Debt

Debt at December 31, 2013 and 2012 consists of the following (in thousands):



	2013		2012
(1) Mortgage note payable, 5.73%, settled on March 4, 2013	$	—	$	14,314
(2) Mortgage note payable, 6.84%, paid in full June 20, 2013	—		92,773
(3) Mortgage note payable, 5.58%, paid in full June 24, 2013	—		57,078
(4) Mortgage note payable, 5.56%, due June 5, 2015	31,235		31,923
(5) Mortgage note payable, 5.39%, due November 1, 2015	5,274		—
(6) Mortgage notes payable, 5.77%, due November 6, 2015	65,070		67,172
(7) Mortgage notes payable, 5.84%, due March 6, 2016	36,724		37,863
(8) Mortgage notes payable, 6.37%, due June 30, 2016	26,406		27,156
(9) Mortgage notes payable, 6.10%, due October 1, 2016	23,719		24,395
(10) Mortgage notes payable, 6.02%, due October 6, 2016	17,866		18,381
(11) Mortgage note payable, 6.06%, due March 1, 2017	9,986		10,261
(12) Mortgage note payable, 6.07%, due April 6, 2017	10,284		10,565
(13) Mortgage notes payable, 5.73%-5.95%, due May 1, 2017	33,660		34,600
(14) Mortgage note payable, 5.29%, due July 1, 2017	3,746		3,881
(15) Unsecured revolving variable rate credit facility, LIBOR + 1.40%, due July 23, 2017	—		39,000
(16) Mortgage notes payable, 5.86% due August 1, 2017	24,387		25,053
(17) Mortgage note payable, 6.19%, due February 1, 2018	14,486		15,084
(18) Mortgage note payable, 7.37%, due July 15, 2018	7,498		8,698
(19) Unsecured term loan payable, LIBOR + 1.60%, fixed through interest rate swaps at 2.51% through January 5, 2016 and 2.38% from January 5, 2016 to July 5, 2017, due July 23, 2018	265,000		240,000
(20) Senior unsecured notes payable, 7.75%, due July 15, 2020	250,000		250,000
(21) Senior unsecured notes payable, 5.75%, due August 15, 2022	350,000		350,000
(22) Senior unsecured notes payable, 5.25%, due July 15, 2023	275,000		—
(23) Bonds payable, variable rate, due October 1, 2037	24,995		10,635
Total	$	1,475,336	$	1,368,832

(1) On March 4, 2013, the Company entered into a Discounted Payoff and Settlement Agreement (the Agreement) related to this loan agreement which was secured by one theatre property located in Omaha, Nebraska. Pursuant to the Agreement, the Company made a cash payment of $9.7 million that included a forfeited restricted cash account with a balance of $1.2 million in full satisfaction of the loan. Accordingly, the Company recorded a gain on early extinguishment of debt of $4.5 million during the year ended December 31, 2013.

(2) The Company’s mortgage note payable was prepaid in full on June 20, 2013 prior to its maturity date of March 1, 2014. The notes were secured by four entertainment retail centers in Ontario, Canada. In connection with the payment in full of the mortgage note, $192 thousand of deferred financing costs (net of accumulated amortization) were written off and $4.0 million of additional costs associated with loan payoff were incurred.

(3) The Company’s mortgage note payable was prepaid in full on June 24, 2013 prior to is maturity date of April 1, 2014. The note was secured by one entertainment retail center. In connection with the payment in full of the mortgage note, $47 thousand of deferred financing costs (net of accumulated amortization) were written off and $1.7 million of additional costs associated with loan payoff were incurred.

(4) The Company’s mortgage note payable due June 5, 2015 is secured by one entertainment retail center, which had a net book value of approximately $48.4 million at December 31, 2013. The note had an initial balance of $36.0 million and the monthly payments are based on a 30 year amortization schedule. The note requires monthly principal and interest payments of approximately $206 thousand with a final principal payment at maturity of approximately $30.1 million.

(5) On September 25, 2013, the Company assumed a mortgage note payable of $5.4 million in conjunction with the acquisition of a theatre property, which had a net book value of $11.2 million at December 31, 2013 . The note bears interest at a fixed rate of 5.39% and matures on November 1, 2015. The note requires monthly principal and interest payments of approximately $50 thousand with a final principal payment at maturity of $4.7 million. Upon acquisition, the carrying value of the note approximated fair value.

(6) The Company’s mortgage notes payable due November 6, 2015 are secured by six theatre properties, which had a net book value of approximately $76.5 million at December 31, 2013. The notes had initial balances totaling $79.0 million and the monthly payments are based on a 25 year amortization schedule. The notes require monthly principal and interest payments totaling approximately $498 thousand with a final principal payment at maturity totaling approximately $60.7 million.

(7) The Company’s mortgage notes payable due March 6, 2016 are secured by two theatre properties, which had a net book value of approximately $32.3 million at December 31, 2013. The notes had initial balances totaling $44.0 million and the monthly payments are based on a 25 year amortization schedule. The notes require monthly principal and interest payments totaling approximately $279 thousand with a final principal payment at maturity totaling approximately $33.9 million.

