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Long-Term Debt | 12 Months Ended
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Jul. 31, 2015
Debt Disclosure [Abstract] |
Long-Term Debt | Long-Term Debt Long-term debt as of July 31, 2015 and 2014 is summarized as follows (in thousands):
| Fiscal Year Maturity (a) | July 31, 2015 | July 31, 2014
Credit Facility Revolver (b) | 2020 | $ | 185,000 |  | $ | — |
Credit Facility Term Loan (b) | 2020 | 250,000 |  | — |
Industrial Development Bonds (c) | 2020 | — |  | 41,200 |
Employee Housing Bonds (d) | 2027-2039 | 52,575 |  | 52,575 |
6.50% Notes (e) | 2019 | — |  | 215,000 |
Canyons obligation (f) | 2063 | 317,455 |  | 311,858 |
Other (g) | 2016-2029 | 11,800 |  | 5,989 |
Total debt |  | 816,830 |  | 626,622 |
Less: Current maturities (h) |  | 10,154 |  | 1,022 |
Long-term debt |  | $ | 806,676 |  | $ | 625,600 |
(a) | Maturities are based on the Company’s July 31 fiscal year end.
(b) | On May 1, 2015, Vail Holdings, Inc. (“VHI”), a wholly-owned subsidiary of the Company, amended and restated its senior credit facility.
Key modifications to the senior credit facility included, among other things, the extension of the maturity on the revolving credit facility from March 2019 to May 2020 and increases in certain baskets for and improved flexibility to incur debt and make distributions. The amended credit facility is now referred to as the Seventh Amended and Restated Credit Agreement (the “Credit Agreement”) with VHI, as borrower, the Company and certain subsidiaries of the Company, as guarantors, Bank of America, N.A., as administrative agent, and the other Lenders party thereto, and consists of a $400 million revolving credit facility. The Credit Agreement also provides for a term loan facility in an aggregate principal amount of $250.0 million. VHI’s obligations under the Credit Agreement are guaranteed by the Company and certain of its subsidiaries and are collateralized by a pledge of all the capital stock of VHI and substantially all of its subsidiaries (with certain additional exceptions for the pledge of the capital stock of foreign subsidiaries). In addition, pursuant to the terms of the Credit Agreement, VHI has the ability to increase availability (under the revolver or in the form of term loans) to an aggregate principal amount not to exceed the greater of (i) $950.0 million and (ii) the product of 2.75 and the trailing twelve-month Adjusted EBITDA, as defined in the Credit Agreement. The term loan facility is subject to quarterly amortization of principal, commencing on January 31, 2016, in equal installments, with five percent payable in each year and the final payment of all amounts outstanding, plus accrued and unpaid interest due on May 1, 2020. The proceeds of the loans made under the Credit Agreement may be used, in addition to the redemptions of the 6.50% Notes and industrial development bonds (as discussed below), to fund the Company’s working capital needs, capital expenditures, acquisitions, investments and other general corporate purposes, including the issuance of letters of credit. The Credit Agreement matures in May 2020. Borrowings under the Credit Agreement, including the term loan facility, bear interest annually at the Company's option at the rate of (i) LIBOR plus 1.125% as of July 31, 2015 (1.32% as of July 31, 2015) or (ii) the Agent's prime lending rate plus a margin (3.50% as of July 31, 2015). Interest rate margins may fluctuate based upon the ratio of the Company’s Net Funded Debt to Adjusted EBITDA on a trailing four-quarter basis. The Credit Agreement also includes a quarterly unused commitment fee, which is equal to a percentage determined by the Net Funded Debt to Adjusted EBITDA ratio, as each such term is defined in the Credit Agreement, times the daily amount by which the Credit Agreement commitment exceeds the total of outstanding loans and outstanding letters of credit. The unused amounts are accessible to the extent that the Net Funded Debt to Adjusted EBITDA ratio does not exceed the maximum ratio allowed at quarter-ends and the Adjusted EBITDA to interest on Funded Debt (as defined in the Credit Agreement) ratio does not fall below the minimum ratio allowed at quarter-ends. The Credit Agreement provides for affirmative and negative covenants that restrict, among other things, the Company’s ability to incur indebtedness, dispose of assets, make capital expenditures, make distributions and make investments. In addition, the Credit Agreement includes the following restrictive financial covenants: Net Funded Debt to Adjusted EBITDA ratio and Adjusted EBITDA to interest on Funded Debt ratio.
(c) | At July 31, 2014, the Company had outstanding $41.2 million of industrial development bonds, which were issued by Eagle County, Colorado (the “Eagle County Bonds”) and mature, subject to prior redemption, on August 1, 2019. These bonds accrued interest at 6.95% per annum, with interest being payable semi-annually on February 1 and August 1. The promissory note with respect to the Eagle County Bonds between Eagle County and the Company was collateralized by the Forest Service permits for Vail and Beaver Creek. On May 1, 2015, the Company redeemed the outstanding aggregate principal amounts of the industrial development bonds, which was funded by the $250.0 million term loan under our senior credit facility and cash on hand. As a result, the Company incurred an early redemption premium of 4.0%, or $1.6 million, for the portion of the principal redeemed, which was recorded, along with a write-off of $0.1 million of unamortized debt issuance costs, as a loss on extinguishment of debt during the year ended July 31, 2015. As of July 31, 2015, no amount of the industrial development bonds remain outstanding.
