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Notes Payable, Long Term Debt and Other Obligations (Tables)
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12 Months Ended |
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Dec. 31, 2014
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| Debt Disclosure [Abstract] |
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| Notes payable, long-term debt and other obligations |
Notes payable, long-term debt and other obligations consist of:
| | | | | | | | | | December 31, 2014 | | December 31, 2013 | Vector: |
| | |
| 7.75% Senior Secured Notes due 2021, including premium of $9,275 and $0 | $ | 609,275 |
| | $ | 450,000 |
| 6.75% Variable Interest Senior Convertible Note due 2015 (as amended), net of unamortized discount of $0 and $19,311* | 25,000 |
| | 30,689 |
| 6.75% Variable Interest Senior Convertible Exchange Notes due 2014, net of unamortized discount of $0 and $25,944* | — |
| | 81,586 |
| 5.5% Variable Interest Senior Convertible Debentures due 2020, net of unamortized discount of $98,831 and $0* | 159,919 |
| | — |
| 7.5% Variable Interest Senior Convertible Notes due 2019, net of unamortized discount of $146,634 and $155,817* | 83,366 |
| | 74,183 |
| Liggett: | | | | Revolving credit facility | 17,767 |
| | 30,424 |
| Term loan under credit facility | 3,589 |
| | 3,884 |
| Equipment loans | 13,966 |
| | 17,252 |
| Other | 469 |
| | 4,325 |
| Total notes payable, long-term debt and other obligations | 913,351 |
| | 692,343 |
| Less: | |
| | |
| Current maturities | (52,640 | ) | | (151,577 | ) | Amount due after one year | $ | 860,711 |
| | $ | 540,766 |
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_____________________________ | | * | The fair value of the derivatives embedded within the 6.75% Variable Interest Senior Convertible Note ($884 at December 31, 2014 and $6,607 at December 31, 2013, respectively), the 6.75% Variable Interest Senior Convertible Exchange Notes ($0 at December 31, 2014 and $12,521 at December 31, 2013, respectively), the 5.50% Variable Interest Senior Convertible Debentures ($80,864 at December 31, 2014 and $0 at December 31, 2013, respectively), and the 7.5% Variable Interest Senior Convertible Debentures ( $87,638 at December 31, 2014 and $92,934 at December 31, 2013, respectively) is separately classified as a derivative liability in the condensed consolidated balance sheets. |
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| Schedule of Amortization Of Debt Discount Created By Embedded Derivative |
A summary of non-cash interest expense associated with the amortization of the debt discount created by the embedded derivative liability associated with the Company’s variable interest senior convertible debt is as follows:
| | | | | | | | | | | | | | Year Ended December 31, | | 2014 | | 2013 | | 2012 | 6.75% note | $ | 6,097 |
| | $ | 5,914 |
| | $ | 2,842 |
| 6.75% exchange notes | 13,570 |
| | 11,799 |
| | 7,416 |
| 3.875% convertible debentures | — |
| | 155 |
| | 57 |
| 7.5% convertible notes | 5,553 |
| | 3,614 |
| | 369 |
| 5.5% convertible notes | 6,851 |
| | — |
| | — |
| Interest expense associated with embedded derivatives | $ | 32,071 |
| | $ | 21,482 |
| | $ | 10,684 |
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| Schedule Of Changes In Fair Value Of Derivatives |
A summary of non-cash changes in fair value of derivatives embedded within convertible debt is as follows: | | | | | | | | | | | | | | Year Ended December 31, | | 2014 | | 2013 | | 2012 | 6.75% note | $ | 3,212 |
| | $ | 5,075 |
| | $ | 5,247 |
| 6.75% exchange notes | 8,990 |
| | 9,625 |
| | 9,940 |
| 3.875% convertible debentures | — |
| | (1,417 | ) | | (22,281 | ) | 7.5% convertible notes | 5,296 |
| | 5,652 |
| | (382 | ) | 5.5% convertible notes | 1,911 |
| | — |
| | — |
| Gain (loss) on changes in fair value of derivatives embedded within convertible debt | $ | 19,409 |
| | $ | 18,935 |
| | $ | (7,476 | ) |
The following table reconciles the fair value of derivatives embedded within convertible debt:
| | | | | | | | | | | | | | | | | | | | | | | | | | 6.75% Note | | 6.75% Exchange Notes | | 3.875% Convertible Debentures | | 7.5% Convertible Notes | | 5.5% Convertible Notes | | Total | Balance at January 1, 2012 | $ | 16,929 |
| | $ | 32,086 |
| | $ | 84,485 |
| | $ | — |
| | $ | — |
| | $ | 133,500 |
| Conversion of $55,778 of 3.875% Variable Interest Senior Convertible Debentures due June 15, 2016 | — |
| | — |
| | (67,052 | ) | | — |
| | — |
| | (67,052 | ) | Issuance of 7.5% Note | — |
| | — |
| | — |
| | 98,204 |
| | — |
| | 98,204 |
| (Gain) loss from changes in fair value of embedded derivatives | (5,247 | ) | | (9,940 | ) | | 22,281 |
| | 382 |
| | — |
| | 7,476 |
| Balance at December 31, 2012 | 11,682 |
| | 22,146 |
| | 39,714 |
| | 98,586 |
| | — |
| | 172,128 |
| Conversion of $43,222 of 3.875% Variable Interest Senior Convertible Debentures due June 15, 2016 | — |
| | — |
| | (41,131 | ) | | — |
| | — |
| | (41,131 | ) | (Gain) loss from changes in fair value of embedded derivatives | (5,075 | ) | | (9,625 | ) | | 1,417 |
| | (5,652 | ) | | — |
| | (18,935 | ) | Balance at December 31, 2013 | 6,607 |
| | 12,521 |
| | — |
| | 92,934 |
| | — |
| | 112,062 |
| Conversion of $25,000 of 6.75% Variable Interest Senior Convertible Note due February 15, 2015 | (2,511 | ) | | — |
| | — |
| | — |
| | — |
| | (2,511 | ) | Conversion of $107,530 of 6.75% Variable Interest Senior Convertible Exchange Notes due November 15, 2014 | — |
| | (3,531 | ) | | — |
| | — |
| | — |
| | (3,531 | ) | Issuance of 5.5% Note | — |
| | — |
| | — |
| | — |
| | 82,775 |
| | 82,775 |
| Gain from changes in fair value of embedded derivatives | (3,212 | ) | | (8,990 | ) | | — |
| | (5,296 | ) | | (1,911 | ) | | (19,409 | ) | Balance at December 31, 2014 | $ | 884 |
| | $ | — |
| | $ | — |
| | $ | 87,638 |
| | $ | 80,864 |
| | $ | 169,386 |
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| Components of non-cash interest expense |
A summary of non-cash interest expense associated with the amortization of the debt discount created by the beneficial conversion feature on the Company’s variable interest senior convertible debt is as follows:
| | | | | | | | | | | | | | Year Ended December 31, | | 2014 | | 2013 | | 2012 | Amortization of beneficial conversion feature: | |
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| | |
| 6.75% note | $ | 5,317 |
| | $ | 5,157 |
| | $ | 2,479 |
| 6.75% exchange notes | 8,386 |
| | 7,294 |
| | 4,582 |
| 3.875% convertible debentures | — |
| | 82 |
| | 30 |
| 7.5% convertible notes | 3,631 |
| | 2,363 |
| | 241 |
| 5.5% convertible notes | 2,067 |
| | — |
| | — |
| Interest expense associated with beneficial conversion feature | $ | 19,401 |
| | $ | 14,896 |
| | $ | 7,332 |
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| Schedule of Unamortized Debt Discount |
The following table reconciles unamortized debt discount within convertible debt:
| | | | | | | | | | | | | | | | | | | | | | | | | | 6.75% Note | | 6.75% Exchange Notes | | 3.875% Convertible Debentures | | 7.5% Convertible Notes | | 5.5% Convertible Notes | | Total | Balance at January 1, 2012 | $ | 35,704 |
| | $ | 57,036 |
| | $ | 82,948 |
| | $ | — |
| | $ | — |
| | $ | 175,688 |
