Aarons 2012 Annual Report Download - page 69

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NOTE 5: PROPERTY, PLANT AND EQUIPMENT
Following is a summary of the Company’s property, plant, and equipment at December 31:
(In Thousands)
2012
2011
Land
$ 25,285
$ 25,882
Buildings and Improvements
81,773
81,566
Leasehold Improvements and Signs
120,883
116,632
Fixtures and Equipment1
152,436
133,615
Assets Under Capital Leases:
with Related Parties
8,158
7,641
with Unrelated Parties
10,564
10,564
Construction in Progress
5,414
5,444
404,513
381,344
Less: Accumulated Depreciation and
Amortization
(173,915)
(154,725)
$ 230,598
$ 226,619
1 Includes internal-use software development costs of $22.6 million and $15.6 million as of
December 31, 2012 and 2011, respectively. Accumulated amortization of internal-use software
development costs amounted to $6.6 million and $9.8 million as of December 31, 2012 and
2011, respectively.
Amortization expense on assets recorded under capital leases is included in operating expenses and was $1.2
million, $1.2 million and $1.9 million in 2012, 2011 and 2010, respectively. Capital leases consist of buildings and
improvements. Assets under capital leases with related parties included $4.8 million and $4.2 million in
accumulated depreciation and amortization as of December 31, 2012 and 2011, respectively. Assets under capital
leases with unrelated parties included $4.4 million and $3.8 million in accumulated depreciation and amortization as
of December 31, 2012 and 2011, respectively.
NOTE 6: CREDIT FACILITIES
Following is a summary of the Company’s credit facilities at December 31:
(In Thousands)
2012
2011
Senior Unsecured Notes
$ 125,000
$ 137,000
Capital Lease Obligation:
with Related Parties
6,122
6,730
with Unrelated Parties
7,156
6,809
Other Debt
3,250
3,250
$ 141,528
$ 153,789
Bank Debt
On December 13, 2012, the Company entered into the fourth amendment to its revolving credit agreement (―Credit
Agreement‖), dated May 23, 2008, as amended. The amendments to the Credit Agreement (i) extend the maturity
date of the Credit Agreement until December 13, 2017, (ii) add and amend provisions applicable to lenders to
further define instances of lender default, (iii) increase the dollar thresholds applicable to certain negative covenants,
events of default and reporting and notice requirements to make them less restrictive, (iv) provide for the removal of
certain financial covenants in the event that the agreement governing the Company’s privately placed debt securities
are amended to remove substantially similar covenants contained therein, and (v) replace the pricing grid schedule to
effect slight increases to certain applicable margins. The Company entered into the fourth amendment in order to
extend the maturity date of the Credit Agreement, which would have expired on May 23, 2013, to December 13,
2017.
The Company’s Credit Agreement is with several banks and provides for unsecured borrowings up to $140.0 million
(including a letter of credit and swingline loan subfacility). Amounts borrowed bear interest at the lower of the
lender’s prime rate or one-month LIBOR plus a margin ranging from 1.0% to 1.5% as determined by the Company’s
ratio of total debt to EBITDA. At December 31, 2012 and 2011, there was a zero balance under the Company’s