(d) | The Company has recorded for financial reporting purposes the outstanding debt of four Employee Housing Entities (each an “Employee Housing Entity” and collectively the “Employee Housing Entities”): Breckenridge Terrace, Tarnes, BC Housing and Tenderfoot. The proceeds of the Employee Housing Bonds were used to develop apartment complexes designated primarily for use by the Company’s seasonal employees at its mountain resorts. The Employee Housing Bonds are variable rate, interest-only instruments with interest rates tied to LIBOR plus 0% to 0.05% (0.19% to 0.24% as of July 31, 2015).
Interest on the Employee Housing Bonds is paid monthly in arrears and the interest rate is adjusted weekly. No principal payments are due on the Employee Housing Bonds until maturity. Each Employee Housing Entity’s bonds were issued in two series. The bonds for each Employee Housing Entity are backed by letters of credit issued under the Credit Agreement. The table below presents the principal amounts outstanding for the Employee Housing Bonds as of July 31, 2015 (in thousands):
| Maturity (a) | Tranche A | Tranche B | Total
Breckenridge Terrace | 2039 | $ | 14,980 |  | $ | 5,000 |  | $ | 19,980 |
Tarnes | 2039 | 8,000 |  | 2,410 |  | 10,410 |
BC Housing | 2027 | 9,100 |  | 1,500 |  | 10,600 |
Tenderfoot | 2035 | 5,700 |  | 5,885 |  | 11,585 |
Total |  | $ | 37,780 |  | $ | 14,795 |  | $ | 52,575 |
(e) | On April 25, 2011, the Company completed a private offering for $390 million of 6.50% Notes. The 6.50% Notes had a fixed annual interest rate of 6.50% and would have matured May 1, 2019 with no principal payments due until maturity. The Company had certain early redemption options under the terms of the 6.50% Notes. The premium for early redemption of the 6.50% Notes ranged from 4.875% to 0%, depending on the date of redemption. The 6.50% Notes were subordinated to certain of the Company’s debts, including the senior credit facility. On July 7, 2014, the Company redeemed $175.0 million of the 6.50% Notes. As a result, the Company incurred an early redemption premium of 4.875%, or $8.5 million, for the portion of the principal redeemed, which was recorded, along with a write-off of $2.3 million of unamortized debt issuance costs, as a loss on extinguishment of debt during the year ended July 31, 2014. As of July 31, 2014, $215.0 million of the 6.50% Notes remained outstanding. On May 1, 2015, the Company redeemed the remaining outstanding aggregate principal amount of its 6.50% Notes, which was funded by the $250.0 million term loan under its senior credit facility and cash on hand. As a result, the Company incurred an early redemption premium of 3.250%, or $7.0 million, for the portion of the principal redeemed, which was recorded, along with a write-off of $2.3 million of unamortized debt issuance costs, as a loss on extinguishment of debt during the year ended July 31, 2015. As of July 31, 2015, no amount of the 6.50% Notes remain outstanding.
(f) | On May 24, 2013, VR CPC Holdings, Inc. (“VR CPC”), a wholly-owned subsidiary of the Company, entered into a transaction agreement (the "Transaction Agreement") with affiliate companies of Talisker Corporation ("Talisker") pursuant to which the parties entered into a master lease agreement (the "Lease") and certain ancillary transaction documents on May 29, 2013 related to the Canyons mountain resort (see Note 5, Acquisitions), pursuant to which the Company assumed the resort operations of Canyons mountain resort in Park City, Utah. The Lease between VR CPC and Talisker has an initial term of 50 years with six 50-year renewal options. The Lease provides for $25 million in annual payments, which increase each year by an inflation linked index of CPI less 1%, with a floor of 2% per annum. The Parent Company has guaranteed the payments under the Lease. The obligation at July 31, 2015 represents future lease payments for the remaining initial lease term of 50 years (including annual increases at the floor of 2%) discounted using an interest rate of 10%, and includes accumulated accreted interest expense of $12.1 million.
(g) | Other obligations primarily consist of a $4.9 million note outstanding to the Colorado Water Conservation Board, which matures on September 16, 2028, capital leases and other financing arrangements. Other obligations, including the Colorado Water Conservation Board note and the capital leases, bear interest at rates ranging from 0.2% to 5.5% and have maturities ranging from in the year ending July 31, 2016 to the year ending July 31, 2029.
(h) | Current maturities represent principal payments due in the next 12 months.
Aggregate maturities for debt outstanding, including capital lease obligations, as of July 31, 2015 reflected by fiscal year are as follows (in thousands):
| Total
2016 | $ | 10,154 |
2017 | 13,354 |
2018 | 13,397 |
2019 | 13,455 |
2020 | 389,141 |
Thereafter | 377,329 |
Total debt | $ | 816,830 |
The Company recorded gross interest expense of $51.2 million, $64.0 million and $39.0 million for the years ended July 31, 2015, 2014 and 2013, respectively, of which $1.3 million, $1.9 million and $2.0 million was amortization of deferred financing costs. The Company was in compliance with all of its financial and operating covenants required to be maintained under its debt instruments for all periods presented.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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