Circuit City 2003 Annual Report Download - page 53

2003 2002
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Land and buildings............................................... $ 46,898 $ 43,268
Furniture and fixtures, office, computer and other equipment..... 78,327 71,453
Leasehold improvements .......................................... 14,010 12,660
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139,235 127,381
Less accumulated depreciation and amortization................... 70,588 56,248
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Property, plant and equipment, net............................... $ 68,647 $ 71,133
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Property, plant and equipment, net consists of the following (in thousands):
4.
RELATED PARTY TRANSACTIONS
The Company leased one warehouse and office facility from affiliates during the year ended December 31, 2003
(see Note 10) and vacated a second warehouse and office facility leased from affiliates during 2002. Rent expense
under those leases aggregated approximately $612,000 (2003), $1,071,000 (2002) and $1,224,000 (2001).
5.
CREDIT FACILITIES
The Company maintains a $70,000,000 revolving credit agreement with a group of financial institutions which
provides for borrowings in the United States. The borrowings are secured by all of the domestic accounts
receivable and inventories of the Company and the Company's shares of stock in its domestic subsidiaries. The
credit facility expires and outstanding borrowings thereunder are due on June 15, 2004. The borrowings under the
agreement are subject to borrowing base limitations of up to 75% of eligible accounts receivable and up to 25% of
qualified inventories. The interest on outstanding advances is payable monthly, at the Company's option, at the
agent bank's base rate (4.25% at December 31, 2003) plus 0.25% to 0.75% or the bank's daily LIBOR rate (2.87%
at December 31, 2003) plus 2.25% to 3%. The facility also calls for a commitment fee payable quarterly in arrears
of 0.5% of the average daily unused portion of the facility. The revolving credit agreement contains certain
financial and other covenants, including restrictions on capital expenditures and payments of dividends. The
Company was in compliance with all of the covenants as of December 31, 2003. As of December 31, 2003,
availability under the agreement was $49.0 million. There were outstanding letters of credit of $8.0 million as of
December 31, 2003 and $6.1 million as of December 31, 2002 and there were no outstanding advances as of
December 31, 2003 and December 31, 2002.
The Company also has a £15,000,000 ($26,852,000 at the December 31, 2003 exchange rate) multi-
currency credit
facility with a United Kingdom financial institution, which is available to its United Kingdom subsidiaries.
Drawings under the facility may be made by overdraft, trade acceptance or loan. The facility does not have a
termination date, but may be canceled with six months notice beginning in December 2003. Borrowings under the
facility are secured by certain assets of the Company's United Kingdom subsidiaries and a portion of the line is
subject to a borrowing base limitation of 70% of eligible accounts receivable. At December 31, 2003 there were
£7.5 million ($13.3 million) of borrowings outstanding under this line with interest payable at a rate of 5.85%. At
December 31, 2002 there were £12.4 million ($20.0 million at the December 31, 2002 exchange rate) of
borrowings outstanding under this line with interest payable at a rate of 6.08%.
In October 2003, the Company's Netherlands subsidiary entered into a €
5 million ($6,307,000 at the December 31,
2003 exchange rate) credit facility. Borrowings under the facility are secured by the subsidiary's accounts
receivable and are subject to a borrowing base limitation of 85% of the eligible accounts. At December 31, 2003
there were €4.5 million ($5.7 million) of borrowings outstanding under this line with interest payable at a rate of
5.0%. The facility expires in November 2005.
The weighted average interest rate on short
-
term borrowings was 5.2% in 2003, 6.3% in 2002 and 6.6% in 2001.
6.
LONG
-
TERM DEBT
Long
-
term debt consists of (in thousands):