Advance Auto Parts 2008 Annual Report Download - page 76

ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
January 3, 2009, December 29, 2007 and December 30, 2006
(in thousands, except per share data)
The accompanying notes to the consolidated financial statements
are an integral part of these statements.
F-22
8. Long-term Debt:
Long-term debt consists of the following:
January 3,
2009 December 29, 2007
Senior Debt:
Revolving credit facility at variable interest rates
(4.81% and 5.93% at January 3, 2009 and December 29,
2007, respectively) due October 2011 251,500$ 451,000$
Term loan at variable interest rates
(3.02% and 6.19% at January 3, 2009 and December 29,
2007, respectively) due October 2011 200,000 50,000
Other 4,664 4,672
456,164 505,672
Less: Current portion of long-term debt (1,003) (610)
Long-term debt, excluding current portio
n
455,161$ 505,062$
Term Loan
As of January 3, 2009, the Company had borrowed $200,000 under its unsecured four-year term loan. The
Company entered into the term loan on December 4, 2007, with the Company’s wholly-owned subsidiary, Advance
Stores Company, Incorporated, or Stores, serving as borrower. As of December 29, 2007, the Company had
borrowed $50,000 under the term loan. The entire $200,000 proceeds from this term loan were used to repurchase
shares of the Company's common stock under its stock repurchase program. The term loan terminates on October 5,
2011.
The interest rate on the term loan is based, at the Company’s option, on an adjusted LIBOR rate, plus a margin,
or an alternate base rate, plus a margin. The current margin is 1.0% and 0.0% per annum for the adjusted LIBOR
and alternate base rate borrowings, respectively. The Company has elected to use the 90-day adjusted LIBOR rate
and has the ability and intent to continue to use this rate on its hedged borrowings. Under the terms of the term loan,
the interest rate is based on the Company’s credit rating.
Revolving Credit Facility
In addition to the term loan, the Company has a $750,000 unsecured five-year revolving credit facility with
Stores serving as the borrower. The revolving credit facility also provides for the issuance of letters of credit with a
sub limit of $300,000, and swingline loans in an amount not to exceed $50,000. The Company may request, subject
to agreement by one or more lenders, that the total revolving commitment be increased by an amount not exceeding
$250,000 (up to a total commitment of $1,000,000) during the term of the credit agreement. Voluntary prepayments
and voluntary reductions of the revolving balance are permitted in whole or in part, at the Company’s option, in
minimum principal amounts as specified in the revolving credit facility. The revolving credit facility terminates on
October 5, 2011.
As of January 3, 2009, the Company had $251,500 outstanding under its revolving credit facility, and letters of
credit outstanding of $101,254, which reduced the availability under the revolving credit facility to $397,246. (The
letters of credit generally have a term of one year or less.) A commitment fee is charged on the unused portion of
the revolver, payable in arrears. The current commitment fee rate is 0.15% per annum.
The interest rate on borrowings under the revolving credit facility is based, at the Company’s option, on an
adjusted LIBOR rate, plus a margin, or an alternate base rate, plus a margin. The current margin is 0.75% and 0.0%
per annum for the adjusted LIBOR and alternate base rate borrowings, respectively. The Company has elected to use
the 90-day adjusted LIBOR rate and has the ability and intent to continue to use this rate on its hedged borrowings.