Dunkin' Donuts 2012 Annual Report Download - page 78

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-68-
carrying amount of other intangible assets is also impacted by foreign currency fluctuations. Impairment of favorable operating
leases acquired, net of accumulated amortization, totaled $959 thousand, $624 thousand, and $2.3 million, for fiscal years
2012, 2011, and 2010, respectively, and is included in impairment charges in the consolidated statements of operations.
Total estimated amortization expense for other intangible assets for fiscal years 2013 through 2017 is as follows (in thousands):
Fiscal year:
2013 $ 26,149
2014 25,546
2015 25,219
2016 22,266
2017 21,480
(8) Debt
Debt at December 29, 2012 and December 31, 2011 consisted of the following (in thousands):
December 29,
2012
December 31,
2011
Term loans $ 1,849,958 1,468,309
Less current portion of long-term debt 26,680 14,965
Total long-term debt $ 1,823,278 1,453,344
Senior credit facility
The Company’s senior credit facility consists of $1.90 billion aggregate principal amount term loans and a $100.0 million
revolving credit facility, which were entered into by DBGI’s subsidiary, Dunkin’ Brands, Inc. (“DBI”) in November 2010. The
term loans and revolving credit facility mature in November 2017 and November 2015, respectively. As of December 29, 2012
and December 31, 2011, $1.86 billion and $1.47 billion, respectively, of principal was outstanding on the term loans. As of
December 29, 2012 and December 31, 2011, $11.5 million and $11.2 million, respectively, of letters of credit were outstanding
against the revolving credit facility. There were no amounts drawn down on these letters of credit.
Borrowings under the senior credit facility bear interest at a rate per annum equal to an applicable margin plus, at our option,
either (1) a base rate determined by reference to the highest of (a) the Federal Funds rate plus 0.5%, (b) the prime rate, (c) the
LIBOR rate plus 1.0%, and (d) 2.0% or (2) a LIBOR rate provided that LIBOR shall not be lower than 1.0%. The applicable
margin under the term loan facility is 2.0% for loans based upon the base rate and 3.0% for loans based upon the LIBOR rate.
In addition, we are required to pay a 0.5% commitment fee per annum on the unused portion of the revolver and a fee for letter
of credit amounts outstanding of 3.0%. The effective interest rate for term loans, including the amortization of original issue
discount and deferred financing costs, was 4.4% at December 29, 2012.
Repayments are required to be made under the term loans equal to $19.0 million per calendar year, payable in quarterly
installments through September 2017, with the remaining principal balance due in November 2017. Additionally, following the
end of each fiscal year, the Company is required to prepay an amount equal to 25% of excess cash flow (as defined in the senior
credit facility) for such fiscal year. If DBI’s leverage ratio, which is a measure of DBI’s outstanding debt to earnings before
interest, taxes, depreciation, and amortization, adjusted for certain items (as specified in the senior credit facility), is less than
4.75x, no excess cash flow payments are required. The excess cash flow payments may be applied to required principal
payments. Under the terms of the senior credit facility, the first excess cash flow payment was due in the first quarter of fiscal
year 2012 based on fiscal year 2011 excess cash flow and leverage ratio. In December 2011, the Company made an additional
principal payment of $11.8 million that was applied to the 2011 excess cash flow payment due in the first quarter of 2012.
Based on fiscal year 2011 excess cash flow and leverage ratio requirements, considering all payments made, the excess cash
flow payment required in the first quarter of 2012 was $2.4 million. Based on fiscal year 2012 excess cash flow and leverage
ratio requirements, considering all payments made, the excess cash flow payment required in the first quarter of 2013 is $21.7
million. The Company has reflected this excess cash flow payment, along with a $5.0 million voluntary payment made in the
first week of fiscal year 2013, within the current portion of long-term debt as of December 29, 2012 in the consolidated balance
sheets. Based on all payments made, including the required excess cash flow payment in the first quarter of 2013, no additional
principal payments would be required in 2013. Other events and transactions, such as certain asset sales and incurrence of debt,
may trigger additional mandatory prepayments.