DSW 2015 Annual Report Download - page 64

Table of Contents
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Total Losses
As of January 30, 2016
Fiscal
Level 1
Level 2
Level 3
Fair Value as of the Impairment
Date
2015
2014
(in thousands)
(in thousands)
Assets held and used —
—
—
—
$ 962
$ 5,095
After the impairment losses were recorded, the remaining fair value of assets was zero.
 
- On August 2, 2013, the Company entered into a secured revolving credit agreement (the "Credit Facility"). The Credit
Facility, together with the Letter of Credit Agreement (defined below), amended and restated the prior credit facility, dated June 30, 2010. The Credit Facility
has a term of five years that will expire on July 31, 2018. During fiscal 2015, the Company requested that the Lender increase the revolving credit
commitment from $50 million to $100 million (see amendment to the original Credit Facility, effective January 11, 2016, in the Index to Exhibits). The
Credit Facility may be further increased by up to $50 million upon request subject to lender acceptance, financial condition and compliance with covenants.
The Credit Facility is secured by a lien on substantially all of DSW Inc.'s personal property assets and its subsidiaries with certain exclusions and may be used
to provide funds for general corporate purposes, to provide for ongoing working capital requirements and to make permitted acquisitions. Revolving credit
loans bear interest under the Credit Facility at the Company's option under: (a) a base rate option at a rate per annum equal to the highest of (i) the Federal
Funds Open Rate (as defined in the Credit Facility), plus 0.5%, (ii) the Lender's prime rate, and (iii) the Daily LIBOR Rate (as defined in the Credit Facility)
plus 1.0%, plus in each instance an applicable margin, which is between 1.00 and 1.25, based upon revolving credit availability; or (b) a LIBOR option at a
rate equal to the LIBOR Rate (as defined in the Credit Facility), plus an applicable margin based upon the Company's revolving credit availability. In
addition, the Credit Facility contains restrictive covenants relating to management and the operation of DSW Inc.'s business. These covenants, among other
things, limit or restrict DSW Inc.'s ability to grant liens on its assets, limit its ability to incur additional indebtedness, limit its ability to enter into transactions
with affiliates and limit its ability to merge or consolidate with another entity. The Credit Facility also requires that DSW Inc. meet the minimum cash and
investments requirement of $125 million, as defined in the Credit Facility. An additional covenant limits payments for capital expenditures to $200 million
in any fiscal year. The Company paid $103.9 million in cash for capital expenditures in fiscal 2015.
As of January 30, 2016 and January 31, 2015, the Company had no outstanding borrowings under the Credit Facility with availability of $100 million and
$50 million, respectively.
Total interest expense related to the Credit Facility includes fees, such as commitment and line of credit fees. Interest expense related to the Credit Facility for
fiscal 2015 and 2014 was less than $0.1 million. Interest expense related to the Credit Facility for fiscal 2013 was $0.3 million.
 Also on August 2, 2013, the Company entered into a letter of credit agreement (the “Letter of Credit Agreement”).
The Letter of Credit Agreement provides for the issuance of letters of credit up to $50 million, with a term of five years that will expire on August 2, 2018.
The facility for the issuance of letters of credit is secured by a cash collateral account containing cash in an amount equal to 103% of the face amount of any
letter of credit extension (105% for extensions denominated in foreign currency) and is used for general corporate purposes. The Letter of Credit Agreement
requires compliance with conditions precedent that must be satisfied prior to issuing any letter of credit or extension. In addition, the Letter of Credit
Agreement contains restrictive covenants relating to the Company's management and the operation of the Company's business. These covenants, among
other things, limit or restrict the Company's ability to grant liens on its assets, limit its ability to incur additional indebtedness, limit its ability to enter into
transactions with affiliates and limit its ability to merge or consolidate with another entity. An event of default may cause the applicable interest rate and fees
to increase by 2% per annum.
As of January 30, 2016 and January 31, 2015, the Company had $7.1 million and $9.3 million, respectively, in outstanding letters of credit under the Letter
of Credit Agreement, and $7.7 million and $11.5 million, respectively, in restricted cash on deposit as collateral under the Letter of Credit Agreement. The
restricted cash balance is recorded in prepaid expenses and other current assets on the consolidated balance sheets.
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Source: DSW Inc., 10-K, March 24, 2016 Powered by Morningstar® Document Research℠
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