| Conversion of $55,778 of 3.875% Variable Interest Senior Convertible Debentures due June 15, 2016 | — |
| | — |
| | (46,754 | ) | | — |
| | — |
| | (46,754 | ) | Issuance of convertible notes - embedded derivative | — |
| | — |
| | — |
| | 98,204 |
| | — |
| | 98,204 |
| Issuance of convertible notes - beneficial conversion feature | — |
| | — |
| | — |
| | 64,201 |
| | — |
| | 64,201 |
| Amortization of embedded derivatives | (2,842 | ) | | (7,416 | ) | | (57 | ) | | (369 | ) | | — |
| | (10,684 | ) | Amortization of beneficial conversion feature | (2,479 | ) | | (4,582 | ) | | (30 | ) | | (241 | ) | | — |
| | (7,332 | ) | Balance at December 31, 2012 | 30,383 |
| | 45,038 |
| | 36,107 |
| | 161,795 |
| | — |
| | 273,323 |
| Conversion of $43,222 of 3.875% Variable Interest Senior Convertible Debentures due June 15, 2016 | — |
| | — |
| | (35,870 | ) | | — |
| | — |
| | (35,870 | ) | Amortization of embedded derivatives | (5,914 | ) | | (11,799 | ) | | (155 | ) | | (3,614 | ) | | — |
| | (21,482 | ) | Amortization of beneficial conversion feature | (5,157 | ) | | (7,294 | ) | | (82 | ) | | (2,363 | ) | | — |
| | (14,896 | ) | Balance at December 31, 2013 | 19,312 |
| | 25,945 |
| | — |
| | 155,818 |
| | — |
| | 201,075 |
| Conversion of $25,000 of 6.75% Variable Interest Senior Convertible Note due February 15, 2015 | (7,898 | ) | | — |
| | — |
| | — |
| | — |
| | (7,898 | ) | Conversion of $107,530 of 6.75% Variable Interest Senior Convertible Exchange Notes due November 15, 2014 | — |
| | (3,989 | ) | | — |
| | — |
| | — |
| | (3,989 | ) | Issuance of convertible notes - embedded derivative | — |
| | — |
| | — |
| | — |
| | 82,775 |
| | 82,775 |
| Issuance of convertible notes - beneficial conversion feature | — |
| | — |
| | — |
| | — |
| | 24,974 |
| | 24,974 |
| Amortization of embedded derivatives | (6,097 | ) | | (13,570 | ) | | — |
| | (5,553 | ) | | (6,851 | ) | | (32,071 | ) | Amortization of beneficial conversion feature | (5,317 | ) | | (8,386 | ) | | — |
| | (3,631 | ) | | (2,067 | ) | | (19,401 | ) | Balance at December 31, 2014 | $ | — |
| | $ | — |
| | $ | — |
| | $ | 146,634 |
| | $ | 98,831 |
| | $ | 245,465 |
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| Fair Value of Notes Payable and Long-term Debt |
The estimated fair value of the Company’s notes payable and long-term debt has been determined by the Company using available market information and appropriate valuation methodologies including the evaluation of the Company’s credit risk as described in Note 1. However, considerable judgment is required to develop the estimates of fair value and, accordingly, the estimate presented herein are not necessarily indicative of the amount that could be realized in a current market exchange.
| | | | | | | | | | | | | | | | | | December 31, 2014 | | December 31, 2013 | | Carrying Value | | Fair Value | | Carrying Value | | Fair Value | Notes payable and long-term debt | $ | 913,351 |
| | $ | 1,313,711 |
| | $ | 692,343 |
| | $ | 1,006,562 |
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| Schedule of Maturities of Long-term Debt |
Scheduled maturities of long-term debt are as follows:
| | | | | | | | | | | | | | Principal | | Unamortized Discount | | Net | Year Ending December 31: | |
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| | |
| 2015 | $ | 52,640 |
| | $ | — |
| | $ | 52,640 |
| 2016 | 4,925 |
| | — |
| | 4,925 |
| 2017 | 1,527 |
| | — |
| | 1,527 |
| 2018 | 1,267 |
| | — |
| | 1,267 |
| 2019 | 230,432 |
| | 146,634 |
| | 83,798 |
| Thereafter | 858,750 |
| | 89,556 |
| | 769,194 |
| Total | $ | 1,149,541 |
| | $ | 236,190 |
| | $ | 913,351 |
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