Dollar Tree 2012 Annual Report Download - page 44
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Please find page 44 of the 2012 Dollar Tree annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Notes to Consolidated Financial Statements
NOTE 5—LONG-TERM DEBT
Long-termdebtatFebruary2,2013andJanuary28,2012consistsofthefollowing:
(in millions) February 2, 2013 January28,2012
$750.0millionUnsecuredCreditAgreement,interest
payablemonthlyatLIBOR,plus0.90%,whichwas
1.11%atFebruary2,2013,principalpayableupon
expirationofthefacilityinFebruary2017 $ 250.0 $ 250.0
Demand Revenue Bonds, interest payable monthly at a
variableratewhichwas0.23%atFebruary2,2013,
principalpayableondemand,maturingJune2018 14.3 15.5
$7.0millionforgivablepromissorynote,interest
payablebeginninginNovember2017atarateof
1%,principalpayablebeginningNovember2017 7.0 —
Total long-term debt $ 271.3 $ 265.5
Less current portion 14.3 15.5
Long-term debt, excluding current portion $ 257.0 $ 250.0
Maturitiesoflong-termdebtareasfollows:2013–$14.3million,2017–$0.2millionandafter2017–$256.8million
Unsecured Credit Agreement
In2012,theCompanyenteredintotheAgreement
whichprovidesfora$750.0millionrevolvinglineof
credit,includingupto$150.0millioninavailableletters
of credit. e interest rate on the facility is based, at
theCompany’soption,onaLIBORrate,plusamargin,
or an alternate base rate, plus a margin. e revolving
line of credit also bears a facilities fee, calculated as a
percentage,asdened,oftheamountavailableunder
the line of credit, payable quarterly. e Agreement,
among other things, requires the maintenance of certain
speciednancialratios,restrictsthepaymentofcertain
distributions and prohibits the incurrence of certain new
indebtedness.eCompany’sFebruary2008,$500.0
million Credit Agreement was terminated concurrent
withenteringintothisAgreement.AsofFebruary2,
2013,theCompanyhad$250.0millionoutstanding
underthe$750.0millionrevolvinglineofcredit.
Demand Revenue Bonds
In1998,theCompanyenteredintoanunsecuredLoan
AgreementwiththeMississippiBusinessFinance
Corporation(MBFC)underwhichtheMBFCissued
TaxableVariableRateDemandRevenueBonds(the
Bonds)inanaggregateprincipalamountof$19.0
milliontonancetheacquisition,construction,and
installation of land, buildings, machinery and equipment
fortheCompany’sdistributionfacilityinOliveBranch,
Mississippi.eBondsdonotcontainaprepayment
penalty as long as the interest rate remains variable.
e Bonds contain a demand provision and, therefore,
areclassiedascurrentliabilities.
Forgivable Promissory Note
In2012,theCompanyenteredintoapromissorynote
with the state of Connecticut under which the state
loanedtheCompany$7.0millioninconnectionwith
theCompany’sacquisition,constructionandinstallation
of land, building, machinery and equipment for the
Company’sdistributionfacilityinWindsor,Connecticut.
If certain performance targets are met, the loan and any
accruedinterestwillbeforgiveninscal2017.Ifthe
performance targets are not met, the loan and accrued
interestmustberepaidbeginninginscal2017.
NOTE 6—DERIVATIVE FINANCIAL INSTRUMENTS
Hedging Derivatives
In order to manage fluctuations in cash flows resulting
from changes in diesel fuel costs, the Company entered
into fuel derivative contracts with third parties. e
Companyhedged4.8million,3.5millionand5.0million
gallonsofdieselfuelin2012,2011and2010,respectively.
esehedgesrepresentedapproximately35%,31%and
39%ofthetotaldomestictruckloadfuelneedsin2012,
2011and2010,respectively.eCompanycurrently
hasfuelderivativecontractstohedge0.7milliongallons
ofdieselfuel,orapproximately20%oftheCompany’s
domestictruckloadfuelneedsfromFebruary2013
throughApril2013.Underthesecontracts,theCompany
paysthethirdpartyaxedpricefordieselfuelandreceives
variable diesel fuel prices at amounts approximating
current diesel fuel costs, thereby creating the economic
equivalentofaxed-rateobligation.esederivative
contracts do not qualify for hedge accounting and therefore
a
ll changes in fair value for these derivatives are included
42 Dollar Tree, Inc.