Pep Boys 2014 Annual Report Download - page 54

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THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended January 31, 2015, February 1, 2014 and February 2, 2013
NOTE 4—ACCRUED EXPENSES
The following are the components of accrued expenses:
January 31, February 1,
(dollar amounts in thousands) 2015 2014
Casualty and medical risk insurance ................... $141,594 $153,830
Accrued compensation and related taxes ............... 29,984 30,645
Sales tax payable ................................. 13,178 12,245
Other ......................................... 41,420 40,683
Total ......................................... $226,176 $237,403
NOTE 5—DEBT AND FINANCING ARRANGEMENTS
The following are the components of debt and financing arrangements:
January 31, February 1,
(dollar amounts in thousands) 2015 2014
Senior Secured Term Loan, due October 2018 ........... $196,000 $198,000
Revolving Credit Agreement, through July 2016 .......... 17,000 3,500
Long-term debt ................................ 213,000 201,500
Current maturities ............................... (2,000) (2,000)
Long-term debt less current maturities ............... $211,000 $199,500
Senior Secured Term Loan due October 2018
On October 11, 2012, the Company entered into the Second Amended and Restated Credit
Agreement among the Company, Wells Fargo Bank, N.A., as Administrative Agent, and the other
parties thereto that (i) increased the size of the Company’s 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 the
Company’s owned locations to the collateral pool securing the Term Loan. The amended and restated
Term Loan was deemed to be substantially different than the prior Term Loan, and therefore the
modification of the debt was treated as a debt extinguishment. The Company recorded $6.5 million of
deferred financing costs related to the Second Amended and Restated Credit Agreement.
Net proceeds from the fiscal 2012 amendment and restatement of the Term Loan together with
cash on hand were used to settle the Company’s outstanding interest rate swap on the Term Loan as
structured prior to its amendment and restatement and to satisfy and discharge all of the Company’s
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. The Company 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.
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