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Long-Term Debt | 9 Months Ended
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Sep. 30, 2017
Long-Term Debt [Abstract] |
Long-Term Debt | 7. LONG-TERM DEBT ﻿ Long-term debt and the weighted average interest rates as of September 30, 2017 and December 31, 201 6 consisted of the following: ﻿
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﻿Amounts in thousands |  | September 30, 2017 |  | December 31, 2016
﻿Credit agreement - Bank of Montreal |  | $ | 39,682 |  |  | 4.13% |  | $ | 40,495 |  |  | 4.04%
﻿Credit agreement - CPL |  |  | 0 |  |  | 0.00% |  |  | 215 |  |  | 3.55%
﻿Credit agreement - SCCL |  |  | 2,679 |  |  | 1.93% |  |  | 0 |  |  | 0.00%
﻿Financing obligation - CDR land lease |  |  | 15,622 |  |  | 13.24% |  |  | 14,520 |  |  | 13.54%
﻿Capital leases |  |  | 607 |  |  | 7.04% |  |  | 791 |  |  | 7.11%
﻿Total principal |  | $ | 58,590 |  |  | 6.61% |  | $ | 56,021 |  |  | 7.61%
﻿Deferred financing costs |  |  | (291) |  |  |  |  |  | (412) |  |  |
﻿Total long-term debt |  | $ | 58,299 |  |  |  |  | $ | 55,609 |  |  |
﻿Less current portion |  |  | (5,647) |  |  |  |  |  | (5,583) |  |  |
﻿Long-term portion |  | $ | 52,652 |  |  |  |  | $ | 50,026 |  |  |
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﻿ ﻿ Credit Agreement - Bank of Montreal In May 2012, the Company, through its Canadian subsidiaries, entered into the CAD 28.0 million credit agreement with the Bank of Montreal (“BM O”). On August 15, 2014, the Company, through its Canadian subsidiaries, entered into an amended and restated c redit a greement with BMO that increased the Company’s borrowing capacity to CAD 39.1 million. In September 2016, the Company, through its Canadian subsidiaries, entered into the BMO Credit Agreement to finance the Apex Acquisition that increased the Company’s borrowing capacity to CAD 69.2 million with an interest rate of BMO’s floating rate plus a margin. As discussed further below, the Company has entered into interest rate swap agreements to fix the interest rate paid related to a portion of the outstanding balance on the BMO Credit Agreement. As of September 30, 2017, the Company had borrowed CAD 63.9 million, of which the outstanding balance was CAD 49.5 million ($39.7 million based on the exchange rate in effect on September 30, 2017) and the Company had approximately CAD 6.0 million ($4.8 million based on the exchange rate in effect on September 30, 2017) available under the BMO Credit Agreement. In addition, the Company is using CAD 3.0 million ($2.4 million based on the exchange rate in effect on September 30, 2017) from Credit Facility E for the interest rate swap agreements discussed below. ﻿ The BMO Credit Agreement consists of the following five credit facilities: ﻿
| 1. |  | Credit Facility A is a CAD 1.1 million revolving credit facility with a term of five years that expires in August 2019. Credit Facility A may be used for general corporate purposes, including for the payment of costs related to the BMO Credit Agreement, ongoing working capital requirements and operating regulatory requirements. As of September 30, 2017, the Company had CAD 1.1 million ($0.9 million based on the exchange rate in effect on September 30, 2017) available for borrowing under Credit Facility A.
| 2. |  | Credit Facility B is an approximately CAD 24.1 million committed, non-revolving, reducing standby facility with a term of five years that expires in August 2019. The Company used borrowings under Credit Facility B primarily to repay the Company’s mortgage loan related to CRA, pay for the additional 33.3% investment in CPL, pay for development costs related to CDR and for working capital and general corporate purposes. Once the principal amount of an advance has been repaid, it cannot be re-borrowed. As of September 30, 2017, the Company had no additional available borrowings under Credit Facility B.
| 3. |  | Credit Facility C is a CAD 11.0 million revolving credit facility with a term of five years that expires in August 2019. Credit Facility C may be used as additional financing for the development of CDR. The Company may re-borrow the principal amount within the limits described in the BMO Credit Agreement. As of September 30, 2017, the Company had CAD 4.9 million ($3.9 million based on the exchange rate in effect on September 30, 2017) available for borrowing under Credit Facility C.
| 4. |  | Credit Facility D is a CAD 30.0 million committed, reducing term credit facility with a term of five years that expires in September 2021. The Company used CAD 30.0 million to pay for the Apex Acquisition. Once the principal amount of an advance has been repaid it cannot be re-borrowed. As of September 30, 2017, the Company had no additional available borrowings under Credit Facility D.
| 5. |  | Credit Facility E is a CAD 3.0 million treasury risk management facility. The Company may use this facility to hedge interest rate risk or currency exchange rate risk. Credit Facility E has a term of five years. The Company is currently utilizing Credit Facility E to hedge interest rate risk as discussed below.
﻿ Any funds not drawn down under the BMO Credit Agreement are subject to standby fees ranging from 0.50% to 0.75% payable quarterly in arrears. Standby fees of less than CAD 0.1 million (less than $0.1 million based on the exchange rate s in effect on September 30, 2017 and 2016) were recorded as interest expense in the condensed consolidated statement s of earnings for each of the three and nine months ended September 30, 2017 and 2016. The shares of the Company’s Canadian subsidiaries that own CRA, CAL and CSA and the Company's 75% interest in CDR are pledged as collateral for the BMO Credit Agreement. The BMO Credit Agreeme nt contains a number of covenants applicable to the Canadian subsidiaries, including covenants restricting their incurrence of additional debt, a debt to EBITDA ratio less than 3:1, a fixed charge coverage ratio greater than 1.2:1, maintena nce of a CAD 50.0 million equity balance and a capital expenditure limit of CAD 4.0 million per year. The Company was in compliance with all financial covenants of the BMO Credit Agreement as of September 30, 2017. ﻿ T he Company has entered into interest rate swap agreements to partially hedge the risk of future increases in the variable rate debt under the BMO Credit Agreement. The interest rate swap agreements are not designated as hedges for accounting purposes. As a result, changes in fair value of the interest rate swaps are recognized in interest expense on the Company’s condensed consolidated statement s of earnings. As of September 30, 2017, the Company had the following interest rate swap agreements set at a Canadian Dollar Offered Rate (“CDOR”):
| · |  | Notional amount of CAD 8.1 million ($6.5 million based on the exchange rate in effect on September 30, 2017) with a rate of 3.92% expiring in August 2019;
| · |  | Notional amount of CAD 8.1 million ($6.5 million based on the exchange rate in effect on September 30, 2017) with a rate of 3.89% expiring in August 2019; and
| · |  | Notional amount of CAD 13.5 million ($10.8 million based on the exchange rate in effect on September 30, 2017) with a rate of 4.08% expiring in December 2021.
﻿ Deferred financing costs consist of the Company’s costs related to the financing of the BMO Credit Agreement. Amortization expenses relating to deferred financing charges were $0.1 million for each of the nine months ended September 30, 2017 and 201 6. These costs are included in interest expense in the condensed consolidated statements of earnings. ﻿ Casinos Poland As of September 30, 2017, CPL had a short-term line of credit with BPH Bank used to finance current operations. The line of credit bears an interest rate of WIBOR plus 1.85% with a borrowing capacity of PLN 13.0 million, of which PLN 2.0 million may only be used to secure bank guarantees. The credit facility is secured by a building owned by CPL in Warsaw, Poland and terminates on February 11, 2018. The credit facility had no outstanding balance as of September 30, 2017 and December 31, 2016 and approximately PLN 11.0 million ($3.0 million based on the exchange rate in effect on September 30, 2017) was available for borrowing as of September 30, 2017. The credit facility contains a number of covenants applicable to CPL, including covenants that restrict the incurrence of additional debt and require CPL to maintain certain debt to EBITDA ratios. CPL was in compliance with all financial covenants of this credit facility as of September 30, 2017. ﻿ In addition, under Polish gaming law, CPL is required to maintain PLN 3.6 million in the form of deposits or bank guarantees for payment of casino jackpots and gaming tax obligations. mBank issued guarantees to CPL for this purpose totaling PLN 3.6 million ($1.0 million based on the exchange rate in effect on September 30, 2017). The mBank guarantees are secured by land owned by CPL in Kolbaskowo, Poland as well as a deposit of PLN 0.7 million ($0.2 million