Advance Auto Parts 2009 Annual Report Download - page 48

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35
Fiscal Fiscal Fiscal Fiscal Fiscal
Contractual Obligations Total 2010 2011 2012 2013 2014 Thereafter
Long-term debt
(1)
204,271$ 1,344$ 200,972$ 742$ 689$ 524$ -$
Interest payments 26,203$ 14,813$ 11,310$ 44$ 24$ 12$ -$
Operating leases
(2)
2,072,671$ 287,320$ 250,396$ 227,551$ 202,104$ 171,743$ 933,557$
Other long-term liabilities
(3)
121,644$ -$ -$ -$ -$ -$ -$
(in thousands)
(1) Long-term debt represents primarily the principal amounts due under our term loan and revolving credit
facility, which become due in October 2011.
(2) We lease certain store locations, distribution centers, office space, equipment and vehicles. Our property
leases generally contain renewal and escalation clauses and other concessions. These provisions are
considered in our calculation of our minimum lease payments which are recognized as expense on a
straight-line basis over the applicable lease term. In accordance with SFAS No. 13, “Accounting for
Leases,” as amended by SFAS No. 29, “Determining Contingent Rental” (collectively now under ASC
Topic 840), any lease payments that are based upon an existing index or rate, are included in our minimum
lease payment calculations.
(3) Primarily includes employee benefits accruals, closed store liabilities, unrecognized income tax benefits
and deferred income taxes for which no contractual payment schedule exists and we expect the payments to
occur beyond 12 months from January 2, 2010. During the next 12 months, it is possible that we could
conclude on approximately $1 to $2 million of the contingencies associated with these tax uncertainties, a
portion of which may be settled in cash and is reflected in a current liability. We do not anticipate any
significant impact on our liquidity and capital resources due to the conclusion of these tax matters.
Long Term Debt
Bank Debt
We have a $750 million unsecured five-year revolving credit facility with our wholly-owned subsidiary,
Advance Stores Company, Incorporated, or Stores, serving as the borrower. The revolving credit facility also
provides for the issuance of letters of credit with a sub limit of $300 million, and swingline loans in an amount not to
exceed $50 million. We may request, subject to agreement by one or more lenders, that the total revolving
commitment be increased by an amount not exceeding $250 million (up to a total commitment of $1 billion) during
the term of the credit agreement. Voluntary prepayments and voluntary reductions of the revolving balance are
permitted in whole or in part, at our option, in minimum principal amounts as specified in the revolving credit
facility. The revolving credit facility matures on October 5, 2011.
As of January 2, 2010, we had no amount outstanding under our revolving credit facility, and letters of credit
outstanding of $99.8 million, which reduced the availability under the revolving credit facility to $650.2 million.
(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 0.150% per annum.
In addition to the revolving credit facility, we had borrowed $200 million under our unsecured four-year term
loan as of January 2, 2010. We entered into the term loan with Stores serving as borrower. The proceeds from the
term loan were used to repurchase shares of our common stock under our stock repurchase program during Fiscal
2008. The term loan matures on October 5, 2011.
The interest rate on borrowings under the revolving credit facility is based, at our 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. Under the terms of the revolving credit facility, the
interest rate and commitment fee are based on our credit rating. The interest rate on the term loan is based, at our
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. Under the terms
of the term loan, the interest rate is based on our credit rating. We have elected to use the 90-day adjusted LIBOR
rate and have the ability and intent to continue to use this rate on our hedged borrowings. At January 2, 2010, the