Pottery Barn 2005 Annual Report Download - page 62

The aggregate maturities of long-term debt at January 29, 2006 were as follows:
Dollars in thousands
Fiscal 20061$18,864
Fiscal 2007 1,668
Fiscal 2008 1,584
Fiscal 2009 1,438
Fiscal 2010
Thereafter
1,462
8,338
Total $33,354
1Includes $14.2 million related to the Mississippi Debt Transaction classified as current debt.
Credit Facility
As of January 29, 2006, we have a credit facility that provides for a $300,000,000 unsecured revolving line of
credit that may be used for loans or letters of credit and contains certain financial covenants, including a
maximum leverage ratio (funded debt adjusted for lease and rent expense to EBITDAR), and a minimum fixed
charge coverage ratio. Prior to August 22, 2009, we may, upon notice to the lenders, request an increase in the
credit facility of up to $100,000,000, to provide for a total of $400,000,000 of unsecured revolving credit. The
credit facility contains events of default that include, among others, non-payment of principal, interest or fees,
inaccuracy of representations and warranties, violation of covenants, bankruptcy and insolvency events, material
judgments, cross defaults to certain other indebtedness and events constituting a change of control. The
occurrence of an event of default will increase the applicable rate of interest by 2.0% and could result in the
acceleration of our obligations under the credit facility, and an obligation of any or all of our U.S. subsidiaries to
pay the full amount of our obligations under the credit facility. The credit facility matures on February 22, 2010,
at which time all outstanding borrowings must be repaid and all outstanding letters of credit must be cash
collateralized.
We may elect interest rates calculated at Bank of America’s prime rate (or, if greater, the average rate on
overnight federal funds plus one-half of one percent) or LIBOR plus a margin based on our leverage ratio. No
amounts were borrowed under the credit facility during fiscal 2005 or fiscal 2004. However, as of January 29,
2006, $36,073,000 in issued but undrawn standby letters of credit were outstanding under the credit facility. The
standby letters of credit were issued to secure the liabilities associated with workers’ compensation, other
insurance programs and certain debt transactions. As of January 29, 2006, we were in compliance with our
financial covenants under the credit facility.
Letter of Credit Facilities
We have three unsecured commercial letter of credit reimbursement facilities for an aggregate of $145,000,000,
each of which expires on September 9, 2006. As of January 29, 2006, an aggregate of $105,260,000 was
outstanding under the letter of credit facilities. Such letters of credit represent only a future commitment to fund
inventory purchases to which we had not taken legal title as of January 29, 2006. The latest expiration possible
for any future letters of credit issued under the agreements is February 6, 2007.
Interest Expense
Interest expense was $1,975,000 (net of capitalized interest of $1,200,000), $1,703,000 (net of capitalized interest
of $1,689,000), and $22,000 (net of capitalized interest of $2,142,000) for fiscal 2005, fiscal 2004 and fiscal
2003, respectively.
50