Attached files
| file | filename |
|---|---|
| 8-K - Station Casinos LLC | stn-20111231x8k.htm |
Exhibit 99.1
Unaudited Condensed Consolidating Financial Statements
The following unaudited condensed consolidating balance sheets, statements of operations and statements of cash flows are presented to provide supplemental financial information about the Company, the Guarantor Subsidiaries on a combined basis, and the Non-Guarantor Subsidiaries on a combined basis.
CONDENSED CONSOLIDATING BALANCE SHEETS DECEMBER 31, 2011 (Unaudited, amounts in thousands) | ||||||||||||||||||||
Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and cash equivalents | $ | (2,420 | ) | $ | 50,479 | $ | 47,762 | $ | — | $ | 95,821 | |||||||||
Restricted cash | 1,562 | 50 | 393 | — | 2,005 | |||||||||||||||
Receivables, net | 876 | 13,170 | 13,400 | — | 27,446 | |||||||||||||||
Inventories | 9 | 5,453 | 3,682 | — | 9,144 | |||||||||||||||
Prepaid expenses and other current assets | 3,139 | 14,073 | 12,669 | — | 29,881 | |||||||||||||||
Total current assets | 3,166 | 83,225 | 77,906 | — | 164,297 | |||||||||||||||
Property and equipment, net | 47,715 | 1,335,042 | 863,308 | — | 2,246,065 | |||||||||||||||
Goodwill | 1,234 | 177,820 | 16,078 | — | 195,132 | |||||||||||||||
Other intangible assets, net | 1,000 | 61,311 | 151,781 | — | 214,092 | |||||||||||||||
Land held for development | — | — | 227,857 | — | 227,857 | |||||||||||||||
Investments in joint ventures | — | — | 10,157 | — | 10,157 | |||||||||||||||
Native American development costs | — | — | 70,516 | — | 70,516 | |||||||||||||||
Investments in subsidiaries | 2,259,272 | — | 31,732 | (2,291,004 | ) | — | ||||||||||||||
Other assets, net | 7,283 | 12,782 | 30,168 | — | 50,233 | |||||||||||||||
Total assets | $ | 2,319,670 | $ | 1,670,180 | $ | 1,479,503 | $ | (2,291,004 | ) | $ | 3,178,349 | |||||||||
LIABILITIES AND MEMBERS' EQUITY | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Current portion of long-term debt | $ | 11,027 | $ | 245 | $ | 5,108 | $ | — | $ | 16,380 | ||||||||||
Accounts payable | 533 | 9,678 | 7,029 | — | 17,240 | |||||||||||||||
Accrued interest payable | 1,643 | — | 1,215 | — | 2,858 | |||||||||||||||
Accrued expenses and other current liabilities | 8,928 | 45,427 | 37,807 | — | 92,162 | |||||||||||||||
Intercompany payables (receivables) | 43,588 | (50,090 | ) | 6,502 | — | — | ||||||||||||||
Total current liabilities | 65,719 | 5,260 | 57,661 | — | 128,640 | |||||||||||||||
Long-term debt, less current portion | 1,440,973 | 2,085 | 735,789 | — | 2,178,847 | |||||||||||||||
Deficit investments in joint ventures | — | — | 2,318 | — | 2,318 | |||||||||||||||
Other long-term liabilities, net | 13,301 | — | 12,767 | — | 26,068 | |||||||||||||||
Total liabilities | 1,519,993 | 7,345 | 808,535 | — | 2,335,873 | |||||||||||||||
Members' equity: | ||||||||||||||||||||
Paid-in capital | 844,924 | 1,620,240 | 636,093 | (2,256,333 | ) | 844,924 | ||||||||||||||
4
CONDENSED CONSOLIDATING BALANCE SHEETS (Continued) DECEMBER 31, 2011 (Unaudited, amounts in thousands) | ||||||||||||||||||||
Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Accumulated other comprehensive loss | (20,154 | ) | — | (6,746 | ) | 6,746 | (20,154 | ) | ||||||||||||
Retained earnings (accumulated deficit) | (25,093 | ) | 42,595 | (1,178 | ) | (41,417 | ) | (25,093 | ) | |||||||||||
Total members' equity of Station Casinos LLC | 799,677 | 1,662,835 | 628,169 | (2,291,004 | ) | 799,677 | ||||||||||||||
Noncontrolling interest | — | — | 42,799 | — | 42,799 | |||||||||||||||
Total members' equity | 799,677 | 1,662,835 | 670,968 | (2,291,004 | ) | 842,476 | ||||||||||||||
Total liabilities and members' equity | $ | 2,319,670 | $ | 1,670,180 | $ | 1,479,503 | $ | (2,291,004 | ) | $ | 3,178,349 | |||||||||
5
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE PERIOD JUNE 17, 2011 THROUGH DECEMBER 31, 2011 (Unaudited, amounts in thousands) | ||||||||||||||||||||
Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Operating revenues: | ||||||||||||||||||||
Casino | $ | — | $ | 244,448 | $ | 208,503 | $ | — | $ | 452,951 | ||||||||||
Food and beverage | — | 70,296 | 49,439 | — | 119,735 | |||||||||||||||
Room | — | 35,818 | 19,106 | — | 54,924 | |||||||||||||||
Other | 28 | 19,577 | 20,053 | — | 39,658 | |||||||||||||||
Management fees | — | — | 13,482 | — | 13,482 | |||||||||||||||
Gross revenues | 28 | 370,139 | 310,583 | — | 680,750 | |||||||||||||||
Promotional allowances | — | (29,378 | ) | (21,973 | ) | — | (51,351 | ) | ||||||||||||
Net revenues | 28 | 340,761 | 288,610 | — | 629,399 | |||||||||||||||
Casino | — | 94,352 | 83,914 | — | 178,266 | |||||||||||||||
Food and beverage | — | 52,917 | 36,062 | — | 88,979 | |||||||||||||||
Room | — | 14,357 | 8,046 | — | 22,403 | |||||||||||||||
Other | — | 8,085 | 8,811 | — | 16,896 | |||||||||||||||
Selling, general and administrative | 2 | 78,477 | 76,164 | — | 154,643 | |||||||||||||||
Development and preopening expense | 74 | 141 | 503 | — | 718 | |||||||||||||||
Depreciation and amortization | 1,274 | 35,367 | 30,382 | — | 67,023 | |||||||||||||||
Management fees | — | 12,056 | 9,763 | — | 21,819 | |||||||||||||||
Impairment of other assets | — | — | 2,100 | — | 2,100 | |||||||||||||||
Write-downs and other charges, net | 554 | 2,321 | 1,166 | — | 4,041 | |||||||||||||||
1,904 | 298,073 | 256,911 | — | 556,888 | ||||||||||||||||
Operating (loss) income | (1,876 | ) | 42,688 | 31,699 | — | 72,511 | ||||||||||||||
Earnings from subsidiaries | 42,441 | — | — | (42,441 | ) | — | ||||||||||||||
Losses from joint ventures | — | — | (1,533 | ) | — | (1,533 | ) | |||||||||||||
Operating (loss) income and earnings (losses) from subsidiaries and joint ventures | 40,565 | 42,688 | 30,166 | (42,441 | ) | 70,978 | ||||||||||||||
Other expense: | ||||||||||||||||||||
Interest expense, net | (65,658 | ) | (93 | ) | (26,548 | ) | — | (92,299 | ) | |||||||||||
Gain on early retirement of debt | — | — | 1,183 | — | 1,183 | |||||||||||||||
Net (loss) income | (25,093 | ) | 42,595 | 4,801 | (42,441 | ) | (20,138 | ) | ||||||||||||
Less: net income applicable to noncontrolling interest | — | — | 4,955 | — | 4,955 | |||||||||||||||
Net (loss) income applicable to Station Casinos LLC members | $ | (25,093 | ) | $ | 42,595 | $ | (154 | ) | $ | (42,441 | ) | $ | (25,093 | ) | ||||||
6
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE PERIOD JUNE 17, 2011 THROUGH DECEMBER 31, 2011 (Unaudited, amounts in thousands) | ||||||||||||||||||||
Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net (loss) income | $ | (25,093 | ) | $ | 42,595 | $ | 4,801 | $ | (42,441 | ) | $ | (20,138 | ) | |||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization | 1,274 | 35,366 | 30,383 | — | 67,023 | |||||||||||||||
Impairment of other assets | — | — | 2,100 | — | 2,100 | |||||||||||||||
Write-downs and other charges, net | 554 | 2,321 | 1,166 | — | 4,041 | |||||||||||||||
Earnings from subsidiaries | (42,441 | ) | — | 42,441 | — | |||||||||||||||
Losses from joint ventures | — | — | 1,533 | — | 1,533 | |||||||||||||||
Amortization of debt discount and issuance costs | 30,878 | — | 8,467 | — | 39,345 | |||||||||||||||
Accrued interest — paid in kind | — | — | 2,138 | — | 2,138 | |||||||||||||||
Gain on early retirement of debt | — | — | (1,183 | ) | — | (1,183 | ) | |||||||||||||
Changes in assets and liabilities: | ||||||||||||||||||||
Restricted cash | 28,417 | — | 5,716 | — | 34,133 | |||||||||||||||
Receivables, net | 89 | 836 | (3,846 | ) | — | (2,921 | ) | |||||||||||||
Inventories and prepaid expenses | (2,111 | ) | (2,264 | ) | (1,952 | ) | — | (6,327 | ) | |||||||||||
Accounts payable | (4,776 | ) | (7,289 | ) | (9,907 | ) | — | (21,972 | ) | |||||||||||
Accrued interest payable | 1,643 | 7 | 1,138 | — | 2,788 | |||||||||||||||
