Advance Auto Parts 2014 Annual Report Download - page 71

ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
January 3, 2015, December 28, 2013 and December 29, 2012
(in thousands, except per share data)
F-24
8. Long-term Debt:
Long-term debt consists of the following:
January 3,
2015
December 28,
2013
Revolving facility at variable interest rates (2.45% and 1.47% at January 3, 2015
and December 28, 2013, respectively) due December 5, 2018 $ 93,400 $ —
Term loan at variable interest rates (1.72% and 1.67% at January 3, 2015 and
December 28, 2013, respectively) due January 2, 2019 490,000 —
5.75% Senior Unsecured Notes (net of unamortized discount of $746 and $865 at
January 3, 2015 and December 28, 2013, respectively) due May 1, 2020 299,254 299,135
4.50% Senior Unsecured Notes (net of unamortized discount of $72 and $80 at
January 3, 2015 and December 28, 2013, respectively) due January 15, 2022 299,928 299,920
4.50% Senior Unsecured Notes (net of unamortized discount of $1,271 and
$1,387 at January 3, 2015 and December 28, 2013) due December 1, 2023 448,729 448,613
Other 5,582 5,916
1,636,893 1,053,584
Less: Current portion of long-term debt (582)(916)
Long-term debt, excluding current portion $ 1,636,311 $ 1,052,668
Bank Debt
On December 5, 2013, the Company entered into a new credit agreement (the "2013 Credit Agreement") which provides a
$700,000 unsecured term loan and a $1,000,000 unsecured revolving credit facility with Advance Stores, as Borrower, the
lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent. This revolving credit facility replaced the
revolver under the Company’s former Credit Agreement dated as of May 27, 2011 with Advance Stores, as Borrower, the
lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent (the “2011 Credit Agreement”). Upon execution
of the 2013 Credit Agreement, the lenders’ commitments under the 2011 Credit Agreement were terminated and the liabilities
of the Company and its subsidiaries with respect to their obligations under the 2011 Credit Agreement were discharged. The
new 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 to exceed $250,000 by those respective lenders (up to a total
commitment of $1,250,000) during the term of the 2013 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 2013 Credit Agreement. Under the terms of the 2013 Credit Agreement, the revolving credit facility terminates in
December 2018 and the term loan matures in January 2019.
As of January 3, 2015, under the 2013 Credit Agreement, the Company had outstanding borrowings of $93,400 under the
revolver and $490,000 under the term loan. As of January 3, 2015, the Company also had letters of credit outstanding of
$124,334, which reduced the availability under the revolver to $782,266. The letters of credit generally have a term of one year
or less and primarily serve as collateral for the Company’s self-insurance policies.
The interest rate on borrowings under the revolving credit facility is based, at the Company’s option, on adjusted LIBOR,
plus a margin, or an alternate base rate, plus a margin. The current margin is 1.30% and 0.30% per annum for the adjusted
LIBOR and alternate base rate borrowings, respectively. A facility fee is charged on the total amount of the revolving credit
facility, payable in arrears. The current facility fee rate is 0.20% per annum. Under the terms of the 2013 Credit Agreement, the
interest rate and facility fee are subject to change based on the Company’s credit rating.
The interest rate on the term loan is based, at the Company’s option, on adjusted LIBOR, plus a margin, or an alternate
base rate, plus a margin. The current margin is 1.50% and 0.50% per annum for the adjusted LIBOR and alternate base rate
borrowings, respectively. Under the terms of the term loan, the interest rate is subject to change based on the Company’s credit
rating.