Family Dollar 2013 Annual Report Download - page 58

Depreciation expense was $238.9 million, $204.5 million and $179.5 million for fiscal 2013, fiscal 2012 and
fiscal 2011, respectively. The increase in gross property and equipment, before depreciation, is not
commensurate with capital expenditures due to the significant amount of assets sold during the year under sale-
leaseback transactions. Refer to Note 7 for additional information on sale-leaseback transactions.
6. Current and Long-Term Debt:
Current and long-term debt consisted of the following at the end of fiscal 2013 and fiscal 2012:
(in thousands) August 31, 2013 August 25, 2012
5.24% Notes due September 27, 2015 ................. $ 48,600 $ 64,800
5.41% Notes due September 27, 2015 ................. 169,000 169,000
5.00% Notes due February 1, 2021 ................... 298,875 298,720
516,475 532,520
Less: current portion .............................. 16,200 16,200
Long-term portion ................................ $500,275 $516,320
On January 28, 2011, the Company issued $300 million of 5.00% unsecured senior notes due February 1, 2021
(the “2021 Notes”), through a public offering. The Company’s proceeds were approximately $298.5 million, net
of an issuance discount of $1.5 million. In addition, the Company incurred issuance costs of approximately
$3.3 million. Both the discount and issuance costs are being amortized to interest expense over the term of the
2021 Notes. Interest on the 2021 Notes is payable semi-annually in arrears on the 1st day of February and August
of each year, commencing on August 1, 2011. The 2021 Notes rank pari passu in right of payment with the
Company’s other unsecured senior indebtedness and will be senior in right of payment to any subordinated
indebtedness. The Company may redeem the 2021 Notes in whole at any time or in part from time to time, at the
option of the Company, subject to a make-whole premium. In addition, upon the occurrence of certain change of
control triggering events, the Company may be required to repurchase the 2021 Notes, at a price equal to 101%
of their principal amount, plus accrued and unpaid interest to the date of repurchase.
On September 27, 2005, the Company obtained $250 million through a private placement of unsecured senior
notes due September 27, 2015 (the “2015 Notes”), to a group of institutional accredited investors. The 2015
Notes were issued in two tranches at par and rank pari passu in right of payment with the Company’s other
unsecured senior indebtedness. The first tranche has an aggregate principal amount of $169 million, is payable in
a single installment on September 27, 2015, and bears interest at a rate of 5.41% per annum from the date of
issuance. The second tranche has an aggregate principal amount of $81 million, matures on September 27, 2015,
with amortization commencing on September 27, 2011, and bears interest at a rate of 5.24% per annum from the
date of issuance. The second tranche has a required principal payment of $16.2 million on September 27, 2011,
and on each September 27 thereafter to and including September 27, 2015. Interest on the 2015 Notes is payable
semi-annually in arrears on the 27th day of March and September of each year. The 2015 Notes contain certain
restrictive financial covenants, which include a consolidated debt to consolidated total capitalization ratio, a fixed
charge coverage ratio, and a priority debt to consolidated net worth ratio. As of August 31, 2013, the Company
was in compliance with all such covenants.
On November 17, 2010, the Company amended the 2015 Notes to remove the subsidiary co-borrower and all
subsidiary guarantors.
Credit Facilities
On November 17, 2010, the Company entered into a new four-year unsecured revolving credit facility with a
syndicate of lenders for borrowings of up to $400 million. The credit facility matures on November 17, 2014, and
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