Accrued expenses and other current liabilities | (32,632 | ) | 4,354 | (7,050 | ) | — | (35,328 | ) | ||||||||||||
Intercompany receivables and payables | 49,360 | (58,197 | ) | 8,837 | — | — | ||||||||||||||
Other, net | (1,091 | ) | 421 | 287 | — | (383 | ) | |||||||||||||
Net cash provided by operating activities | 4,071 | 18,150 | 42,628 | — | 64,849 | |||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Capital expenditures | 2,018 | (17,234 | ) | (12,122 | ) | — | (27,338 | ) | ||||||||||||
Proceeds from sale of property and equipment | — | 117 | 128 | — | 245 | |||||||||||||||
Distributions in excess of earnings from joint ventures | — | — | 882 | — | 882 | |||||||||||||||
Distributions from subsidiaries | 1,024 | — | — | (1,024 | ) | — | ||||||||||||||
Construction contracts payable | — | 242 | 171 | — | 413 | |||||||||||||||
Native American development costs | — | — | (4,873 | ) | — | (4,873 | ) | |||||||||||||
Proceeds from repayment of Native American development costs | — | — | 32,305 | — | 32,305 | |||||||||||||||
Other, net | — | 67 | (2,540 | ) | — | (2,473 | ) | |||||||||||||
Net cash provided by (used in) investing activities | 3,042 | (16,808 | ) | 13,951 | (1,024 | ) | (839 | ) | ||||||||||||
7
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (Continued) FOR THE PERIOD JUNE 17, 2011 THROUGH DECEMBER 31, 2011 (Unaudited, amounts in thousands) | ||||||||||||||||||||
Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Borrowings under credit agreements with original maturities of three months or less, net | 8,400 | — | 7,800 | — | 16,200 | |||||||||||||||
Payments under credit agreements with original maturities greater than three months | (23,246 | ) | — | (62,603 | ) | — | (85,849 | ) | ||||||||||||
Distributions to members | (56 | ) | — | (6,731 | ) | 1,024 | (5,763 | ) | ||||||||||||
Debt issuance costs | (386 | ) | — | (81 | ) | — | (467 | ) | ||||||||||||
Other, net | (769 | ) | (116 | ) | (4,575 | ) | — | (5,460 | ) | |||||||||||
Net cash used in financing activities | (16,057 | ) | (116 | ) | (66,190 | ) | 1,024 | (81,339 | ) | |||||||||||
Cash and cash equivalents: | ||||||||||||||||||||
(Decrease) increase in cash and cash equivalents | (8,944 | ) | 1,226 | (9,611 | ) | — | (17,329 | ) | ||||||||||||
Balance, beginning of period | 6,524 | 49,253 | 57,373 | — | 113,150 | |||||||||||||||
Balance, end of period | $ | (2,420 | ) | $ | 50,479 | $ | 47,762 | $ | — | $ | 95,821 | |||||||||
Supplemental cash flow disclosures: | ||||||||||||||||||||
Cash paid for interest, net of amounts capitalized | $ | 33,181 | $ | 43 | $ | 18,623 | $ | — | $ | 51,847 | ||||||||||
8
STATION CASINOS LLC AND RESTRICTED SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010
(Unaudited)
Presentation
The results of operations presented below for the year ended December 31, 2011 were derived by the mathematical additional of the results of Station Casinos LLC (the "Company", "we" or "our") and the Guarantor Subsidiaries (the "Restricted Subsidiaries") for the period June 17, 2011 through December 31, 2011, and the results of Station Casinos, Inc. ("STN") and its subsidiaries that were predecessors to the Restricted Subsidiaries for the period January 1, 2011 through June 16, 2011. The results for the year ended December 31, 2010 represent the results of Station Casinos, Inc. and its operating subsidiaries that were predecessors to the Restricted Subsidiaries. References herein to "Propco Successor" refer to the Company and the Restricted Subsidiaries on or after June 17, 2011 (the "Effective Date"), and references herein to the "Propco Predecessor" refer to STN and its operating subsidiaries that were predecessors to the Restricted Subsidiaries before the Effective Date. The period after the Effective Date is referred to herein as the "Successor Period" and periods before the Effective Date are referred to as "Predecessor Periods."
