Pep Boys 2013 Annual Report Download - page 125

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THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended February 1, 2014, February 2, 2013 and January 28, 2012
NOTE 5—DEBT AND FINANCING ARRANGEMENTS (Continued)
covenants contained in its debt agreements. The weighted average interest rate on all debt borrowings
during fiscal 2013 and 2012 was 4.9% and 5.1%, respectively.
The Company has a supplier financing program with availability up to $200.0 million which is
funded by various bank participants who have the ability, but not the obligation, to purchase account
receivables owed by the Company directly from suppliers. The Company, in turn, makes the regularly
scheduled full supplier payments to the bank participants. The outstanding balance under the program
was $129.8 million and $149.7 million under the program as of February 1, 2014 and February 2, 2013,
respectively.
The Company has letter of credit arrangements in connection with its risk management and import
merchandising programs. The Company had $13.9 million and $5.2 million outstanding commercial
letters of credit as of February 1, 2014 and February 2, 2013, respectively. The Company was
contingently liable for $30.9 million and $32.2 million in outstanding standby letters of credit as of
February 1, 2014 and February 2, 2013, respectively.
The Company is also contingently liable for surety bonds in the amount of approximately
$10.6 million and $11.5 million as of February 1, 2014 and February 2, 2013, respectively. The surety
bonds guarantee certain payments (for example utilities, easement repairs, licensing requirements and
customs fees).
The annual maturities of long-term debt, for the next five fiscal years are:
(dollar amounts in thousands)
Fiscal Year Long-Term Debt
2014 ................................................ $ 2,000
2015 ................................................ 2,000
2016 ................................................ 5,500
2017 ................................................ 2,000
2018 ................................................ 190,000
Thereafter ........................................... —
Total ............................................... $201,500
Interest rates that are currently available to the Company for issuance of debt with similar terms
and remaining maturities are used to estimate fair value for debt obligations and are considered a
level 2 measure under the fair value hierarchy. The estimated fair value of long-term debt including
current maturities was $203.7 million and $203.5 million as of February 1, 2014 and February 2, 2013,
respectively.
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