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Long-Term Debt | 12 Months Ended
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May. 28, 2015
Debt Disclosure [Abstract] |
Long-Term Debt | 5. Long-Term Debt Long-term debt is summarized as follows:
|  | May 28, 2015 |  | May 29, 2014 |
|  | (in thousands, |
|  | except payment data) |
Mortgage notes |  | $ | 51,986 |  | $ | 52,696 |
Senior notes |  |  | 101,429 |  |  | 103,571 |
Unsecured term note due February 2025, with monthly principal and interest payments of $39,110, bearing interest at 5.75% |  |  | 3,496 |  |  | 3,757 |
Revolving credit agreement |  |  | 48,000 |  |  | 34,000 |
Unsecured term loan |  |  | 42,500 |  |  | 46,563 |
|  |  | 247,411 |  |  | 240,587 |
Less current maturities |  |  | 17,742 |  |  | 7,030 |
|  | $ | 229,669 |  | $ | 233,557 |
The mortgage notes, both fixed rate and adjustable, bear interest from 3.0% to 5.9%, have a weighted-average rate of 4.52% at May 28, 2015, and mature in fiscal years 2016 through 2043. The mortgage notes are secured by the related land, buildings and equipment. A note maturing in fiscal 2016 with a balance of $16,904,000 as of May 28, 2015, is classified as long-term debt due to an existing agreement to extend the maturity date to fiscal 2018. On the last day of fiscal 2014, the Company paid off a $20,830,000 fixed rate mortgage note with borrowings from its credit facility. The $101,429,000 of senior notes maturing in 2018 through 2025 require annual principal payments in varying installments and bear interest payable semi-annually at fixed rates ranging from 4.02% to 6.55%, with a weighted-average fixed rate of 5.26% and 5.27% at May 28, 2015 and May 29, 2014, respectively. The Company has the ability to issue commercial paper through an agreement with a bank, up to a maximum of $35,000,000. The agreement requires the Company to maintain unused bank lines of credit at least equal to the principal amount of outstanding commercial paper. There were no borrowings on commercial paper as of May 28, 2015 and May 29, 2014. At May 28, 2015, the Company had a revolving credit facility totaling $175,000,000 in place under an existing credit agreement that matures in January 2018. There were borrowings of $48,000,000 outstanding on the revolving credit facility at May 28, 2015, bearing interest at LIBOR plus a margin which adjusts based on the Company’s borrowing levels, effectively 1.363% at May 28, 2015 and May 29, 2014. The Company also has a term loan under the credit agreement with a balance of $42,500,000 at May 28, 2015, that requires quarterly principal payments in varying installments, bears interest at LIBOR plus a margin, which also adjusts based on the Company’s borrowing levels, and was 1.563% at May 28, 2015 and May 29, 2014. The revolving credit facility requires an annual facility fee of 0.20% on the total commitment. Based on borrowings outstanding, availability under the line at May 28, 2015 totaled $127,000,000. During fiscal 2013, the Company refinanced the debt related to The Skirvin Hilton hotel in Oklahoma City (the Company owns a 60% interest in this hotel). In conjunction with that refinancing, approximately $9,753,000 of debt originally issued as part of a new markets tax credit structure was cancelled in December 2012 after certain time-related conditions related to the tax credits were met. As a result, the Company recognized income from the extinguishment of debt of $6,008,000 during fiscal 2013, representing cancellation of the $9,753,000 of debt less approximately $3,745,000 of deferred fees related to the issuance of the debt. This extinguishment of debt income did not impact the Company’s reported net earnings attributable to The Marcus Corporation during fiscal 2013 because, pursuant to the Company’s interpretation of the terms of the operating agreement with the Company’s 40% joint venture partner, the Company allocated 100% of this income to the noncontrolling interest. During fiscal 2014, the debt extinguishment income was reallocated due to a settlement with the Company’s joint venture partner. As a result of this settlement, approximately $3,600,000 of the original extinguishment of debt income was reallocated to the Company in fiscal 2014 and recorded as a loss attributable to noncontrolling interests. The Company’s loan agreements include, among other covenants, maintenance of certain financial ratios, including a debt-to-capitalization ratio and a fixed charge coverage ratio. The Company is in compliance with all financial debt covenants at May 28, 2015. Scheduled annual principal payments on long-term debt for the years subsequent to May 28, 2015, are:
Fiscal Year |  | (in thousands) |
2016 |  | $ | 17,742 |
2017 |  |  | 43,153 |
2018 |  |  | 106,302 |
2019 |  |  | 9,560 |
2020 |  |  | 9,587 |
Thereafter |  |  | 61,067 |
|  | $ | 247,411 |
Interest paid, net of amounts capitalized, in fiscal 2015, 2014 and 2013 totaled $9,353,000, $9,370,000 and $9,093,000, respectively. The Company utilizes derivatives principally to manage market risks and reduce its exposure resulting from fluctuations in interest rates. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objectives and strategies for undertaking various hedge transactions. The Company entered into an interest rate swap agreement on February 28, 2013 covering $25,000,000 of floating rate debt, which expires January 22, 2018, and requires the Company to pay interest at a defined rate of 0.96% while receiving interest at a defined variable rate of one-month LIBOR (0.19% at May 28, 2015). The Company recognizes derivatives as either assets or liabilities on the consolidated balance sheets at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and on the type of hedging relationship. Derivatives that do not qualify for hedge accounting must be adjusted to fair value through earnings. The Company’s interest rate swap agreement is considered effective and qualifies as a cash flow hedge. For derivatives that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive loss and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. As of May 28, 2015 and May 29, 2014, the interest rate swap was considered effective and had no effect on earnings. The fair value of the interest rate swap on May 28, 2015 was a liability of $28,000 and was included in deferred compensation and other. The fair value of the interest rate swap on May 29, 2014 was an asset of $56,000 and was included in other (long-term assets). The notional amount of the interest rate swap was $25,000,000. The Company does not expect the interest rate swap to have any material effect on earnings within the next 12 months. On February 29, 2008, the Company also entered into an interest rate swap agreement covering $25,000,000 of floating rate debt, which required the Company to pay interest at a defined rate of 3.49% while receiving interest at a defined variable rate of three-month LIBOR. The interest rate swap agreement was considered effective and qualified as a cash flow hedge. On March 19, 2008, the Company terminated the swap, at which time cash flow hedge accounting ceased. The fair value of the swap on the date of termination was a liability of $567,000 ($338,000 net of tax). In fiscal 2013, the Company reclassified $99,000 ($58,000 net of tax) from accumulated other comprehensive loss to interest expense. The liability was fully amortized as of May 30, 2013.

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- Definition The entire disclosure for long-term debt. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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