Advance Auto Parts 2003 Annual Report Download - page 40

Voluntary prepayments of borrowings under the senior
credit facility and voluntary reductions of the unutilized por-
tion of the revolving credit facility are permitted in whole or
in part, at the Company’s option, in minimum principal
amounts specified in the senior credit facility, without pre-
mium or penalty, subject to reimbursement of the lenders’
redeployment costs in the case of a prepayment of adjusted
LIBOR borrowings other than on the last day of the relevant
interest period. Voluntary prepayments of the term facilities
will (1) generally be allocated among the facilities on a pro
rata basis (based on the then outstanding principal amount
of the loans under each term facility) and (2) within each
such term facility, be applied to the installments under the
amortization schedule within the following 12 months
under such term facility until eliminated. All remaining
amounts of prepayments will be applied pro rata to the
remaining amortization payments under such term facility.
The senior credit facility is guaranteed by the Stores and
by each of its existing domestic subsidiaries and will be
guaranteed by all future domestic subsidiaries. The senior
credit facility is secured by a first priority lien on sub-
stantially all, subject to certain exceptions, of the stores’
properties and assets and the properties and assets of its
existing domestic subsidiaries (including Discount and
its subsidiaries) and will be secured by the properties
and assets of its future domestic subsidiaries. The senior
credit facility contains covenants restricting the ability of
the Company and its 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 the Company’s business and the
business conducted by its subsidiaries and (9) change the
holding company status of Advance. The Company is
required to comply with financial covenants with respect to
a maximum leverage ratio, a minimum interest coverage
ratio, a minimum current assets to funded senior debt ratio,
a maximum senior leverage ratio and maximum limits on
capital expenditures.
As of January 3, 2004, the Company was in compliance
with the covenants of the senior credit facility. Substantially
all of the net assets of the Company’s subsidiaries are
restricted at January 3, 2004.
At January 3, 2004, the aggregate future annual maturities
of long-term debt are as follows:
2004 .......................................................................................... $ 22,220
2005 .......................................................................................... 49,210
2006 .......................................................................................... 48,413
2007 .......................................................................................... 325,157
2008 .......................................................................................... —
Thereafter.................................................................................. —
$445,000
14—Stockholder Subscription Receivables
The Company established a stock subscription plan in
fiscal 1998, which allows certain directors, officers and
key team members of the Company to purchase shares of
common stock. The plan required that the purchase price of
the stock equal the fair market value at the time of the
purchase and allowed fifty percent of the purchase price to be
executed through the delivery of a full recourse promissory
note. All of the notes were in paid in full during 2003. At
December 28, 2002, outstanding stockholder subscription
receivables were $976, and are included as a reduction to
stockholders’ equity in the accompanying balance sheet.
15—Income Taxes
Provision (benefit) for income taxes from continuing
operations for fiscal 2003, fiscal 2002 and fiscal 2001
consists of the following:
Current Deferred Total
2003
Federal...................................... $ 23,759 $44,820 $68,579
State.......................................... 923 8,922 9,845
$ 24,682 $53,742 $78,424
2002
Federal....................................... $(11,958) $44,740 $32,782
State........................................... 62 6,686 6,748
$(11,896) $51,426 $39,530
2001
Federal....................................... $ 12,510 $(2,948) $ 9,562
State........................................... 221 (2,499) (2,278)
$ 12,731 $(5,447) $ 7,284
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
January 3, 2004, December 28, 2002 and December 29, 2001
(in thousands, except per share data)
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