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Master Lease Financing Obligation (Restatement)
3 Months Ended
Mar. 31, 2015
Master Lease Financing Obligation (Restatement)  
Master Lease Financing Obligation (Restatement)

 

7.  Master Lease Financing Obligation (Restatement)

 

The Company’s Master Lease with GLPI is accounted for as a financing obligation. The obligation was calculated at the inception of the transaction based on the future minimum lease payments due to GLPI under the Master Lease discounted at 9.70%, which represents the estimated incremental borrowing rate over the lease term, including renewal options that were reasonably assured of being exercised and the funded construction of certain leased real estate assets in development at the date of the Spin-Off. Total payments under the Master Lease were $108.8 million and $104.3 million for the three months ended March 31, 2015 and 2014, respectively, of which $96.4 million and $93.1 million, respectively, were recognized as interest expense.  The interest expense recognized for the three months ended March 31, 2015 and 2014 includes $10.7 million and $10.2 million from contingent payments associated with the monthly variable components for Hollywood Casino Columbus and Hollywood Casino Toledo, respectively and $0.8 million from contingent payments associated with the annual escalator during the three months ended March 31, 2015.