Notes Receivable

12 Months Ended

Dec. 31, 2016

Receivables [Abstract]

Notes Receivable

3. Notes Receivable

In connection with the development of Gaylord National, Prince George’s County, Maryland (“the County”) issued a bond with a face value of $95 million (“Series A Bond”) in April 2005 and placed into escrow until substantial completion of the convention center and 1,500 rooms within the hotel. The Series A Bond and an additional bond issuance, with a face value of $50 million (“Series B Bond”), were delivered to the Company upon substantial completion and opening of the Gaylord National on April 2, 2008. The interest rate on the Series A Bond and Series B Bond is 8.0% and 10.0%, respectively. The maturity date of the Series A Bond and the Series B Bond is July 1, 2034 and September 1, 2037, respectively.

Upon receipt in 2008, the Company calculated the present value of the future debt service payments from the Series A Bond and Series B Bond based on their effective interest rates of 8.04% and 11.42%, respectively, and recorded the notes receivable at their discounted values of $93.8 million and $38.3 million, respectively. The Company is currently holding the Series A Bond and Series B Bond, which have aggregate carrying values of $82.7 million and $70.2 million, respectively, as of December 31, 2016, and receiving the debt service and principal payments thereon, which is payable from tax increments, hotel taxes and special hotel rental taxes generated from the development through the maturity date. The Company is recording the amortization of discount on these notes receivable as interest income over the life of the notes.

During 2016, 2015 and 2014, the Company recorded interest income of $11.4 million, $12.3 million and $12.1 million, respectively, on these bonds. The Company received payments of $11.1 million, $9.4 million and $10.8 million during 2016, 2015 and 2014, respectively, relating to these notes receivable, which includes principal and interest payments. See additional discussion regarding the fair value of these notes receivable in Note 13.