(8) The Company’s mortgage notes payable due June 30, 2016 are secured by two theatre properties, which had a net book value of approximately $31.8 million at December 31, 2013. The notes had initial balances totaling $31.0 million and the monthly payments are based on a 25 year amortization schedule. The notes require monthly principal and interest payments totaling approximately $207 thousand with a final principal payment at maturity totaling approximately $24.4 million.

(9) The Company’s mortgage notes payable due October 1, 2016 are secured by four theatre properties, which had a net book value of approximately $26.9 million at December 31, 2013. The notes had initial balances totaling $27.8 million and the monthly payments are based on a 25 year amortization schedule. The notes require monthly principal and interest payments totaling approximately $180 thousand with a final principal payment at maturity totaling approximately $21.6 million.

(10) The Company’s mortgage notes payable due October 6, 2016 are secured by three theatre properties, which had a net book value of approximately $19.2 million at December 31, 2013. The notes had initial balances totaling $20.9 million and the monthly payments are based on a 25 year amortization schedule. The notes require monthly principal and interest payments totaling approximately $135 thousand with a final principal payment at maturity totaling approximately $16.2 million.

(11) The Company’s mortgage note payable due March 1, 2017 is secured by one theatre property, which had a net book value of approximately $9.4 million at December 31, 2013. The note had an initial balance of $11.6 million and the monthly payments are based on a 25 year amortization schedule. The note requires monthly principal and interest payments of approximately $75 thousand with a final principal payment at maturity of approximately $9.0 million.

(12) The Company’s mortgage note payable due April 6, 2017 is secured by one theatre property, which had a net book value of approximately $9.0 million at December 31, 2013. The note had an initial balance of $11.9 million and the monthly payments are based on a 30 year amortization schedule. The note requires monthly principal and interest payments of approximately $77 thousand with a final principal payment at maturity of approximately $9.2 million.

(13) The Company’s mortgage notes payable due May 1, 2017 are secured by four theatre properties, which had a net book value of approximately $30.8 million at December 31, 2013. The notes had initial balances totaling $38.9 million and the monthly payments are based on a 25 year amortization schedule. The notes require monthly principal and interest payments totaling approximately $247 thousand with a final principal payment at maturity totaling approximately $30.0 million. The weighted average interest rate on these notes is 5.85%.

(14) On March 3, 2011, the Company assumed a mortgage note payable of $3.8 million in conjunction with the acquisition of a theatre property. The note was recorded at fair value upon acquisition which was estimated to be $4.1 million. The fair value of the note was determined by discounting the future cash flows of the note using an estimated current market rate of 5.29%. The note is due July 1, 2017 and is secured by one theatre property, which had a net book value of approximately $8.4 million at December 31, 2013. The monthly payments are based on a 25 year amortization schedule and the note requires monthly principal and interest payments of approximately $28 thousand with a final principal payment at maturity of approximately $3.2 million.

(15) On July 23, 2013, the Company amended and restated its unsecured revolving credit facility (the facility). The amendments to the facility (i) increase the initial amount from $400.0 million to $440.0 million and increase the accordion such that the maximum borrowing amount available under the facility increased from $500.0 million to $600.0 million, (ii) extend the maturity date from October 13, 2015, to July 23, 2017 (with the Company having the same right as before to extend the loan for one additional year, subject to certain terms and conditions), (iii) lower the interest rate and facility fee pricing based on a grid related to the Company's senior unsecured credit ratings which was LIBOR plus 1.40% and 0.30%, respectively, at closing, (iv) revise certain definitions to broaden the types of properties eligible for consideration in the borrowing base, (v) increase borrowing base availability by increasing the values assigned to the Company's properties and (vi) add four new subsidiary borrowers. In connection with the amendment, $188 thousand of deferred financing costs (net of accumulated amortization) were written off. The Company subsequently exercised a portion of the accordion under its new unsecured revolving credit facility to increase the initial borrowing amount available under the facility from $440.0 million to $475.0 million. As of December 31, 2013, the Company had no balance outstanding under the facility and the total availability under the revolving credit facility was $475.0 million.

(16) The Company’s mortgage notes payable due August 1, 2017 are secured by two theatre properties, which had a net book value of approximately $22.7 million at December 31, 2013. The notes had initial balances totaling $28.0 million and the monthly payments are based on a 25 year amortization schedule. The notes require monthly principal and interest payments totaling approximately $178 thousand with a final principal payment at maturity totaling approximately $21.7 million.

(17) The Company’s mortgage note payable due February 1, 2018 is secured by one theatre property which had a net book value of approximately $20.0 million at December 31, 2013. The mortgage loan had an initial balance of $17.5 million and the monthly payments are based on a 20 year amortization schedule. The note requires monthly principal and interest payments of approximately $127 thousand with a final principal payment at maturity of approximately $11.6 million.

