original issue discount (“OID”). The following table provides detail of the calculation of the net loss on debt extinguishment for the nine months ended March 31, 2014: |
| Nine Months Ended | | | | |
31-Mar-14 | | | | |
FY13 First Lien Loans | $ | 446,625 | | | | | |
FY13 Second Lien Loans | | 125,000 | | | | | |
Total FY13 Lien Loans | | 571,625 | | | | | |
Total fair value | | (580,389 | ) | | | | |
Write off of unamortized discount and financing fees related to FY13 Lien Loans | | (26,716 | ) | | | | |
Loss on debt extinguishment | $ | (35,480 | ) | | | | |
The Term Loan has a maturity date of December 9, 2020 and bears interest at LIBOR + 4.50% with a LIBOR floor of 1.0% (rate of 5.50% at March 31, 2014). The New Credit Agreement requires quarterly principal payments in the amount of $1.4 million that commenced on March 31, 2014 and periodic interest payments that commenced at the end of December 2013. The Company recorded interest expense related to the Term Loan of $7.4 million and $9.2 million for the three and nine months ended March 31, 2014. |
The net cash proceeds from the Term Loan were reduced by an OID of 1%, or $5.4 million. The OID is amortized using a method which approximates the effective interest method over the term of the Term Loan. There was $5.1 million of unamortized OID remaining as of March 31, 2014. |
The Company capitalized $18.0 million of costs in connection with the FY14 Loans included in deferred charges and other on the condensed consolidated balance sheets. These costs are amortized using a method which approximates the effective interest method over the term of the Term Loan. There was $17.1 million of unamortized costs remaining as of March 31, 2014. |
The Company’s obligations under the New Credit Agreement are collateralized by guarantees of substantially all of its material U.S. subsidiaries. The guarantees are further supported by mortgages and other security interests in certain properties and assets held by U.S. subsidiaries of the Company. The collateral includes both general and specific assets. |
The FY14 Loans provide for affirmative and negative covenants that restrict, among other things, the Company’s ability and the ability of its subsidiaries to incur indebtedness, dispose of property, or make investments or distributions. It also includes customary cross-default provisions with respect of certain other borrowings of the Company and its subsidiaries. |
The Company was in compliance with the covenants of the New Credit Agreement at March 31, 2014. |
| (b) | As a result of entering into the FY14 Loans and refinancing and extinguishing the FY13 Lien Loans, the Company paid a call premium, totaling $4.4 million and $3.8 million related to the FY13 First Lien and FY13 Second Lien Loans, respectively, which is included in loss on extinguishment of debt in the condensed consolidated statement of operations during the nine months ended March 31, 2014. | | | | | |
Additionally, the Company wrote off $8.3 million of unamortized discount and $18.4 million of unamortized financing costs related to the FY13 First Lien and FY13 Second Lien Loans which are included in loss on extinguishment of debt on the condensed consolidated statement of operations for the nine months ended March 31, 2014. |
| (c) | Capital lease obligations are primarily for equipment except for the lease of Winter Park ski resort. In the first fiscal quarter of 2014, the Winter Park capital lease was modified to remove a floor on a payment obligation in exchange for other concessions resulting in a $19.6 million increase to the capital lease obligation and related capital lease assets due to a change in the present value of the future minimum lease payments. | | | | | |
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Amortization of assets under capital leases is included in depreciation and amortization expense in the condensed consolidated statements of operations. The leases have remaining terms ranging from 8 years to 39 years and have a weighted average interest rate of 10%. |
| (d) | In addition to various other lending agreements, a subsidiary of the Company has government loan agreements with a weighted average interest rate of 5.86%. | | | | | |
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| (e) | Current maturities represent principal payments due in the next twelve months. As of March 31, 2014, the long-term debt and capital lease obligation aggregate maturities for the twelve month periods are as follows (in thousands): | | | | | |
