Dollar Tree 2009 Annual Report Download - page 23

Management’s Discussion And Analysis Of Financial Condition
And Results Of Operations
annually. The Agreement, among other things, requires
the฀maintenance฀of฀certain฀specied฀nancial฀ratios,฀
restricts the payment of certain distributions and
prohibits the incurrence of certain new indebtedness.
As฀of฀January฀30,฀2010,฀we฀had฀the฀$250.0฀million฀term฀
loan outstanding under the Agreement and no amounts
outstanding฀under฀the฀$300.0฀million฀revolving฀line฀of฀
credit.
Revenue Bond Financing.฀In฀May฀1998,฀we฀
entered into an agreement with the Mississippi
Business Finance Corporation under which it issued
$19.0฀million฀of฀variable-rate฀demand฀revenue฀bonds.฀
We฀used฀the฀proceeds฀from฀the฀bonds฀to฀nance฀the฀
acquisition, construction and installation of land,
buildings, machinery and equipment for our distribu-
tion฀facility฀in฀Olive฀Branch,฀Mississippi.฀At฀January฀30,฀
2010,฀the฀balance฀outstanding฀on฀the฀bonds฀was฀$17.5฀
million.฀These฀bonds฀are฀due฀to฀be฀fully฀repaid฀in฀June฀
2018.฀The฀bonds฀do฀not฀have฀a฀prepayment฀penalty฀as฀
long as the interest rate remains variable. The bonds
contain a demand provision and, therefore, outstanding
amounts฀are฀classied฀as฀current฀liabilities.฀We฀pay฀
interest monthly based on a variable interest rate, which
was฀0.25%฀at฀January฀30,฀2010.
Lease Financing
Operating Lease Obligations. Our operating lease
obligations are primarily for payments under noncancel-
able store leases. The commitment includes amounts
for฀leases฀that฀were฀signed฀prior฀to฀January฀30,฀2010฀for฀
stores฀that฀were฀not฀yet฀open฀on฀January฀30,฀2010.
Capital Lease Obligations. Our capital lease obli-
gations are primarily for distribution center equipment
and computer equipment at the store support center.
Credit Agreement.฀On฀February฀20,฀2008,฀we฀
entered฀into฀a฀ve-year฀$550.0฀million฀unsecured฀Credit฀
Agreement (the Agreement). The Agreement provides
for฀a฀$300.0฀million฀revolving฀line฀of฀credit,฀including฀
up฀to฀$150.0฀million฀in฀available฀letters฀of฀credit,฀and฀
a฀$250.0฀million฀term฀loan.฀The฀interest฀rate฀on฀the฀
facility฀will฀be฀based,฀at฀our฀option,฀on฀a฀LIBOR฀rate,฀
plus a margin, or an alternate base rate, plus a margin.
The฀interest฀rate฀on฀the฀facility฀was฀0.74%฀at฀January฀
30,฀2010.฀The฀revolving฀line฀of฀credit฀also฀bears฀a฀
facilities฀fee,฀calculated฀as฀a฀percentage,฀as฀dened,฀of฀
the amount available under the line of credit, payable
quarterly. The term loan is due and payable in full at
the฀ve฀year฀maturity฀date฀of฀the฀Agreement.฀The฀
Agreement also bears an administrative fee payable
The฀following฀tables฀summarize฀our฀material฀contractual฀obligations฀at฀January฀30,฀2010,฀including฀both฀on-฀
and off-balance sheet arrangements, and our commitments, including interest on long-term borrowings (in millions):
Contractual Obligations Total 2010 2011 2012 2013 2014 Thereafter
Lease Financing
Operating lease obligations $ 1,518.7 $ 372.8 $ 326.9 $ 269.3 $ 202.7 $ 140.2 $ 206.8
Capital lease obligations 0.3 0.1 0.1 0.1 — — —
Long-term Borrowings
Credit Agreement 250.0 — — — 250.0 — —
Revenue฀bond฀nancing 17.5 17.5 — — — — —
Interest฀on฀long-term฀borrowings 10.2 5.6 2.5 1.9 0.2 — —
Total obligations $ 1,796.7 $ 396.0 $ 329.5 $ 271.3 $ 452.9 $ 140.2 $ 206.8
Commitments Total
Expiring
in 2010
Expiring
in 2011
Expiring
in 2012
Expiring
in 2013
Expiring
in 2014 Thereafter
Letters of credit and surety bonds $฀ ฀119.2 $ 119.0 $ 0.2฀ $ — $ — $ — $ —
Freight contracts 296.2 99.2 85.8 84.3 26.9 — —
Technology assets 2.4 2.4 — — — — —
Total commitments ฀ $฀ 417.8 $ 220.6 $ 86.0 $ 84.3 $ 26.9฀ $ — $ —
฀฀฀DOLLAR฀TREE,฀INC.฀•฀2009฀Annual฀Report฀฀฀21