Advance Auto Parts 2009 Annual Report Download - page 80

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ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
January 2, 2010, January 3, 2009 and December 29, 2007
(in thousands, except per share data)
.
F-27
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.
Other
As of January 2, 2010, the Company had $4,271 outstanding under an economic development note and other
financing arrangements.
Guarantees and Covenants
The term loan and revolving credit facility are fully and unconditionally guaranteed by Advance. The
Company’s debt agreements collectively contain covenants restricting its ability to, among other things: (1) create,
incur or assume additional debt (including hedging arrangements), (2) incur liens or engage in sale-leaseback
transactions, (3) make loans and investments, (4) guarantee obligations, (5) engage in certain mergers, acquisitions
and asset sales, (6) change the nature of the Company’s business and the business conducted by its subsidiaries and
(7) change Advance’s status as a holding company. The Company is also required to comply with financial
covenants with respect to a maximum leverage ratio and a minimum consolidated coverage ratio. The Company was
in compliance with these covenants at January 2, 2010 and January 3, 2009. The Company’s term loan and
revolving credit facility also provide for customary events of default, covenant defaults and cross-defaults to its
other material indebtedness.
At January 2, 2010, the aggregate future annual maturities of long-term debt instruments are as follows:
Fiscal
Year Amount
2010 1,344$
2011 200,972
2012 742
2013 689
2014 524
Thereafter -
204,271$
11. Property and Equipment:
Property and equipment consists of the following: