Red Lobster 2002 Annual Report Download - page 37

DARDEN RESTAURANTS
This is the Bottom Line
NOTE 5 OTHER ASSETS
The components of other assets are as follows:
May 26, May 27,
2002 2001
Prepaid pension costs $ 48,262 $ 45,624
Capitalized software costs 33,615 14,366
Trust-owned life insurance 30,757 –
Liquor licenses 19,405 18,642
Prepaid interest and loan costs 17,895 19,768
Miscellaneous 9,503 10,477
Total other assets $159,437 $108,877
NOTE 6 SHORT-TERM DEBT
Short-term debt at May 26, 2002, and May 27, 2001, consisted
of $0 and $12,000, respectively, of unsecured commercial paper
borrowings with original maturities of one month or less. The
debt bore an interest rate of 4.3 percent at May 27, 2001.
NOTE 7 LONG-TERM DEBT
The components of long-term debt are as follows:
May 26, May 27,
2002 2001
8.375% senior notes due September 2005 $150,000 $150,000
6.375% notes due February 2006 150,000 150,000
5.75% medium-term notes due March 2007 150,000 –
7.45% medium-term notes due April 2011 75,000 75,000
7.125% debentures due February 2016 100,000 100,000
ESOP loan with variable rate of interest
(2.17% at May 26,2002) due
December 2018 39,140 44,455
Other –2,647
Total long-term debt 664,140 522,102
Less issuance discount (1,634) (1,528)
Total long-term debt less issuance discount 662,506 520,574
Less current portion –(2,647)
Long-term debt, excluding current portion $662,506 $517,927
In July 2000, the Company registered $500,000 of debt
securities with the Securities and Exchange Commission (SEC)
using a shelf registration process. Under this process, the
Company may offer, from time to time, up to $500,000 of debt
securities. In September 2000, the Company issued $150,000 of
unsecured 8.375 percent senior notes due in September 2005.
The senior notes rank equally with all of the Company’s other
unsecured and unsubordinated debt and are senior in right of
payment to all of the Company’s future subordinated debt.
In November 2000, the Company filed a prospectus sup-
plement with the SEC to offer up to $350,000 of medium-term
notes from time to time as part of the shelf registration process
referred to above. In April 2001, the Company issued $75,000
of unsecured 7.45 percent medium-term notes due in April 2011.
In March 2002, the Company issued $150,000 of unsecured
5.75 percent medium-term notes due in March 2007. As of
May 26, 2002, the Company’s shelf registration provides for the
issuance of an additional $125,000 of unsecured debt securities.
In January 1996, the Company issued $150,000 of unse-
cured 6.375 percent notes due in February 2006 and $100,000
of unsecured 7.125 percent debentures due in February 2016.
Concurrent with the issuance of the notes and debentures, the
Company terminated, and settled for cash, interest-rate swap
agreements with notional amounts totaling $200,000, which
hedged the movement of interest rates prior to the issuance
of the notes and debentures. The cash paid in terminating the
interest-rate swap agreements is being amortized to interest
expense over the life of the notes and debentures. The effec-
tive annual interest rate is 7.57 percent for the notes and 7.82
percent for the debentures, after consideration of loan costs,
issuance discounts, and interest-rate swap termination costs.
The Company also maintains a credit facility that expires
in October 2004, with a consortium of banks under which the
Company can borrow up to $300,000. The credit facility allows
the Company to borrow at interest rates that vary based on
the prime rate, LIBOR, or a competitively bid rate among the
members of the lender consortium, at the option of the Company.
The credit facility is available to support the Company’s com-
mercial paper borrowing program, if necessary. The Company
is required to pay a facility fee of 15 basis points per annum on
the average daily amount of loan commitments by the consor-
tium. The amount of interest and the annual facility fee are
subject to change based on the Company’s achievement of
certain debt ratings and financial ratios, such as maximum
debt to capital ratios. Advances under the credit facility are
unsecured. At May 26, 2002, and May 27, 2001, no borrow-
ings were outstanding under this credit facility.
The aggregate maturities of long-term debt for each of
the five fiscal years subsequent to May 26, 2002, and thereafter
are $0 in 2003 through 2005, $300,000 in 2006, $150,000 in
2007, and $214,140 thereafter.
Notes to Consolidated Financial Statements
Great Food and Beverage 34 Produce Great Results in 2002