Dollar Tree 2011 Annual Report Download - page 24

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be fully repaid in June 2018. e bonds do not have a
prepayment penalty as long as the interest rate remains
variable. e bonds contain a demand provision and,
therefore, outstanding amounts are classified as current
liabilities. We pay interest monthly based on a variable
interest rate, which was 0.27% at January 28, 2012.
Interest on Long-term Borrowings. is amount
represents interest payments on the Credit Agreement
and the revenue bond financing using the interest rates
for each at January 28, 2012.
Commitments
Letters of Credit and Surety Bonds. We are a party
to two Letter of Credit Reimbursement and Security
Agreements, one which provides $110.0 million for
letters of credit and one which provides $75.0 million
for letters of credit. Letters of credit are generally issued
for the routine purchase of imported merchandise and
we had approximately $139.5 million of purchases
committed under these letters of credit at January 28, 2012.
We also have approximately $28.7 million of letters
of credit and $2.5 million of surety bonds outstanding
for our self-insurance programs and certain utility
payment obligations at some of our stores.
Freight Contracts. We have contracted outbound freight
services from various carriers with contracts expiring
through fiscal 2014. e total amount of these commit-
ments is approximately $222.3 million.
Technology Assets. We have commitments totaling
approximately $8.9 million to primarily purchase store
technology assets for our stores during 2012.
Telecom Contracts. We have contracted for telecom-
munication services with contracts expiring in 2014.
e total amount of these commitments is approximately
$3.3 million.
Lease Financing
Operating Lease Obligations. Our operating lease obliga-
tions are primarily for payments under noncancelable
store leases. e commitment includes amounts for leases
that were signed prior to January 28, 2012 for stores that
were not yet open on January 28, 2012.
Long-term Borrowings
Credit Agreement. In February 2008, we entered into a
five-year $550.0 million unsecured Credit Agreement (the
Agreement). e Agreement provides for a $300.0 million
revolving line of credit, including up to $150.0 million
in available letters of credit, and a $250.0 million term
loan. e interest rate on the facility will be based, at our
option, on a LIBOR rate, plus a margin, or an alternate
base rate, plus a margin. e interest rate on the facility
was 0.77% at January 28, 2012. e revolving line of
credit also bears a facilities fee, calculated as a percentage,
as defined, of the amount available under the line of
credit, payable quarterly. e term loan is due and payable
in full at the five year maturity date of the Agreement. e
Agreement also bears an administrative fee payable annu-
ally. e Agreement, among other things, requires the
maintenance of certain specified financial ratios, restricts
the payment of certain distributions and prohibits the
incurrence of certain new indebtedness. As of January 28,
2012, we had the $250.0 million term loan outstanding
under the Agreement and no amounts outstanding under
the $300.0 million revolving line of credit.
Revenue Bond Financing. In May 1998, we entered
into an agreement with the Mississippi Business Finance
Corporation under which it issued $19.0 million of vari-
able-rate demand revenue bonds. We used the proceeds
from the bonds to finance the acquisition, construction
and installation of land, buildings, machinery and
equipment for our distribution facility in Olive Branch,
Mississippi. At January 28, 2012, the balance outstanding
on the bonds was $15.5 million. ese bonds are due to
22 Dollar Tree, Inc.