based on the exchange rate in effect on September 30, 2017) with mBank that terminates on October 31, 2019. In addition, CPL is required to maintain deposits or provide bank guarantees for payment of additional prizes and giveaways at the casinos. The amount of these deposits varies depending on the value of the prizes. CPL maintained PLN 0.5 million ($0.1 million based on the exchange rate in effect on September 30, 2017) in deposits for this purpose as of September 30, 2017. These d eposits are included in deposits and other on the Company’s condensed consolidated balance sheets. ﻿ Saw Close Casino Ltd. In August 2017, the Company’s subsidiary SCCL entered into a GBP 2.0 million term loan with UniCredit Bank Austria AG (“UniCredit”). The loan matures in September 2023 and bears interest at the London Interbank Offered Rate (“LIBOR”) plus 1.625%. Proceeds from the loan will be used for construction and fitting out of the Company’s Bath casino project. As of September 30, 2017, the amount outstanding on the loan was GBP 2.0 million ($2.7 million based on the exchange rate in effect on September 30, 2017). SCCL has no further borrowing availability under the loan agreement. Repayment of the loan will begin in December 2018. The loan is guaranteed by a $0.6 million cash guarantee by CCE. This guarantee is included in restricted cash on the Company’s condensed consolidated balance sheets. ﻿ Century Downs Racetrack and Casino CDR’s land lease is a financing obligation of the Company. Prior to the Company’s acquisition of its ownership interest in CDR, CDR sold a portion of the land on which the REC project is located and then entered into an agreement to lease back a portion of the land sold. The Company accounts for the lease using the financing method by accounting for the land subject to lease as an asset and the lease payments as interest on the financing obligation. Under the land lease, CDR has four options to purchase the land. The first option date is July 1, 2023. Due to the nature of the CDR land lease financing obligation, there are no principal payments due until the Company exercises its option to purchase the land. Lease payments are applied to interest only, and any change in the outstanding balance of the financing obligation relates to foreign currency translation. As of September 30, 2017, the outstanding balance on the financing obligation was CAD 19.5 million ($15.6 million based on the exchange rate in effect on September 30, 2017). ﻿ Capital Lease Agreements As of September 30, 2017, the Company had the following capital leases:
| · |  | CRA had two capital lease agreements for surveillance and general equipment with an outstanding balance of CAD 0.2 million ($0.2 million based on the exchange rate in effect on September 30, 2017);
| · |  | CAL has a capital lease agreement for general equipment with an outstanding balance of less than CAD 0.1 million (less than $0.1 million based on the exchange rate in effect on September 30, 2017);
| · |  | CDR had six capital lease agreements for surveillance, kitchen and racing-related equipment with an outstanding balance of CAD 0.4 million ($0.3 million based on the exchange rate in effect on September 30, 2017);
| · |  | CSA had a capital lease agreement for general equipment with an outstanding balance of less than CAD 0.1 million (less than $0.1 million based on the exchange rate in effect on September 30, 2017); and
| · |  | the Century Mile project had a capital lease agreement for trailers with an outstanding balance of CAD 0.1 million ($0.1 million based on the exchange rate in effect on September 30, 2017).
﻿ As of September 30, 2017, scheduled maturities related to long-term debt were as follows:
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﻿Amounts in thousands |  | Bank of Montreal |  | Saw Close Casino Ltd. Credit Agreement |  | Century Downs Land Lease |  | Capital Leases |  | Total
﻿2017 |  | $ | 1,433 |  | $ | 0 |  | $ | 0 |  | $ | 120 |  | $ | 1,553
﻿2018 |  |  | 5,117 |  |  | 134 |  |  | 0 |  |  | 311 |  |  | 5,562
﻿2019 |  |  | 16,906 |  |  | 536 |  |  | 0 |  |  | 124 |  |  | 17,566
﻿2020 |  |  | 2,404 |  |  | 536 |  |  | 0 |  |  | 41 |  |  | 2,981
﻿2021 |  |  | 2,404 |  |  | 536 |  |  | 0 |  |  | 10 |  |  | 2,950
﻿Thereafter |  |  | 11,418 |  |  | 937 |  |  | 15,622 |  |  | 1 |  |  | 27,978
﻿Total |  | $ | 39,682 |  | $ | 2,679 |  | $ | 15,622 |  | $ | 607 |  | $ | 58,590
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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 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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