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2015 | $10,565 | | | | | | |
2016 | 10,381 | | | | | | |
2017 | 23,006 | | | | | | |
2018 | 7,131 | | | | | | |
2019 | 7,002 | | | | | | |
Thereafter | 519,152 | | | | | | |
| $577,237 | | | | | | |
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Notes payable to affiliates as of June 30, 2013 and March 31, 2014 were as follows (in thousands): |
| Maturity | Fiscal Year End | 31-Mar-14 |
30-Jun-13 |
Third Lien Loan(a) | 2019 | $ | 196,991 | | $ | — | |
Accrued interest on Third Lien Loan(a) | 2019 | | 133,328 | | | — | |
Tranche B Term Loans(b) | 2019 | | 300,000 | | | — | |
Accrued Interest on Tranche B Term Loans(b) | 2019 | | 469,963 | | | — | |
Affiliate Loan(b) | 2019 | | 100,000 | | | — | |
Accrued interest on Affiliate Loan(b) | 2019 | | 158,413 | | | — | |
| | $ | 1,358,695 | | $ | — | |
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| (a) | In connection with the Restructuring, the Third Lien Loan was amended to release the Company’s subsidiaries from their obligations in respect of the Third Lien Loan and accrued and unpaid interest thereon. | | | | | |
| (b) | In connection with the Restructuring, the Tranche B Term Loans and Affiliate Loans, including accrued and unpaid interest thereon, were exchanged for equity interests in the Company and subsequently canceled. | | | | | |
In addition to the Term Loan, the New Credit Agreement provided a $55.0 million New LC Facility and a $25.0 million New Revolver. The New LC Facility and the New Revolver each have a maturity date of December 9, 2018. |
The New LC Facility carries an interest rate equal to LIBOR + 4.50%, fronting fees of 25 basis points, and a commitment fee of 37.5 basis points on the first 15% of unutilized commitments. If the total secured debt leverage ratio is less than 4.50:1.00, the interest rate is adjusted to LIBOR + 4.25%. The letters of credit issued under the FY13 Lien Loans were deemed issued under the New LC Facility. There were $48.4 million of undrawn letters of credit outstanding under the New LC Facility at March 31, 2014. |
The New Revolver carries an interest rate equal to LIBOR + 4.50% and commitment fees of 37.5 basis points. If the total secured debt leverage ratio is less than 4.50:1.00, the interest rate is adjusted to LIBOR + 4.25%. The New Revolver includes a financial covenant, pursuant to which the Company cannot borrow under the New Revolver if the total secured debt leverage ratio is greater than or equal to 7.75:1.00 through the fiscal year ending June 30, 2014. The ratio decreases ratably until June 30, 2018 at which time it will remain at 4.50:1.00. There were no outstanding borrowings under the New Revolver at March 31, 2014. |
The Company recorded interest expense of $75.0 million and $255.0 million in the condensed consolidated statements of operations for the three and nine months ended March 31, 2013, respectively, of which $1.0 million and $3.8 million was amortization of deferred financing costs for the three and nine months ended March 31, 2013, respectively. The Company recorded interest expense of $10.9 million and $162.4 million for the three and nine months ended March 31, 2014, respectively, of which $0.8 million and $2.8 million was amortization of deferred financing costs for the three and nine months ended March 31, 2014, respectively. |
In October 2006, the Company entered into interest rate swap contracts to minimize the impact of changes in interest rates on its cash flows for certain of the Company’s floating bank rates and other indebtedness. The outstanding swap contracts were terminated on October 11, 2008. The fair value of the swap contracts at October 11, 2008 was a liability of $111.4 million. The remaining terminated swap liability of $4.1 million as of March 31, 2014 is recorded in AOCI will be recognized periodically through March 31, 2017 as an adjustment to interest expense consistent with hedge accounting principles. The portion included in interest expense in the condensed consolidated statements of operations for the three and nine months ended March 31, 2013 was $1.1 million and $3.2 million, respectively, and $0.8 million and $3.5 million for the three and nine months ended March 31, 2014, respectively. |