TJ Maxx 2004 Annual Report Download - page 67

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The aggregate maturities of long-term debt, exclusive of current installments at January 29, 2005 are as follows:
Long
Te r m
In Thousands Debt
Fiscal Year
2007 $-
2008 375,755
2009 -
2010 199,689
Later years -
Deferred (loss) on settlement of interest rate swap and fair value adjustments on hedged debt (2,851)
Aggregate maturities of long-term debt, exclusive of current installments $572,593
The above maturity table assumes that all holders of the zero coupon convertible subordinated notes exercise their put options
in fiscal 2008. The note holders also have put options available to them in fiscal 2014. Any of the notes on which put options are not
exercised, redeemed or converted will mature in fiscal 2022.
In February 2001, TJX issued $517.5 million zero coupon convertible subordinated notes due in February 2021 and raised
gross proceeds of $347.6 million. The issue price of the notes represents a yield to maturity of 2% per year. Due to provisions of the
first put option on February 13, 2002, we amortized the debt discount assuming a 1.5% yield for fiscal 2002. The notes are
subordinated to all existing and future senior indebtedness of TJX. The notes are convertible into 16.9 million shares of common
stock of TJX if the sale price of our common stock reaches specified thresholds, if the credit rating of the notes is below investment
grade, if the notes are called for redemption or if certain specified corporate transactions occur. The holders of the notes have the
right to require us to purchase the notes for $391.7 million and $441.3 million on February 13, 2007 and 2013, respectively. The
repurchase amounts represent original purchase price plus accrued original issue discount. We may pay the purchase price in cash,
TJX stock or a combination of the two. If the holders exercise their put options, we expect to fund the payment with cash, financing
from our short-term credit facility, new long-term borrowings or a combination thereof. At the put date on February 13, 2004,
three of the notes were put to TJX. In addition, if a change in control of TJX occurs on or before February 13, 2007, each holder
may require TJX to purchase for cash all or a portion of such holder’s notes. We may redeem for cash all, or a portion of, the notes at
any time on or after February 13, 2007 for the original purchase price plus accrued original issue discount.
The fair value of our general corporate debt, including current installments, is estimated by obtaining market value quotes
given the trading levels of other bonds of the same general issuer type and market perceived credit quality. The fair value of our zero
coupon convertible subordinated notes is estimated by obtaining market quotes. The fair value of general corporate debt, including
current installments, at January 29, 2005 is $327.9 million versus a carrying value of $296.8 million. The fair value of the zero
coupon convertible subordinated notes is $447.6 million versus a carrying value of $375.8 million. These estimates do not necessarily
reflect certain provisions or restrictions in the various debt agreements which might affect our ability to settle these obligations.
During fiscal 2003, we entered into a $370 million five-year revolving credit facility and in fiscal 2005 we renewed our 364-day
revolving credit facility for $330 million. Effective March 17, 2005, we extended the 364-day agreement until July 15, 2005, with
substantially all of the terms and conditions of the original facility remaining unchanged. We anticipate that during the year we will
negotiate new agreements increasing the aggregate size of our revolving credit facilities and extending their maturity. The credit
facilities do not require any compensating balances however, TJX must maintain certain leverage and fixed charge coverage ratios. Based
on our current financial condition, we believe that non-compliance with these covenants is remote. The revolving credit facilities are
used as backup to our commercial paper program. As of January 29, 2005 there were no outstanding amounts under our credit facilities.
The maximum amount of our U.S. short-term borrowings outstanding was $5 million during fiscal 2005 and $27 million during fiscal
2004. There were no short-term borrowings during fiscal 2003. The weighted average interest rate on our U.S. short-term borrowings
was 2.04% in fiscal 2005 and 1.09% in fiscal 2004.
F-13