Circuit City 1997 Annual Report Download - page 24

During 1997 the Company recorded a charge relating to the impairment of certain long-lived assets of approximately $2.9 million
5. RELATED PARTY TRANSACTIONS
The Company leases several warehouse and office facilities from affiliates (see Note 9). Rent expense under those leases aggregated
approximately $1,901,000, $2,130,000 and $2,366,000 for the years ended December 31, 1997, 1996 and 1995, respectively.
6. LONG-TERM DEBT
Long-term debt consist of the following (in thousands):
At December 31, 1997, the aggregate maturities of long-term debt are as follows (in thousands):
(a) A subsidiary of the Company entered into a mortgage agreement ("Mortgage") in the amount of 1.2 million Pounds Sterling due in its
entirety in June 1999, with interest payable semi-annually at a rate of 9.6 percent per annum. The Mortgage is secured by land and building
with an aggregate net book value of 2.4 million Pounds Sterling at December 31, 1997. The Mortgage contains certain covenants calling for
timely reporting of financial information, restrictions on changes in ownership and employment levels by such subsidiary. As of December 31,
1997 the Company was in compliance with those covenants.
The Company maintains lines of credit with various financial institutions. The maximum aggregate amounts available under these lines of
credit were $95 million and $52 million at December 31, 1997 and 1996. No amounts were outstanding under these lines at December 31,
1997. These lines accrue interest at variable rates of either the prime rate or LIBOR plus 63 basis points. The prime rate and LIBOR were 8.25
percent and 5.9 percent, respectively, at December 31, 1997. These lines expire on various dates through December 1998.
Associated with the lines of credit, the Company may have outstanding letters of credit equal to the amount of the total line less outstanding
borrowings. At December 31, 1997 there was a $4 million outstanding standby letter of credit.
The Company maintains a secured line of credit with a bank with a maximum amount available of 2.0 million Pounds Sterling. Borrowings, of
which there were none as of December 31, 1997 and 1996, bear interest at the bank's base rate (6% at December 31, 1997) plus 2% and are
secured by substantially all of the assets of the Company's United Kingdom subsidiaries. This line expires in April 1998 and is renewable at the
Company's option.
7. SHAREHOLDERS' EQUITY
At December 31, 1997, there were 25.0 million shares of preferred stock, $.01 par value, of which none were issued. Common stock at such
date consisted of 150.0 million shares authorized, par value of $.01 per share, of which 38,231,990 were issued and outstanding.
As required by law, certain foreign subsidiaries must retain a percentage of shareholders' capital in the respective company. Accordingly, a
portion of retained earnings is restricted and not available for distribution to shareholders. Such amount at December 31, 1997 was not
material.
STOCK OPTION PLANS - The Company has two fixed option plans which reserve shares of common stock for issuance to key employees,
directors, consultants and advisors to the company. The following is a description of these plans:
Less accumulated depreciation and amortization................................... 19,454 16,166
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Net property, plant and equipment..........................................$ 29,401 $ 21,878
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DECEMBER 31 1997 1996
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Foreign denominated secured loan (a)..................................$1,972 $ 2,030
Capitalized lease obligations......................................... 12 17
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Total............................................................ 1,984 2,047
Less: current maturities......................................... 12 17
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Long-term debt .................................................$1,972 $ 2,030
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YEAR ENDING DECEMBER 31 AMOUNT
1998.................................................$ 12
1999.................................................. 1,972
Total notes payable...................................$ 1,984
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