Aarons 2011 Annual Report Download - page 33

NOTE B: EARNINGS
PER SHARE
Earnings per share is computed by dividing net earnings by the
weighted average number of shares of Common Stock outstanding
during the period. The computation of earnings per share assuming
dilution includes the dilutive effect of stock options, restricted stock
units (“RSUs”) and restricted stock awards (“RSAs”). Stock options
had the effect of increasing the weighted average shares outstanding
assuming dilution by approximately 998,000 in 2011, 745,000 in
2010, and 663,000 in 2009. RSUs had the effect of increasing the
weighted average shares outstanding assuming dilution by approxi-
mately 236,000, and 25,000 for the years ending 2011, and 2010,
respectively. There were no RSUs that had the effect of increasing
the weighted average shares outstanding assuming dilution for the
year ended December 31, 2009. RSAs had the effect of increasing
the weighted average shares outstanding assuming dilution by 3,000
in 2011, 138,000 in 2010 and 150,000 in 2009.
There were no anti-dilutive stock options excluded from the
computation of earnings per share assuming dilution for the twelve
months ended December 31, 2011. Anti-dilutive stock options
excluded from the computation of earnings per share assuming
dilution were 314,000 and 470,000 for the twelve months ended
December 31, 2010 and 2009, respectively. Anti-dilutive RSUs
and RSAs excluded from the computation of earnings per share
assuming dilution were 298,000, 275,000 and 45,000 in 2011,
2010 and 2009, respectively.
NOTE C: PROPERTY,
PLANT AND EQUIPMENT
Following is a summary of the Company’s property, plant, and
equipment at December 31:
(In Thousands) 2011 2010
Land $ 25,882 $ 25,067
Buildings and Improvements 81,566 74,216
Leasehold Improvements and Signs 116,632 100,031
Fixtures and Equipment 133,615 109,458
Assets Under Capital Leases:
with Related Parties 7,641 8,501
with Unrelated Parties 10,564 10,564
Construction in Progress 5,444 9,485
381,344 337,322
Less: Accumulated Depreciation
and Amortization (154,725) (132,410)
$226,619 $204,912
Amortization expense on assets recorded under capital leases is
included in operating expenses and was $1.2 million, $1.9 million
and $1.2 million in 2011, 2010 and 2009, respectively. Capital
leases consist of buildings and improvements. Assets under capital
leases with related parties included $4.2 million and $4.0 million
in accumulated depreciation and amortization as of December
31, 2011 and 2010, respectively. Assets under capital leases with
unrelated parties included $3.8 million and $3.2 million in accu-
mulated depreciation and amortization as of December 31, 2011
and 2010, respectively.
NOTE D: CREDIT
FACILITIES
Following is a summary of the Company’s credit facilities at
December 31:
(In Thousands) 2011 2010
Senior Unsecured Notes $137,000 $24,000
Capital Lease Obligation:
with Related Parties 6,730 7,279
with Unrelated Parties 6,809 7,208
Other Debt 3,250 3,303
$153,789 $41,790
Bank Debt — On May 18, 2011, the Company entered into the
second amendment to its revolving credit agreement, dated May
23, 2008, as amended, and on July 1, 2011, the Company entered
into a third amendment. The amendments to the revolving credit
agreement (i) add the defined terms “Institutional Investor” and
“Private Placement Debt” to further clarify the circumstances under
which the Company may incur indebtedness and still remain in
compliance with applicable negative covenants and (ii) modified
the negative covenant restricting debt applicable to the Company
by, among other things, increasing the amount of indebtedness the
Company may incur with respect to certain privately placed debt
from an aggregate principal amount of up to $60.0 million to an
aggregate principal amount of up to $150.0 million. The Company
entered into the amendments in order to permit the issuance of the
3.75% unsecured senior notes issued to a consortium of insurance
companies as described below.
The Company has a revolving credit agreement with several
banks providing for unsecured borrowings up to $140.0 million.
Amounts borrowed bear interest at the lower of the lender’s prime
rate or LIBOR plus 87.5 basis points. The pricing under a work-
ing capital line is based upon overnight bank borrowing rates. At
December 31, 2011 and 2010, there was a zero balance under the
Company’s revolving credit agreement. The Company pays a .20%
commitment fee on unused balances. The weighted average inter-
est rate on borrowings under the revolving credit agreement was
0.97% in 2011, 0.97% in 2010 and 1.23% in 2009. The revolving
credit agreement expires May 23, 2013.
The revolving credit agreement contains financial covenants
which, among other things, prohibit the Company from exceeding
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