Barnes and Noble 2001 Annual Report Download - page 30

3. DEBT
On November 18, 1997, the Company obtained an
$850,000 five-year senior revolving credit facility (the
Revolving Credit Facility) with a syndicate led by The
Chase Manhattan Bank. The Revolving Credit Facility
permits borrowings at various interest-rate options
based on the prime rate or London Interbank Offer
Rate (LIBOR) depending upon certain financial tests. In
addition, the agreement requires the Company to pay a
commitment fee up to 0.25 percent of the unused
p o rtion depending upon certain financial tests. The
Revolving Credit Facility contains covenants,
limitations and events of default typical of cre d i t
facilities of this size and nature, including financial
covenants which require the Company to meet, among
other things, cash flow and interest-coverage ratios and
which limit capital expenditures. The Revolving Credit
Facility is secured by the capital stock, accounts
receivable and general intangibles of the Company’s
subsidiaries. Net proceeds from the Revolving Credit
Facility are available for general corporate purposes.
In fiscal 2000, the Company obtained an additional
$100,000 senior unsecured seasonal credit facility
(seasonal credit facility) with a syndicate of banks led
by The Chase Manhattan Bank. The seasonal credit
facility, which matured on January 31, 2001, provided
for borrowings at an interest rate based on LIBOR. In
addition, the agreement required the Company to pay a
commitment fee of 0.375 percent of the unused portion.
The seasonal credit facility was guaranteed by all
restricted subsidiaries of Barnes & Noble.
In fiscal 2001, the Company issued $300,000, 5.25
p e r cent convertible subordinated notes due March 15,
2009. The notes are convertible into the Company’s
common stock at a conversion price of $32.512 per share.
The Company from time to time enters into intere s t - r a t e
swap agreements to manage interest costs and risk associated
with changes in interest rates. These a g re e m e n t s
e ffectively convert underlying variable-rate debt based
on prime rate or LIBOR to fixed-rate debt through the
exchange of fixed and floating interest payment
obligations without the exchange of underlying principal
amounts. For each of the years ended Febru a ry 2, 2002
and Febru a ry 3, 2001, the Company had o u t s t a n d i n g
$55,000 of swaps, maturing in 2003.
Selected information related to the Company’s
Revolving Credit Facility and seasonal credit facility is
as follows:
Fiscal Year 2001 2000 1999
Balance at end of year $ 449,000 666,900 4 3 1,600
Average balance outstanding
during the year $ 689,326 6 97,832 3 97,1 1 4
Maximum borrowings outstanding
during the year $ 8 70 ,000 9 1 8 ,70 0 693,500
Weighted average interest rate
during the year 5. 2 7% 7.55% 6 . 0 1 %
Interest rate at end of year 4.33% 6 . 0 1 % 6.26%
Fees expensed with respect to the unused portion of the
C o m p a n y ’s revolving credit commitment were $516,
$272 and $664, during fiscal 2001, 2000 and 1999,
respectively.
The amounts outstanding under the Company’s
Revolving Credit Facility have been classified as long-
t e rm debt based on the Company’s intention to
maintain principal amounts outstanding.
The Company has no agreements to maintain
compensating balances.
4. FAIR VA LUES OF FINANCIAL INST R U M E N TS
The carrying values of cash and cash equivalents
reported in the accompanying consolidated balance
sheets approximate fair value due to the short-term
maturities of these assets. The aggregate fair value of
the Revolving Credit Facility approximates its carrying
amount, because of its recent and frequent repricing
based upon market conditions. Investments in publicly
traded securities accounted for under SFAS 115 are
carried at fair value.
I n t e rest-rate swap agreements are valued based on
market quotes obtained from dealers. The estimated
fair value of the interest-rate swaps liability was $2,256
and $542 at February 2, 2002 and February 3, 2001,
respectively. The interest-rate swaps are included as a
component of other long-term liabilities.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S c o n t i n u e d
30