Barnes and Noble 2013 Annual Report Download - page 24

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On April 27, 2012, the Company entered into an amend-
ment to the 2011 Amended Credit Agreement in order to
permit the transactions contemplated by the investment
agreement among the Company, Morrison and Microsoft
and to make certain other changes to the Company’s 2011
Amended Credit Agreement in connection therewith. On
December 21, 2012, the Company entered into an amend-
ment to the 2011 Amended Credit Agreement to permit
the transactions contemplated by the investment agree-
ment between NOOK Media and a subsidiary of Pearson
and make certain other changes to the Company’s 2011
Amended Credit Agreement in connection therewith. On
April 26, 2013, the Company entered into a letter amend-
ment to the 2011 Amended Credit Agreement in order to
amend the definition of Consolidated EBITDA contained
therein to exclude the impact of inventory charges in the
fiscal quarter ended January 26, 2013 from the calcula-
tion of Consolidated EBITDA. The 2011 Amended Credit
Agreement, as amended and modified to date, is hereinaf-
ter referred to as the 2013 Amended Credit Facility.
On June 24, 2013, the Company entered into an amend-
ment to its existing credit agreement with Bank of America,
N.A., as administrative agent, collateral agent and swing
line lender, and other lenders party thereto in order
to amend the restricted payments covenant contained
therein.
Selected information related to the Company’s credit facili-
ties (in thousands):
Fiscal 2013 Fiscal 2012 Fiscal 2011
Credit facility at period end $ 77,000 324,200 313,100
Average balance
outstanding during the
period $ 214,702 306,038 338,971
Maximum borrowings
outstanding during the
period $ 462,900 582,000 622,800
Weighted average interest
rate during the perioda5.56% 4.71% 6.23%
Interest rate at end of
period 4.93% 3.32% 5.13%
a Includes commitment fees.
Fees expensed with respect to the unused portion of the
credit facilities were $3.8 million, $3.3 million and $5.5
million during fiscal 2013, fiscal 2012 and fiscal 2011,
respectively.
The Company had $33.9 million of outstanding letters of
credit under the 2013 Amended Credit Facility as of April
27, 2013 compared with $37.4 million as of April 28, 2012.
The Company has no agreements to maintain compensat-
ing balances.
Capital Investment
Capital expenditures were $165.8 million, $163.6 million
and $110.5 million during fiscal 2013, fiscal 2012 and fiscal
2011, respectively. Capital expenditures planned for fiscal
2014 primarily relate to the Company’s digital initiatives,
build-out of its Palo Alto facilities, new stores, eCommerce
improvements, maintenance of existing stores and system
enhancements for the retail and college stores. Fiscal 2014
capital expenditure levels are expected to be comparable to
fiscal 2013, although commitment to many of such expen-
ditures has not yet been made.
Based upon the Company’s current operating levels and
capital expenditures for fiscal 2014, management believes
cash and cash equivalents on hand, net cash flows from
operating activities, cash received and committed in the
formation of NOOK Media, short-term vendor financing
and the borrowing capacity under the 2013 Amended Credit
Facility will be sufficient to meet the Company’s normal
working capital and debt service requirements for at least
the next twelve months. The Company regularly evaluates
its capital structure and conditions in the financing mar-
kets to ensure it maintains adequate flexibility to success-
fully execute its business plan.
On May 15, 2007, the Company announced that its Board
of Directors authorized a stock repurchase program for the
purchase of up to $400.0 million of the Company’s com-
mon stock. The maximum dollar value of common stock
that may yet be purchased under the current program is
approximately $2.5 million as of April 27, 2013.
Stock repurchases under this program may be made
through open market and privately negotiated transactions
from time to time and in such amounts as management
deems appropriate. As of April 27, 2013, the Company has
repurchased 34,078,089 shares at a cost of approximately
$1.1 billion under its stock repurchase programs. The
repurchased shares are held in treasury.
On December 29, 2011, the Company sold its distribution
facility located in South Brunswick, New Jersey for $18.0
million, which resulted in a loss of $2.2 million.
22 Barnes & Noble, Inc. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued