Advance Auto Parts 2003 Annual Report Download - page 21

Our future contractual obligations related to long-term debt and operating leases at January 3, 2004 were as follows:
Fiscal Fiscal Fiscal Fiscal Fiscal
Contractual Obligations at January 3, 2004(1) Total 2004 2005 2006 2007 2008 Thereafter
(in thousands)
Long-term debt.................................................................... $ 445,000 $ 22,220 $ 49,210 $ 48,413 $325,157 $ — $ —
Operating leases .................................................................. $1,018,270 $163,822 $142,520 $125,411 $108,963 $90,667 $386,887
Other long-term liabilities(2) ................................................ $ 75,102 $ — $ — $ — $ — $ — $ —
(1) We currently do not have minimum purchase commitments under our vendor supply agreements.
(2) Primarily includes employee benefits accruals, restructuring and closed store liabilities and deferred income taxes for which no contractual payment schedule exists.
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Advance Auto Parts, Inc. and Subsidiaries
Long-Term Debt
Senior Credit Facility
In March 2003, we added incremental facilities under our
senior credit facility in the form of a tranche A-1 term loan
facility of $75 million and tranche C-1 term loan facility of
$275 million to fund the redemption of our outstanding
senior subordinated notes and senior discount debentures in
April 2003. Additionally in December 2003, we refinanced
the remaining portion of our tranche A, A-1, C and C-1
term loan facilities by amending and restating the credit
facility to add a new $100 million tranche D term loan facil-
ity and $340 million tranche E term loan facility. In fiscal
2003, we repaid $291.0 million of total debt.
At January 3, 2004, our senior credit facility consisted of
(1) a tranche D term loan facility with a balance of approx-
imately $100.0 million and a tranche E term loan facility
with a balance of approximately $340.0 million, and (2) a
$160 million revolving credit facility (including a letter of
credit sub facility) (of which $122.4 million was available).
The credit facility is jointly and severally guaranteed by all
of our domestic subsidiaries (including Discount and its
subsidiaries) and is secured by all of our assets and the
assets of our existing and future domestic subsidiaries
(including Discount and its subsidiaries).
The tranche D term loan facility currently provides for
amortization of $19.3 million on November 30, 2004,
$21.6 million in May and November 2005 and in May 2006
and $15.8 million at maturity on November 30, 2006. The
tranche E term loan facility currently provides for amortiza-
tion of $2.9 million in November 30, 2004 and semi-annually
thereafter, with a final payment of $325.2 million due at
maturity on November 30, 2007.
The interest rates on the tranche D and E term loan facil-
ities are based, at our option, on an adjusted LIBOR rate,
plus a margin, or an alternate base rate, plus a margin. Until
our delivery of our financial statements for the fiscal year
ending on January 3, 2004, the initial margins for the
tranche D and E term loan facilities are 2.00% and 1.00%
per annum for the adjusted LIBOR rate and alternate base
rate borrowings, respectively. The margins after such date
will be determined by a pricing grid based on our leverage
ratio at that time. At January 3, 2004, interest rates on our
tranche D and E term loan facilities were 3.13% and 3.18%,
respectively.
The interest rates on the revolving credit facility are
based, at our option, on either an adjusted LIBOR rate,
plus a margin, or an alternate base rate, plus a margin.
Until our delivery of our financial statements for the fiscal
year ending on January 3, 2004, the initial margins for
the revolving credit facility is 2.25% and 1.25% per annum
for the adjusted LIBOR rate and alternate base rate bor-
rowings, respectively. Additionally, a commitment fee of
0.375% per annum will be charged on the unused portion
of the revolving credit facility, payable quarterly in arrears.
At January 3, 2004, interest rates on our revolving credit
facility were 3.38%.
The senior credit facility is secured by a first priority lien
on substantially all, subject to certain exceptions, of our
assets and the assets of our existing domestic subsidiaries
(including Discount and its subsidiaries) and will be
secured by the properties and assets of our future domestic
subsidiaries.
The senior credit facility contains covenants restricting
the ability of us and our subsidiaries to, among other things,
(1) declare dividends or redeem or repurchase capital stock,
(2) prepay, redeem or purchase debt, (3) incur liens or
engage in sale-leaseback transactions, (4) make loans and
investments, (5) incur additional debt (including hedging
arrangements), (6) engage in certain mergers, acquisitions
and asset sales, (7) engage in transactions with affiliates,
(8) change the nature of our business and the business
conducted by our subsidiaries and (9) change our passive
holding company status. We are also required to comply with
financial covenants with respect to (a) a maximum leverage
ratio, (b) a minimum interest coverage ratio, (c) a minimum
current assets to funded senior debt ratio, (d) a maximum
senior leverage ratio and (e) limits on capital expenditures.
We were in compliance with the above covenants of the
senior credit facility at January 3, 2004.