Saks Fifth Avenue 2011 Annual Report Download - page 64

SAKS INCORPORATED & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share amounts)
NOTE 6: DEBT
A summary of long-term debt and capital lease obligations is as follows:
January 28, 2012 January 29, 2011
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Notes 9.875%, matured fiscal year 2011 ................. $ — $ — $141,557 $ 147,573
Notes 7.00%, maturing fiscal year 2013 .................. 2,125 2,183 2,125 2,168
Notes 7.375%, maturing fiscal year 2019 ................. — — 1,911 1,835
Convertible notes 7.50%, maturing fiscal year 2013, net (1) . . . 109,549 234,894 104,777 265,906
Convertible notes 2.00%, maturing fiscal year 2024, net (2) . . . 210,840 228,592 202,648 244,720
Capital lease obligations (3) ........................... 52,920 n/a 53,730 n/a
Total debt ....................................... 375,434 465,669 506,748 662,202
Less current portion:
Notes 9.875%, matured fiscal year 2011 ................. — — (141,557) (147,573)
Capital lease obligations (3) ........................... (7,472) n/a (5,941) n/a
Current portion of long-term debt .................... (7,472) — (147,498) (147,573)
Long-term debt ..................................... $367,962 $ 465,669 $ 359,250 $ 514,629
(1) Amount represents the $120,000 convertible notes, net of the unamortized discount of $10,451 and $15,223 as of
January 28, 2012 and January 29, 2011, respectively.
(2) Amount represents the $230,000 convertible notes, net of the unamortized discount of $19,160 and $27,352 as of
January 28, 2012 and January 29, 2011, respectively.
(3) Disclosure regarding fair value of capital leases is not required.
The fair values of the long-term debt instruments were estimated based on quotes obtained from financial
institutions for the same or similar instruments or on the basis of quoted market prices.
Revolving Credit Facility
The Company has a $500,000 revolving credit facility, subject to a borrowing base equal to a specified
percentage of eligible inventory and certain credit card receivables. The availability is based primarily on
current levels of inventory, less outstanding letters of credit.
In March 2011, the Company entered into an amendment to its existing revolving credit agreement. The
amendment extended the maturity date of this facility from November 23, 2013 to March 29, 2016 and
revised certain terms of the existing revolving credit facility. The maximum committed borrowing capacity of
the amended facility remains at $500,000. Fees incurred associated with the amendment to the revolving
credit agreement were $2,961.
The obligations under the facility are guaranteed by certain of the Company’s existing and future domestic
subsidiaries, and the obligations are secured by the Company’s and the guarantors’ merchandise inventories
and certain third party receivables. Borrowings under the facility bear interest at a per annum rate of either:
(i) LIBOR plus a percentage ranging from 2.00% to 2.50%, or (ii) the higher of the prime rate or the federal
funds rate plus a percentage ranging from 1.00% to 1.50%. Letters of credit are charged a per annum fee equal
to the then applicable LIBOR borrowing spread (for standby letters of credit) or the applicable LIBOR spread
minus 0.50% (for documentary or commercial letters of credit). The Company also pays an unused line fee
ranging from 0.38% to 0.50% per annum on the average daily unused revolver.
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