The results of operations for the periods before June 17, 2011 and after June 17, 2011 are not fully comparable, particularly depreciation, amortization, interest expense and tax provision accounts, primarily due to the impact of the restructuring transactions and the adoption of fresh-start reporting.
Results of Operations
The following table highlights the combined results of operations for the year ended December 31, 2011 compared to the year ended December 31, 2010 (amounts in thousands):
Combined Propco Successor and Propco Predecessor | Propco Predecessor | ||||||||||||||
Year ended December 31, 2011 | Year ended December 31, 2010 | Change | Percent Change | ||||||||||||
Net revenues | $ | 641,133 | $ | 601,161 | $ | 39,972 | 6.6 | % | |||||||
Operating income | 63,736 | 8,827 | 54,909 | 622.1 | % | ||||||||||
Casino revenues | $ | 458,780 | $ | 435,619 | $ | 23,161 | 5.3 | % | |||||||
Casino expenses | 180,708 | 181,544 | (836 | ) | (0.5 | )% | |||||||||
Margin | 60.6 | % | 58.3 | % | 2.3 | % | |||||||||
Food and beverage revenues | 132,050 | 116,335 | 15,715 | 13.5 | % | ||||||||||
Food and beverage expenses | 96,105 | 74,829 | 21,276 | 28.4 | % | ||||||||||
Margin | 27.2 | % | 35.7 | % | (8.5 | )% | |||||||||
Room revenues | 65,608 | 60,349 | 5,259 | 8.7 | % | ||||||||||
Room expenses | 26,035 | 24,791 | 1,244 | 5.0 | % | ||||||||||
Margin | 60.3 | % | 58.9 | % | 1.4 | % | |||||||||
Other revenues | 34,526 | 29,882 | 4,644 | 15.5 | % | ||||||||||
Other expenses | 13,534 | 10,363 | 3,171 | 30.6 | % | ||||||||||
9
Combined Propco Successor and Propco Predecessor | Propco Predecessor | |||||||||||
Year ended December 31, 2011 | Year ended December 31, 2010 | Change | Percent Change | |||||||||
Selling, general and administrative expense | 158,908 | 160,155 | (1,247 | ) | (0.8 | )% | ||||||
Percent of net revenues | 24.8 | % | 26.6 | % | (1.8 | )% | ||||||
Management fee expense (June 17, 2011 through December 31, 2011) | 12,056 | — | n/m | n/m | ||||||||
Percent of net revenues | 3.5 | % | — | n/m | ||||||||
_____________________________________
n/m = not meaningful
Net Revenues and Operating Income. Combined net revenues for the year ended December 31, 2011 increased 6.6% to $641.1 million as compared to $601.2 million in 2010. The improvement in combined net revenues during the year ended December 31, 2011 as compared to the prior year reflects increases in revenues across all of our revenue categories. Combined operating income was $63.7 million for the year ended December 31, 2011, reflecting an improvement of $54.9 million as compared to operating income of $8.8 million for the year ended December 31, 2010.
