Pep Boys 2007 Annual Report Download - page 95

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THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended February 2, 2008, February 3, 2007 and January 28, 2006
(dollar amounts in thousands, except share data)
In December 2007, the FASB issued SFAS No. 160, ‘‘Noncontrolling Interests in Consolidated
Financial Statements—an amendment of ARB No. 51.’’ SFAS No. 160, among other things, provides
guidance and establishes amended accounting and reporting standards for a parent company’s
noncontrolling interest in a subsidiary. SFAS No. 160 is effective for fiscal years beginning on or after
December 15, 2008. The Company does not expect the adoption of SFAS No. 160 to have a material
impact on its financial condition, results of operations or cash flows.
In March 2008, the FASB issued SFAS No. 161, ‘‘Disclosures about Derivative Instruments and
Hedging Activities.’’ SFAS No. 161 expands the disclosure requirements in SFAS No. 133, ‘‘Accounting
for Derivative Instruments and Hedging Activities,’’ about an entity’s derivative instruments and
hedging activities. SFAS No. 161 is effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008. The Company is currently evaluating the impact SFAS
No. 161 will have on its consolidated financial statements.
NOTE 2—DEBT AND FINANCING ARRANGEMENTS
LONG-TERM DEBT
February 2, February 3,
2008 2007
7.50% Senior Subordinated Notes, due December 2014 .................. $200,000 $200,000
Senior Secured Term Loan, due October 2013 ......................... 154,652 320,000
Other notes payable, 8.0% ....................................... 248 268
Lease financing obligations, payable through October 2022 ................ 4,786 —
Capital lease obligations payable through October 2009 .................. 399 685
Line of credit agreement, through December 2009 ...................... 42,045 17,568
402,130 538,521
Less current maturities .......................................... 2,114 3,490
Total Long-Term Debt .......................................... $400,016 $535,031
Senior Secured Term Loan due October, 2013
On January 27, 2006 the Company entered into a $200,000 Senior Secured Term Loan facility due
January 27, 2011. This facility was secured by the real property and improvements associated with 154
of the Company’s stores. Interest at the rate of London Interbank Offered Rate (LIBOR) plus 3.0% on
this facility was payable by the Company starting in February 2006. Proceeds from this facility were
used to satisfy and discharge the Company’s then outstanding $43,000 6.88% Medium Term Notes due
March 6, 2006 and $100,000 6.92% Term Enhanced Remarketable Securities (TERMS) due July 7,
2016 and to reduce borrowings under the Company’s line of credit by approximately $39,000.
On October 27, 2006, the Company amended and restated the Senior Secured Term Loan facility
to (i) increase the size from $200,000 to $320,000, (ii) extend the maturity from January 27, 2011 to
October 27, 2013, (iii) reduce the interest rate from LIBOR plus 3.00% to LIBOR plus 2.75%. An
additional 87 stores (bringing the total to 241 stores) were added to the collateral pool securing the
facility. Proceeds were used to satisfy and discharge $119,000 in outstanding 4.25% convertible Senior
Notes due June 1, 2007 by deposit into an escrow fund with an independent trustee. The right of the
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10-K