Debt

3 Months Ended

Mar. 31, 2023

Debt

Debt

8. DEBT:

The Company’s debt and finance lease obligations at March 31, 2023 and December 31, 2022 consisted of (in thousands):

	March 31,		December 31,
	2023		2022
$700M Revolving Credit Facility, interest at LIBOR plus 1.50%, maturing March 31, 2024	$	—	$	—
$500M Term Loan B, interest at LIBOR plus 2.00%, maturing May 11, 2024		370,000		371,250
$600M Senior Notes, interest at 4.50%, maturing February 15, 2029		600,000		600,000
$700M Senior Notes, interest at 4.75%, maturing October 15, 2027		700,000		700,000
$800M Gaylord Rockies Term Loan, interest at LIBOR plus 2.50%, maturing July 2, 2023		800,000		800,000
$300M OEG Term Loan, interest at SOFR plus 5.00%, maturing June 16, 2029		298,500		299,250
$65M OEG Revolver, interest at SOFR plus 4.75%, maturing June 16, 2027		7,000		—
Block 21 CMBS Loan, interest at 5.58%, maturing January 5, 2026		133,934		134,636
Finance lease obligations		618		685
Unamortized deferred financing costs		(30,912)		(30,482)
Unamortized discount		(12,242)		(12,747)
Total debt	$	2,866,898	$	2,862,592

Amounts due within one year consist of the $800 million Gaylord Rockies term loan, the amortization payments for the $500 million term loan B of 1.0% of the original principal balance, amortization payments for the $300 million OEG term loan of 1.0% of the original principal balance, and amortization of the Block 21 CMBS loan based on a 30-year amortization. The Gaylord Rockies term loan has three, one-year extension options, subject to certain requirements in the Gaylord Rockies term loan. The Company has fulfilled the necessary requirements to exercise the first of these extension options.

At March 31, 2023, there were no defaults under the covenants related to the Company’s outstanding debt.

Interest Rate Derivatives

The Company has entered into interest rate swaps to manage interest rate risk associated with the Company’s $500 million term loan B, the Gaylord Rockies $800 million term loan and the $300 million OEG term loan. Each swap has been designated as a cash flow hedge whereby the Company receives variable-rate amounts in exchange for fixed-rate payments over the life of the agreement without exchange of the underlying principal amount. The Company does not use derivatives for trading or speculative purposes and currently does not hold any derivatives that are not designated as hedges.

For derivatives designated as and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive loss and subsequently reclassified to interest expense in the same period during which the hedged transaction affects earnings. These amounts reported in accumulated other comprehensive loss will be reclassified to interest expense as interest payments are made on the related variable-rate debt. The Company estimates that $5.9 million will be reclassified from accumulated other comprehensive income as a reduction to interest expense in the next twelve months.

The estimated fair value of the Company’s derivative financial instruments at March 31, 2023 and December 31, 2022 is as follows (in thousands):

							Estimated Fair Value
							Asset (Liability) Balance
		Strike			Notional		March 31,		December 31,
Hedged Debt	Type	Rate	Index	Maturity Date	Amount		2023		2022
Term Loan B	Interest Rate Swap	1.2235%	1-month LIBOR	May 11, 2023	$	87,500	$	356	$	1,096
Term Loan B	Interest Rate Swap	1.2235%	1-month LIBOR	May 11, 2023		87,500		356		1,096
Term Loan B	Interest Rate Swap	1.2235%	1-month LIBOR	May 11, 2023		87,500		356		1,096
Term Loan B	Interest Rate Swap	1.2315%	1-month LIBOR	May 11, 2023		87,500		355		1,093
Gaylord Rockies Term Loan	Interest Rate Swap	3.3410%	1-month LIBOR	August 1, 2023		800,000		4,388		6,969
OEG Term Loan	Interest Rate Swap	4.5330%	3-month SOFR	December 18, 2025		100,000		(1,904)		(1,164)
							$	3,907	$	10,186

Derivative financial instruments in an asset position are included in prepaid expenses and other assets, and those in a liability position are included in other liabilities in the accompanying condensed consolidated balance sheets.

The effect of the Company’s derivative financial instruments on the accompanying condensed consolidated statements of operations for the respective periods is as follows (in thousands):

	Amount of Gain (Loss)					Amount of Gain (Loss)
	Recognized in OCI on					Reclassified from Accumulated
	Derivative				Location of Gain (Loss)	OCI into Income (Expense)
	Three Months Ended				Reclassified from	Three Months Ended
	March 31,				Accumulated OCI	March 31,
	2023		2022		into Income (Expense)	2023		2022
Derivatives in Cash Flow Hedging Relationships:
Interest rate swaps	$	(1,010)	$	6,070	Interest expense	$	5,268	$	(3,949)
Total derivatives	$	(1,010)	$	6,070		$	5,268	$	(3,949)

Reclassifications from accumulated other comprehensive loss for interest rate swaps are shown in the table above and included in interest expense. Total consolidated interest expense for the three months ended March 31, 2023 and 2022 was $42.5 million and $31.9 million, respectively.

At March 31, 2023, the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $1.9 million. As of March 31, 2023, the Company has not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at the aggregate termination value of $2.0 million. In addition, the Company has an agreement with its derivative counterparty that contains a provision whereby the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness.