Red Lobster 2011 Annual Report Download - page 36

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Management’s Discussion and Analysis
of Financial Condition and Results of Operations
Darden
›
Darden Restaurants, Inc.
34
As of May 29, 2011, we had no outstanding balances under the Revolving
Credit Agreement. As of May 29, 2011, $185.5 million of commercial paper and
$68.2 million of letters of credit were outstanding, which are backed by this
facility. After consideration of borrowings currently outstanding and commercial
paper and letters of credit backed by the Revolving Credit Agreement, as of
May 29, 2011, we had $496.3 million of credit available under the Revolving
Credit Agreement.
At May 29, 2011, our long-term debt consisted principally of:
฀ •฀฀฀$350.0฀million฀of฀unsecured฀5.625฀percent฀senior฀notes฀due฀in฀
October฀2012;
฀ •฀฀฀$100.0฀million฀of฀unsecured฀7.125฀percent฀debentures฀due฀in฀
February฀2016;
฀ •฀฀฀$500.0฀million฀of฀unsecured฀6.200฀percent฀senior฀notes฀due฀in฀
October฀2017;
฀ •฀฀฀$150.0฀million฀of฀unsecured฀6.000฀percent฀senior฀notes฀due฀in฀
August฀2035;
฀ •฀฀฀$300.0฀million฀of฀unsecured฀6.800฀percent฀senior฀notes฀due฀in฀
October฀2037;฀and
฀ •฀฀฀An฀unsecured,฀variable฀rate฀$8.0฀million฀commercial฀bank฀loan฀due฀in฀
December 2018 that is used to support a loan from us to the Employee
Stock Ownership Plan (ESOP) portion of the Darden Savings Plan.
During fiscal 2011, we repaid, at maturity, our $150.0 million 4.875 percent
senior notes due August 2010 and our $75.0 million 7.450 percent medium-term notes
due April 2011 with excess cash from operations. During fiscal 2012, we expect to
issue unsecured debt securities that will effectively refinance these notes.
The interest rates on our $350.0 million senior notes due October 2012,
$500.0 million senior notes due October 2017 and $300.0 million senior notes due
October 2037 are subject to adjustment from time to time if the debt rating assigned
to such series of notes is downgraded below a certain rating level (or subsequently
upgraded). The maximum adjustment is 2.000 percent above the initial interest
rate and the interest rate cannot be reduced below the initial interest rate. As of
May 29, 2011, no adjustments to these interest rates had been made.
All of our long-term debt currently outstanding is expected to be repaid
entirely at maturity with interest being paid semi-annually over the life of the
debt. The aggregate maturities of long-term debt for each of the five fiscal years
subsequent to May 29, 2011 and thereafter are $0.0 million in fiscal 2012,
$350.0 million in fiscal 2013, $0.0 million in fiscal 2014, $0.0 million in fiscal
2015, $100.0 million in fiscal 2016 and $958.0 million thereafter.
From time to time we enter into interest rate derivative instruments to
manage interest rate risk inherent in our operations. See Note 10 to our
consolidated financial statements in Part II, Item 8 of this report, incorporated
herein by reference.
Through our shelf registration statement on file with the Securities and
Exchange Commission (SEC), depending on conditions prevailing in the public
capital markets, we may issue unsecured debt securities from time to time in
one or more series, which may consist of notes, debentures or other evidences
of indebtedness in one or more offerings.
We may from time to time repurchase our outstanding debt in privately
negotiated transactions. Such repurchases, if any, will depend on prevailing
market conditions, our liquidity requirements and other factors.