Circuit City 2009 Annual Report Download - page 52

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Table of Contents
Included in property, plant and equipment are assets under capital leases, as follows (in thousands):
Depreciation charged to operations for property, plant and equipment including capital leases in 2009, 2008, and 2007 was $11.2 million,
$10.1 million and $8.8 million, respectively.
4.
CREDIT FACILITIES
The Company maintains a $120 million (which may be increased by up to $30 million, subject to certain conditions) secured revolving
credit agreement with a group of financial institutions which provides for borrowings in the United States and United Kingdom. The
borrowings are secured by all of the domestic and United Kingdom accounts receivable, all domestic inventories, the United Kingdom
headquarters building and the Company’s shares of stock in its domestic and United Kingdom subsidiaries. The credit facility expires and
outstanding borrowings thereunder are due on October 26, 2010. The borrowings under the agreement are subject to borrowing base
limitations of up to 85% of eligible accounts receivable and up to 40% of qualified inventories. The interest on outstanding advances is
payable monthly, at the Company’s option, at the prime rate (3.25% at December 31, 2009) plus 0.25% or the overnight daily LIBOR rate
(0.5% at December 31, 2009) plus 1.25% to 2.25%. The undrawn availability under the facility may not be less than $15 million until the
last day of any month in which the availability net of outstanding borrowings is at least $70 million. The facility also calls for a commitment
fee payable quarterly in arrears of 0.375% of the average daily unused portions of the facility. The revolving credit agreement requires that
a minimum level of availability be maintained. If such availability is not maintained, the Company will be required to maintain a fixed
charge coverage ratio (as defined). The agreement contains certain other covenants, including restrictions on capital expenditure,
acquisitions and payments of dividends. We were in compliance with all of the covenants as of December 31, 2009. As of December 31,
2009, eligible collateral under the agreement was $110.8 million and total availability was $98.7 million. There were outstanding letters of
credit of $12.1 million and there were no outstanding advances.
The Company’s Inmac WStore subsidiary maintains a secured revolving credit agreement with a financial institution in France which is
secured by WStore Europe SA accounts receivable balances. Available amounts for borrowing under this facility includes all accounts
receivable balances not over 60 days past due reduced by the greater of €4.0 million or 10% of the eligible accounts receivable. As of
December 31, 2009 there was availability under this credit facility of approximately €6.0 million ($8.6 million) and there was €9.9 million
($14.2 million) of outstanding borrowings. Outstanding balances under this agreement carry interest at 1.5% as of December 31. The credit
facility duration is indefinite; however either party may cancel the agreement with ninety days notice. Under this agreement the Company is
subject to certain non-financial covenants which it was in compliance with at December 31, 2009.
The Company’s WStore UK subsidiary maintains a £2 million secured revolving credit agreement with a financial institution in the United
Kingdom which is secured by WStore UK’s accounts receivable balances. Available amounts for borrowing under this facility includes
accounts receivable balances less a 30% retention. As of December 31, 2009 there was availability under this credit facility of
approximately £0.5 million ($0.8 million).Outstanding balances under this agreement carry interest at 2.5% above the overnight daily
LIBOR rate (0.5% at December 31, 2009. The credit facility duration is indefinite; however either party may cancel the agreement with
ninety days notice. Under this agreement the Company is subject to certain non-financial covenants which it was in compliance with at
December 31, 2009.
The weighted average interest rate on short-term borrowings was 3.3%, 5.1%, and 7.5% in 2009, 2008 and 2007, respectively.
5.
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following (in thousands):
49
2009
2008
Furniture and fixtures, office, computer and other equipment
$
5,525
$
4,764
Less: Accumulated amortization
3,510
2,573
$
2,015
$
2,191
December 31,
2009
2008
Payroll and employee benefits
$
27,715
$
25,669
Freight
9,171
6,820
Deferred revenue
1,064
5,683
Advertising
8,030
5,286
Sales and VAT tax payable
7,989
8,061
Other
26,976
20,833
$
80,945
$
72,352