Advance Auto Parts 2006 Annual Report Download - page 88

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ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 30, 2006, December 31, 2005 and January 1, 2005
(in thousands, except per share data)
The interest rates on borrowings under the new revolving credit facility will be based, at the Company’s option,
on an adjusted LIBOR rate, plus a margin, or an alternate base rate, plus a margin. After an initial interest period, the
Company may elect to convert a particular borrowing to a different type. The initial margin is 0.75% and 0.0% per
annum for the adjusted LIBOR and alternate base rate borrowings, respectively. A commitment fee will be charged
on the unused portion of the revolver, payable in arrears. The initial commitment fee rate is 0.150% per annum.
Under the terms of the new revolving credit facility, the interest rate spread and commitment fee will be based on
the Company’s credit rating. The revolving credit facility terminates on October 5, 2011.
The new revolving credit facility is fully and unconditionally guaranteed by Advance Auto Parts, Inc. The
facility contains covenants restricting the ability of the Company and its subsidiaries to, among other things, (1)
create, incur or assume additional debt (including hedging arrangements), (2) incur liens or engage in sale-leaseback
transactions, (3) make loans and investments, (4) guarantee obligations, (5) engage in certain mergers, acquisitions
and asset sales, (6) engage in transactions with affiliates, (7) change the nature of the Company’s business and the
business conducted by its subsidiaries and (8) change the holding company status of the Company. The Company is
required to comply with financial covenants with respect to a maximum leverage ratio and a minimum coverage
ratio. The new revolving credit facility also provides for customary events of default, including non-payment
defaults, covenant defaults and cross-defaults to the Company’s other material indebtedness.
In fiscal 2004, the Company wrote-off existing deferred financing costs as a result of refinancing its outstanding
term loans. The write-off of these costs combined with the related refinancing costs incurred to set up the credit
facility resulted in a loss on extinguishment of debt of $2,818 in the accompanying 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 conjunction with these partial repayments, the
Company wrote-off deferred financing costs in the amount of $412, which is classified as a loss on extinguishment
of debt in the accompanying consolidated statement of operations for the year ended January 1, 2005.
The Company was in compliance with the above covenants under the revolving credit facility at December 30,
2006.
At December 30, 2006, the aggregate future annual maturities of long-term debt are as follows:
2007 67$
2008 75
2009 71
2010 73
2011 476,869
Thereafter 85
477,240$
13. Stock Repurchase Program:
During fiscal 2005, the Company’s Board of Directors authorized a program to repurchase up to $300,000 of
the Company’s common stock plus related expenses. The program, which became effective August 15, 2005,
replaced the remaining portion of a previous stock repurchase program. The program allows the Company to
repurchase its common stock on the open market or in privately negotiated transactions from time to time in
accordance with the requirements of the Securities and Exchange Commission. As of December 30, 2006, the
Company had repurchased a total of 5,209 shares of common stock under the program, at an aggregate cost of
$196,013, or an average price of $37.63 per share, excluding related expenses. At December 30, 2006, the Company
had $103,987, excluding related expenses, available for future stock repurchases under the stock repurchase
program.
During fiscal 2006, the Company retired 5,117 shares of common stock which were previously repurchased
under the Company’s current stock repurchase program.
F-25