Pep Boys 2012 Annual Report Download - page 68

pension plan obligation was settled in December of 2012 with a $14.1 million contribution to fully
fund the plan on a termination basis. See Note 13 of the Notes to Consolidated Financial
Statements in ‘‘Item 8 Financial Statements and Supplementary Data’’ for further discussion of our
pension plans. The above table does not reflect the timing of projected settlements for our
recorded asset retirement obligation costs and income tax liabilities because we cannot make a
reliable estimate of the timing of the related cash payments.
From From
Commercial Commitments Total Within 1 year 1 to 3 years 3 to 5 years After 5 years
(dollar amounts in thousands)
Standby letters of credit .............. $32,173 $32,173 $ — $— $—
Surety bonds ...................... 11,541 8,295 3,246 — —
Purchase obligations(1)(2) .............. 4,448 4,448 — — —
Total commercial commitments ........ $48,162 $44,916 $3,246 $— $—
(1) Our open purchase orders are based on current inventory or operational needs and are fulfilled by
our vendors within short periods of time. We currently do not have minimum purchase
commitments under our vendor supply agreements (other than(2) below) and generally, our open
purchase orders (orders that have not been shipped) are not binding agreements. Those purchase
obligations that are in transit from our vendors at February 2, 2013 that we do not have legal title
to are considered commercial commitments.
(2) In fiscal 2011, we entered into a commercial commitment to purchase 4.2 million units of oil
products at various prices over a two-year period. Based on our present consumption rate, we
expect to meet the cumulative minimum purchase requirements under this contract by the end of
fiscal 2013.
Senior Secured Term Loan Facility due October 2018
On October 11, 2012, we entered into the Second Amended and Restated Credit Agreement that
(i) increased the size of our Senior Secured Term Loan (the ‘‘Term Loan’’) to $200.0 million,
(ii) extended the maturity of the Term Loan from October 27, 2013 to October 11, 2018, (iii) reset the
interest rate under the Term Loan to the London Interbank Offered Rate (LIBOR), subject to a floor
of 1.25%, plus 3.75% and (iv) added an additional 16 of our owned locations to the collateral pool
securing the Term Loan. The amended and restated Term Loan is deemed to be substantially different
than the prior Term Loan, and therefore the modification of the debt has been treated as a debt
extinguishment. As of February 2, 2013, 142 stores collateralized the Term Loan. We recorded
$6.5 million of deferred financing costs related to the Second Amended and Restated Credit
Agreement. The amount outstanding under the term loan as of February 2, 2013 was $200.0 million.
Net proceeds from the amended and restated Term Loan together with cash on hand were used to
settle the outstanding interest rate swap on the Term Loan as structured prior to its amendment and
restatement and to satisfy and discharge all of our outstanding 7.5% Senior Subordinated Notes
(‘‘Notes’’) due 2014. The settlement of the interest rate swap resulted in the reclassification of
$7.5 million of accumulated other comprehensive loss to interest expense. We recognized, in interest
expense, $1.9 million of deferred financing costs related to the Notes and the Term Loan as structured
prior to its amendment and restatement. The interest payment and the swap settlement payment are
presented within cash flows from operations on the consolidated statement of cash flows.
Revolving Credit Agreement, Through July 2016
On January 16, 2009 we entered into a Revolving Credit Agreement (the ‘‘Agreement’’) with
available borrowings up to $300.0 million and a maturity of January 2014. Total incurred fees of
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