Advance Auto Parts 2004 Annual Report Download - page 44

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Notes฀to฀Consolidated฀Financial฀Statements฀(continued)
For฀the฀Years฀Ended฀January฀1,฀2005,฀January฀3,฀2004,฀and฀December฀28,฀2002฀(in฀thousands,฀except฀per฀share฀data)
12.฀Long-term฀Debt
฀ Long-term฀debt฀consists฀of฀the฀following:
January฀1,฀
2005
January฀3,฀
2004
Senior฀Debt:
฀ ฀Tranche฀A,฀Senior฀Secured฀Term฀Loan฀at฀variable฀interest฀rates฀(3.92%฀at฀January฀1,฀2005)฀due฀฀
฀ September฀2009฀................................................................................................................................................................ $200,000 $฀฀฀฀฀—
฀ ฀Tranche฀B,฀Senior฀Secured฀Term฀Loan฀at฀variable฀interest฀rates฀(4.17%฀at฀January฀1,฀2005)฀due฀฀
฀ September฀2010฀................................................................................................................................................................ 170,000 —
฀ ฀Delayed฀Draw,฀Senior฀Secured฀Term฀Loan฀at฀variable฀interest฀rates฀(4.22%฀at฀January฀1,฀2005)฀฀
฀ due฀September฀2010฀......................................................................................................................................................... 100,000 —
฀ ฀Tranche฀D,฀Senior฀Secured฀Term฀Loan฀at฀variable฀interest฀rates฀(3.13%฀at฀January฀3,฀2004),฀฀
฀ repaid฀on฀November฀3,฀2004฀............................................................................................................................................ —100,000
฀ ฀Tranche฀E,฀Senior฀Secured฀Term฀Loan฀at฀variable฀interest฀rates฀(3.18%฀at฀January฀3,฀2004),฀฀
฀ repaid฀on฀November฀3,฀2004฀............................................................................................................................................ —340,000
฀ ฀Revolving฀facility฀at฀variable฀interest฀rates฀(3.92%฀at฀January฀1,฀2005฀and฀3.38%฀at฀January฀3,฀2004,฀฀
฀ respectively)฀due฀September฀2009฀................................................................................................................................... —5,000
470,000 445,000
Less:฀Current฀portion฀of฀long-term฀debt฀.................................................................................................................................. (31,700) (22,220)
Long-term฀debt,฀excluding฀current฀portion฀............................................................................................................................. $438,300 $422,780
฀ On฀November฀3,฀2004,฀the฀Company฀entered฀into฀a฀new฀
amended฀and฀restated฀$670,000฀senior฀credit฀facility.฀This฀
new฀senior฀credit฀facility฀provides฀for฀a฀$200,000฀tranche฀
A฀term฀loan฀and฀a฀$170,000฀tranche฀B฀term฀loan.฀Proceeds฀
from฀these฀term฀loans฀were฀used฀to฀refinance฀the฀Company’s฀
previously฀existing฀tranche฀D฀and฀E฀term฀loans฀and฀revolver฀
under฀ the฀ Company’s฀ previous฀ senior฀ credit฀ facility.฀
Additionally,฀the฀new฀senior฀credit฀facility฀will฀provide฀for฀
a฀ $100,000฀ delayed฀ draw฀ term฀ loan,฀ which฀ is฀ available฀
exclusively฀for฀stock฀buybacks฀under฀the฀Company’s฀stock฀
repurchase฀program,฀and฀a฀$200,000฀revolving฀facility,฀or฀
the฀ revolver฀(which฀provides฀for฀the฀ issuance฀of฀letters฀of฀
credit฀with฀a฀sub฀limit฀of฀$70,000).
฀ In฀conjunction฀with฀this฀refinancing,฀the฀Company฀wrote฀
off฀ existing฀ deferred฀ financing฀ costs฀ related฀ to฀ the฀
Company’s฀tranche฀D฀and฀E฀term฀loans฀in฀accordance฀with฀
EITF฀ Issue฀ No.฀ 96-19,฀ “Debtor’s฀ Accounting฀ for฀ a฀
Modification฀or฀Exchange฀of฀Debt฀Instruments.”฀The฀write-
off฀ of฀ these฀ costs฀ combined฀ with฀ the฀ related฀ refinancing฀
costs฀incurred฀to฀set฀up฀the฀new฀credit฀facility฀resulted฀in฀a฀
loss฀on฀extinguishment฀of฀debt฀of฀$2,818฀in฀the฀accompa-
nying฀ consolidated฀ statements฀ of฀ operations฀ for฀ the฀ year฀
ended฀ January฀ 1,฀ 2005.฀ During฀ fiscal฀ 2004,฀ prior฀ to฀ the฀
refinancing฀ of฀ its฀ credit฀ facility,฀ the฀ Company฀ repaid฀
$105,000฀ in฀ debt฀ prior฀ to฀ its฀ scheduled฀ maturity.฀ In฀ con-
junction฀ with฀ these฀ partial฀ repayments,฀ the฀ Company฀฀
wrote฀off฀deferred฀financing฀costs฀in฀the฀amount฀of฀$412,฀
which฀is฀classified฀ as฀a฀loss฀on฀extinguishment฀of฀debt฀in฀
the฀ accompanying฀ consolidated฀ statements฀ of฀ operations฀
for฀the฀year฀ended฀January฀1,฀2005.
฀ At฀ January฀ 1,฀ 2005,฀ the฀ senior฀ credit฀ facility฀ provided฀
for฀ (1)฀ $470,000฀ in฀ term฀ loans฀ (as฀ detailed฀ above)฀ and฀฀
(2)฀$200,000฀under฀a฀revolving฀credit฀facility฀(which฀pro-
vides฀for฀the฀issuance฀of฀letters฀of฀credit฀with฀a฀sub฀limit฀of฀
$70,000).฀As฀of฀January฀1,฀2005,฀the฀Company฀had฀$38,822฀
in฀letters฀of฀credit฀outstanding,฀which฀reduced฀availability฀
under฀the฀credit฀facility฀to฀$161,178.
฀ The฀ tranche฀ A฀ term฀ loan฀ currently฀ requires฀ scheduled฀
repayments฀ of฀ $7,500฀ on฀ March฀ 31,฀ 2005฀ and฀ quarterly฀
thereafter฀through฀December฀31,฀2006,฀$10,000฀on฀March฀
31,฀ 2007฀ and฀ quarterly฀ thereafter฀ through฀ December฀ 31,฀
2007,฀$12,500฀on฀March฀31,฀2008฀and฀quarterly฀thereafter฀
through฀ June฀ 30,฀ 2009฀ and฀ $25,000฀ due฀ at฀ maturity฀ on฀
September฀ 30,฀ 2009.฀ The฀ tranche฀ B฀ term฀ loan฀ currently฀
requires฀scheduled฀repayments฀of฀$425฀on฀March฀31,฀2005฀
and฀quarterly฀thereafter,฀with฀a฀final฀payment฀of฀$160,650฀
due฀at฀maturity฀on฀September฀30,฀2010.฀The฀delayed฀draw฀
term฀ loan฀ currently฀ requires฀ scheduled฀ repayments฀ of฀
0.25%฀ of฀ the฀ aggregate฀ principal฀ amount฀ outstanding฀ on฀
March฀31,฀2006฀and฀quarterly฀thereafter,฀with฀a฀final฀pay-
ment฀due฀at฀maturity฀on฀September฀30,฀2010.฀The฀revolver฀
expires฀on฀September฀30,฀2009.