(18) The Company’s mortgage note payable due July 15, 2018 is secured by one theatre property, which had a net book value of approximately $17.9 million at December 31, 2013. The note had an initial balance of $18.9 million and the monthly payments are based on a 20 year amortization schedule. The notes require monthly principal and interest payments of approximately $151 thousand with a final principal payment at maturity of approximately $843 thousand.

(19) On July 23, 2013, the Company amended and restated its unsecured term loan payable. The amendments to the unsecured term loan facility (i) increase the initial amount from $255.0 million to $265.0 million and increase the accordion such that the maximum amount available under the facility increased from $350.0 million to $400.0 million, (ii) extend the maturity date from January 5, 2017, to July 23, 2018, (iii) lower the interest rate in all but the lowest senior unsecured credit rating tiers which was LIBOR plus 1.60% at closing and (iv) add four new subsidiary borrowers.

(20) On June 30, 2010, the Company issued $250.0 million in senior unsecured notes due on July 15, 2020. The notes bear interest at 7.75%. Interest is payable on July 15 and January 15 of each year beginning on January 15, 2011 until the stated maturity date of July 15, 2020. The notes were issued at 98.29% of their principal amount and are guaranteed by certain of the Company’s subsidiaries. The notes contain various covenants, including: (i) a limitation on incurrence of any debt that would cause the ratio of the Company’s debt to adjusted total assets to exceed 60%; (ii) a limitation on incurrence of any secured debt which would cause the ratio of the Company’s secured debt to adjusted total assets to exceed 40%; (iii) a limitation on incurrence of any debt which would cause the Company’s debt service coverage ratio to be less than 1.5 times; and (iv) the maintenance at all times of total unencumbered assets not less than 150% of the Company’s outstanding unsecured debt.

(21) On August 8, 2012, the Company issued $350.0 million in senior unsecured notes due on August 15, 2022. The notes bear interest at 5.75%. Interest is payable on February 15 and August 15 of each year beginning on February 15, 2013 until the stated maturity date of August 15, 2022. The notes were issued at 99.998% of their principal amount and are guaranteed by certain of the Company’s subsidiaries. The notes contain various covenants, including: (i) a limitation on incurrence of any debt that would cause the ratio of the Company’s debt to adjusted total assets to exceed 60%; (ii) a limitation on incurrence of any secured debt which would cause the ratio of the Company’s secured debt to adjusted total assets to exceed 40%; (iii) a limitation on incurrence of any debt which would cause the Company’s debt service coverage ratio to be less than 1.5 times; and (iv) the maintenance at all times of total unencumbered assets not less than 150% of the Company’s outstanding unsecured debt.

(22) On June 18, 2013, the Company issued $275.0 million in senior unsecured notes due on July 15, 2023. The notes bear interest at 5.25%. Interest is payable on January 15 and July 15 of each year beginning on January 15, 2014 until the stated maturity date of July 15, 2023. The notes were issued at 99.546% of their principal amount and are guaranteed by certain of the Company’s subsidiaries. The notes contain various covenants, including: (i) a limitation on incurrence of any debt that would cause the ratio of the Company’s debt to adjusted total assets to exceed 60%; (ii) a limitation on incurrence of any secured debt which would cause the ratio of the Company’s secured debt to adjusted total assets to exceed 40%; (iii) a limitation on incurrence of any debt which would cause the Company’s debt service coverage ratio to be less than 1.5 times and (iv) the maintenance at all times of the Company's total unencumbered assets such that they are not less than 150% of the Company’s outstanding unsecured debt.

(23) The Company’s bonds payable due October 1, 2037 are secured by three theatres, which had a net book value of approximately $23.8 million at December 31, 2013, and bear interest at a variable rate which resets on a weekly basis and was 0.06% at December 31, 2013. The bonds requires monthly interest only payments with principal due at maturity.

Certain of the Company’s debt agreements contain customary restrictive covenants related to financial and operating performance as well as certain cross-default provisions. The Company was in compliance with all financial covenants at December 31, 2013.

Principal payments due on long-term debt obligations subsequent to December 31, 2013 (without consideration of any extensions) are as follows (in thousands):



	Amount
Year:
2014	$	10,911
2015	106,448
2016	102,910
2017	76,690
2018	278,382
Thereafter	899,995
Total	$	1,475,336

The Company capitalizes a portion of interest costs as a component of property under development. The following is a summary of interest expense, net for the years ended December 31, 2013, 2012 and 2011 (in thousands):



	2013			2012			2011
Interest on loans and capital lease obligation	$	78,292		$	71,849		$	67,265
Less: interest expense of discontinued operations	—			—			(405		)
Amortization of deferred financing costs	4,041			4,218			3,807
Credit facility and letter of credit fees	1,510			1,515			1,159
Interest cost capitalized	(2,763		)	(859		)	(498		)
Interest income	(53		)	(79		)	(70		)
Less: interest income of discontinued operations	29			12			37
Interest expense, net	$	81,056		$	76,656		$	71,295