Casino. Combined casino revenues increased 5.3% to $458.8 million for the year ended December 31, 2011 as compared to $435.6 million for the year ended December 31, 2010. The $23.2 million increase was primarily due to the success of our current marketing programs, which drove increased customer visits to our properties. Casino expenses for the year ended December 31, 2011 decreased by less than 1% as compared to casino expenses for the year ended December 31, 2010. The combined casino operating margin for the year ended December 31, 2011 increased to 60.6% as compared to 58.3% for the prior year.
Food and Beverage. Combined food and beverage revenues increased by 13.5% to $132.1 million for the year ended December 31, 2011 as compared to $116.3 million for the prior year, and the combined number of restaurant guests served increased by 37% for the year ended December 31, 2011 compared to the year ended December 31, 2010. During the year ended December 31, 2011, we took over the operations of three previously leased cafés. The increase in the number of restaurant guests served is primarily the result of the café conversions, as well as increased visitation to our restaurants across all of our properties. The average guest check decreased by 11.4% during the year ended December 31, 2011 as compared to the prior year, primarily as a result of the conversion of the cafés, which are lower priced restaurants. Combined food and beverage expenses increased by 28.4%, primarily due to the increases in revenues and number of guests served. The combined food and beverage margin for the year ended December 31, 2011 decreased to 27.2% compared to 35.7%, primarily as a result of the café conversions.
Room. The following table shows key information about our hotel operations:
Year ended December 31, 2011 | Year ended December 31, 2010 | Percent Change | |||||||||
Room occupancy | 85.8 | % | 81.7 | % | 4.1 | % | |||||
Average daily rate | $ | 72 | $ | 69 | 4.3 | % | |||||
Revenue per available room | $ | 62 | $ | 56 | 10.7 | % | |||||
Combined room revenues for the year ended December 31, 2011 increased by 8.7% as compared to the year ended December 31, 2010, primarily due to the improvement in occupancy. Combined room expenses for the year ended December 31, 2011 increase by 5.0% as compared to the year ended December 31, 2010, primarily as a result of the increased occupancy.
Other. Other revenues primarily include income from gift shops, bowling, entertainment, leased outlets and spa. Other revenues increased by $4.6 million and other expenses increased by $3.2 million for the year ended December 31, 2011 as compared to the year ended December 31, 2010. The improvement in other revenues during 2011 is primarily the result of increased visitation to our properties.
Selling, General and Administrative Expense ("SG&A"). SG&A expense decreased slightly to $158.9 million for the
10
year ended December 31, 2011 as compared to $160.2 million for the year ended December 31, 2010. SG&A as a percentage of net revenue decreased to 24.8% for the year ended December 31, 2011 as compared to 26.6% for the prior year.
Management Fee Expense. As of the Effective Date, we entered into long-term management agreements with affiliates of Fertitta Entertainment LLC (the "Managers") to manage our properties, and certain executive officers and corporate employees of STN became employees of Fertitta Entertainment LLC. Under the management agreements, we pay a base management fee equal to 2% of gross revenues and an incentive management fee equal to 5% of positive earnings before interest, taxes, depreciation and amortization ("EBITDA") (as defined in the agreements) for each of our managed properties. As a result, our statement of operations reflects management fee expense for which there was no comparable expense recorded by STN.
Liquidity and Capital Resources
The following liquidity and capital resources discussion contains certain forward-looking statements with respect to our business, financial condition, results of operations, expansion projects and our subsidiaries, which involve risks and uncertainties that cannot be predicted or quantified. The forward-looking statements are based upon a number of estimates and assumptions that, while considered reasonable by us, are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control, and are subject to change. Actual results of operations may vary materially from any forward-looking statement made herein. Forward-looking statements should not be regarded as a representation by us or any other person that the forward-looking statements will be achieved. Undue reliance should not be placed on any forward-looking statements. Some of the contingencies and uncertainties to which any forward-looking statement contained herein is subject include, but are not limited to, the risks described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2011.
Year Ended December 31, 2011
On the Effective Date, we borrowed approximately $1.7 billion under the Propco Credit Agreement, which is more fully described in the Company's Annual Report on Form 10-K for the year ended December 31, 2011.
At December 31, 2011, we had $48.1 million in cash and cash equivalents, which is primarily used for the day-to-day operations of our properties. Our restricted cash at December 31, 2011 totaled $1.6 million, primarily representing cash placed in escrow for the payment of remaining outstanding restructuring liabilities.
