Pottery Barn 2006 Annual Report Download - page 63

center. As of January 28, 2007, we had acquired and installed all $15,000,000 of leasehold improvements and
equipment associated with the facility.
The aggregate maturities of long-term debt at January 28, 2007 were as follows:
Dollars in thousands
Fiscal 2007 $15,853
Fiscal 2008 1,584
Fiscal 2009 1,438
Fiscal 2010 1,462
Fiscal 2011 1,414
Thereafter 6,924
Total $28,675
Credit Facility
As of January 28, 2007, 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). Prior to April 4, 2011,
we may, upon notice to the lenders, request an increase in the new credit facility of up to $200,000,000, to
provide for a total of $500,000,000 of unsecured revolving credit. The credit facility contains events of default
that include, among others, non-payment of principal, interest or fees, violation of covenants, inaccuracy of
representations and warranties, 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 the our obligations
under the credit facility. The credit facility matures on October 4, 2011, 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 2006 or fiscal 2005. However, as of January 28,
2007, $37,398,000 in issued but undrawn standby letters of credit was 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 28, 2007, we were in compliance with our
financial covenants under the credit facility.
Letter of Credit Facilities
We have five unsecured commercial letter of credit reimbursement facilities for an aggregate of $165,000,000,
each of which expires on September 8, 2007. As of January 28, 2007, an aggregate of $124,860,000 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 28, 2007. The latest expiration possible
for any future letters of credit issued under the facilities is February 5, 2008.
Interest Expense
Interest expense was $2,125,000 (net of capitalized interest of $699,000), $1,975,000 (net of capitalized interest
of $1,200,000) and $1,703,000 (net of capitalized interest of $1,689,000) for fiscal 2006, fiscal 2005 and fiscal
2004, respectively.
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Form 10-K