Pottery Barn 2009 Annual Report Download - page 62

Note C: Borrowing Arrangements
Long-term debt consists of the following:
Dollars in thousands Jan. 31, 2010 Feb. 1, 2009
Capital leases $ 459 $ 573
Memphis-based distribution facilities obligation 9,800 11,238
Mississippi industrial development bonds — 13,150
Total debt 10,259 24,961
Less current maturities 1,587 14,702
Total long-term debt $ 8,672 $10,259
Capital Leases
As of January 31, 2010 and February 1, 2009, capital lease obligations of $459,000 and $573,000, respectively,
consist primarily of leases for distribution center equipment.
Memphis-Based Distribution Facilities Obligation
As of January 31, 2010 and February 1, 2009, total debt of $9,800,000 and $11,238,000, respectively, consists
entirely of bond-related debt pertaining to the consolidation of our Memphis-based distribution facilities due to
their related party relationship and our obligation to renew the leases until the bonds are fully repaid. See Note F
for a discussion on our bond-related debt pertaining to our Memphis-based distribution facilities.
Mississippi Industrial Development Bonds
In June 2004, we entered into an agreement whereby the Mississippi Business Finance Corporation issued
$15,000,000 in long-term variable rate industrial development bonds, the proceeds, net of debt issuance costs, of
which were loaned to us to finance the acquisition and installation of leasehold improvements and equipment
located in our Olive Branch, Mississippi distribution center. On December 7, 2009, the remaining outstanding
balance on these bonds in the amount of $13,150,000 was repaid, without penalty.
The aggregate maturities of long-term debt at January 31, 2010 were as follows:
Dollars in thousands
Fiscal 2010 $ 1,587
Fiscal 2011 1,542
Fiscal 2012 1,652
Fiscal 2013 1,724
Fiscal 2014 1,785
Thereafter 1,969
Total $10,259
Credit Facility
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. Prior to April 4, 2011, we may, upon notice to the lenders, request an increase in the
credit facility of up to $200,000,000, to provide for a total of $500,000,000 of unsecured revolving credit. The
revolving line of credit facility contains certain financial covenants, including a maximum leverage ratio (funded
debt adjusted for lease and rent expense to earnings before interest, income tax, depreciation, amortization and
rent expense “EBITDAR”), a minimum fixed charge coverage ratio (calculated as EBITDAR to total fixed
charges), and covenants limiting our ability to repurchase shares of stock or increase our dividend, in addition to
covenants limiting our ability to dispose of assets, make acquisitions, be acquired (if a default would result from
the acquisition), incur indebtedness, grant liens and make investments. The credit facility also 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
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