At December 31, 2011, we had $38.0 million in borrowing availability under the Propco Credit Agreement.
During the Successor Period, net cash provided by operating activities totaled $22.2 million. Net cash flows used in investing activities totaled $13.8 million for the Successor Period, primarily for capital expenditures at our properties. Net cash flows used in financing activities totaled $16.2 million, primarily representing net repayments on our indebtedness under the Propco credit agreement. For the period June 17, 2011 through December 31, 2011, interest expense totaled $65.8 million, comprising cash interest of $34.9 million and amortization of debt discount and debt issuance costs of $30.9 million.
As a result of the restructuring transactions, the adoption of fresh-start reporting, and the intercompany activity between the Propco Predecessor and STN's other subsidiaries, a comparison of the cash flows for Predecessor Periods to cash flows for the Successor Period is not meaningful.
Year Ending December 31, 2012
Our primary cash requirements for 2012 are expected to include (i) principal and interest payments on indebtedness totaling approximately $87 million, including approximately $75 million related to our indebtedness under the Propco credit agreement and approximately $9 million related to our interest rate swap agreement, and (ii) maintenance and other capital expenditures totaling approximately $36 million. Our cash flow may be affected by a variety of factors, many of which are outside our control, including regulatory issues, competition, financial markets and other general business conditions. Although we believe that cash flows from operations, available borrowings under our credit agreement and existing cash balances will be adequate to satisfy our anticipated uses of capital for the foreseeable future, and we are continually evaluating our liquidity position and our financing needs. We cannot provide assurance, however, that we will generate sufficient income and liquidity to meet all of our liquidity requirements or other obligations.
Off-Balance Sheet Arrangements and Contractual Obligations
As of December 31, 2011, we have certain off-balance sheet arrangements that affect our financial condition, liquidity and results of operations, including operating leases, employment contracts, long-term stay-on performance agreements and slot conversion purchase obligations.
The following table summarizes our contractual obligations and commitments (amounts in thousands, unaudited):
11
Long-term debt and interest rate swap (a) | Operating leases | Other long-term obligations (b) | Total contractual cash obligations | ||||||||||||
Payments due in the next twelve months as of December 31, | |||||||||||||||
2011 | $ | 86,662 | $ | 2,807 | $ | 11,478 | $ | 100,947 | |||||||
2012 | 85,956 | 2,693 | 272 | 88,921 | |||||||||||
2013 | 88,012 | 2,675 | 46 | 90,733 | |||||||||||
2014 | 90,639 | 2,675 | — | 93,314 | |||||||||||
2015 | 1,644,414 | 2,675 | — | 1,647,089 | |||||||||||
Thereafter | 40,268 | 111,021 | — | 151,289 | |||||||||||
Total | $ | 2,035,951 | $ | 124,546 | $ | 11,796 | $ | 2,172,293 | |||||||
____________________________________
(a) | Includes principal and contractual interest on long-term debt and projected cash payments on interest rate swaps based on interest rates in effect at December 31, 2011, except for contractual interest payments related to the Senior Notes, which are based on the interest rate in effect at January 3, 2012. |
(b) | Other long-term obligations include employment contracts, long-term stay-on agreements and slot conversion purchase obligations. |
Description of Certain Indebtedness and Capital Stock
See the Company's Annual Report on Form 10-K for the year ended December 31, 2011 for a description of the Propco Credit Agreement and the Senior Notes.
Derivative Instruments
We have entered into an interest rate swap to manage our exposure to interest rate risk. At December 31, 2011 we have a floating-to-fixed interest rate swap with a notional amount of $841.4 million which matures in 2015. This interest rate swap effectively converts a portion of our variable-rate debt to a fixed rate, and we have designated it as a cash flow hedging instrument for accounting purposes. As of December 31, 2011, we paid a fixed interest rate of 1.29% and received a variable interest rate of 0.27% on this interest rate swap.
The difference between amounts received and paid under our interest rate swap agreements, as well as any costs or fees, is recorded as a reduction of, or an addition to, interest expense as incurred over the life of the interest rate swaps. For the period June 17, 2011 through December 31, 2011, the swap increased our interest expense by $3.8 million.
Critical Accounting Policies and Estimates
See the Company's Annual Report on Form 10-K for the year ended December 31, 2011 for a description of our critical accounting policies and estimates.
12