Baskin Robbins 2015 Annual Report Download - page 83

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-73-
The changes in the gross carrying amount of other intangible assets and weighted average amortization period from
December 27, 2014 to December 26, 2015 are primarily due to the impairment of favorable operating leases acquired resulting
from lease terminations and the impact of foreign currency fluctuations. Impairment of favorable operating leases acquired, net
of accumulated amortization, totaled $491 thousand, $323 thousand, and $444 thousand, for fiscal years 2015, 2014, and 2013,
respectively, and is included within long-lived asset impairment charges in the consolidated statements of operations.
Total estimated amortization expense for other intangible assets for fiscal years 2016 through 2020 is as follows (in thousands):
Fiscal year:
2016 $ 22,112
2017 21,414
2018 21,276
2019 20,869
2020 20,394
(8) Debt
Debt at December 26, 2015 and December 27, 2014 consisted of the following (in thousands):
December 26,
2015
December 27,
2014
Class A-2 Notes $ 2,481,250 —
Term loans — 1,809,554
VIE debt — 1,379
Debt issuance costs, net of amortization (35,650)(11,458)
Total debt 2,445,600 1,799,475
Less current portion of long-term debt 25,000 3,852
Total long-term debt $ 2,420,600 1,795,623
Securitized Financing Facility
On January 26, 2015, DB Master Finance LLC (the “Master Issuer”), a limited-purpose, bankruptcy-remote, wholly-owned
indirect subsidiary of DBGI, entered into a base indenture and a related supplemental indenture (collectively, the “Indenture”)
under which the Master Issuer may issue multiple series of notes. On the same date, the Master Issuer issued Series 2015-1
3.262% Fixed Rate Senior Secured Notes, Class A-2-I (the “Class A-2-I Notes”) with an initial principal amount of $750.0
million and Series 2015-1 3.980% Fixed Rate Senior Secured Notes, Class A-2-II (the “Class A-2-II Notes” and, together with
the Class A-2-I Notes, the “Class A-2 Notes”) with an initial principal amount of $1.75 billion. In addition, the Master Issuer
also issued Series 2015-1 Variable Funding Senior Secured Notes, Class A-1 (the “Variable Funding Notes” and, together with
the Class A-2 Notes, the “Notes”), which allows the Master Issuer to borrow up to $100.0 million on a revolving basis. The
Variable Funding Notes may also be used to issue letters of credit. The Notes were issued in a securitization transaction
pursuant to which most of the Company’s domestic and certain of its foreign revenue-generating assets, consisting principally
of franchise-related agreements, real estate assets, and intellectual property and license agreements for the use of intellectual
property, are held by the Master Issuer and certain other limited-purpose, bankruptcy-remote, wholly-owned indirect
subsidiaries of the Company that act as guarantors of the Notes and that have pledged substantially all of their assets to secure
the Notes.
The legal final maturity date of the Class A-2 Notes is in February 2045, but it is anticipated that, unless earlier prepaid to the
extent permitted under the Indenture, the Class A-2-I Notes will be repaid in February 2019 and the Class A-2-II Notes will be
repaid in February 2022 (the “Anticipated Repayment Dates”). If the Class A-2 Notes have not been repaid in full by their
respective Anticipated Repayment Dates, a rapid amortization event will occur in which residual net cash flows of the Master
Issuer, after making certain required payments, will be applied to the outstanding principal of the Class A-2 Notes. Various
other events, including failure to maintain a minimum ratio of net cash flows to debt service (“DSCR”), may also cause a rapid
amortization event. Borrowings under the Class A-2-I and Class A-2-II Notes bear interest at a fixed rate equal to 3.262% and
3.980%, respectively. If the Class A-2 Notes are not repaid or refinanced prior to their respective Anticipated Repayment Dates,
incremental interest will accrue. Principal payments are required to be made on the Class A-2-I and Class A-2-II Notes equal to
$7.5 million and $17.5 million, respectively, per calendar year, payable in quarterly installments. No principal payments will be
required if a specified leverage ratio, which is a measure of outstanding debt to earnings before interest, taxes, depreciation, and
amortization, adjusted for certain items (as specified in the Indenture), is less than or equal to 5.0 to 1.0. Other events and