Express 2011 Annual Report Download - page 82

Download and view the complete annual report

Please find page 82 of the 2011 Express annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 112

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112

Topco Credit Facility
On June 26, 2008, Express Topco, as borrower, entered into a $300.0 million secured term loan facility. The
Topco Credit Facility was scheduled to mature on June 26, 2015 and was comprised of a $150.0 million Term B
Loan and a $150.0 million Term C Loan. On March 5, 2010, in connection with the Senior Notes offering, all of
the Term C Loan was prepaid, plus prepayment penalties and accrued interest thereon. On May 18, 2010, in
connection with the IPO, all of the Term B Loan was prepaid, plus prepayment penalties and accrued and unpaid
interest thereon.
Loss on Extinguishment
In connection with the prepayment of the Term C Loan on March 10, 2010, the Company recognized a loss on
extinguishment of debt totaling $7.2 million. This amount consisted of a $3.0 million prepayment penalty, the
write-off of $2.5 million of unamortized discount, and the write-off of $1.6 million of unamortized debt issuance
costs.
On May 18, 2010, net proceeds from the IPO were used to prepay $164.9 million related to the Term B Loan
(including principal, interest, and a prepayment penalty). Of the Term B Loan prepayment, $58.3 million of principal,
$2.1 million of interest, and $3.5 million of the prepayment penalty was paid to a Golden Gate affiliate. In connection
with the prepayment of the Term B Loan on May 18, 2010, the Company recognized a loss on extinguishment of
debt totaling $13.6 million. This amount consisted of a $9.0 million prepayment penalty, the write off of $2.5 million
of unamortized discount, and the write-off of $2.1 million of unamortized debt issuance costs.
In connection with the Senior Notes repurchases in 2011, the Company recognized a $6.9 million loss on
extinguishment of debt. Of this loss on extinguishment of debt, the premium on the repurchases represented $4.4
million. The remaining loss on extinguishment consisted of the write-off of unamortized debt issuance costs and
unamortized discount totaling $2.5 million.
In connection with amending and restating the existing Opco Revolving Credit Facility in 2011, the Company
recognized a $0.3 million loss on extinguishment of debt, which consisted of the write-off of unamortized debt
issuance costs.
In connection with the prepayment of the Opco Term Loan in 2011, the Company recognized a $2.4 million loss
on extinguishment of debt, which consisted of the write-off of unamortized debt issuance costs.
Loss on extinguishments of debt were recorded as interest expense in the Consolidated Statements of Income and
Comprehensive Income. The write-offs of unamortized debt issuance costs and unamortized discounts represent
a non-cash adjustment to reconcile net income to net cash provided by operating activities within the
Consolidated Statements of Cash Flows.
Fair Value of Debt
The fair value of the Senior Notes was estimated using quoted market prices. As of January 28, 2012, the
estimated fair value of the Senior Notes was $219.9 million.
Letters of Credit
The Company periodically enters into various trade letters of credit (“trade LCs”) in favor of certain vendors to
secure merchandise. These trade LCs are issued for a defined period of time, for specific shipments, and
generally expire three weeks after the merchandise shipment date. As of January 28, 2012 and January 29, 2011,
there were no outstanding trade LCs. Additionally, the Company enters into stand-by letters of credit (“stand-by
LCs”) on an as-need basis to secure merchandise and fund other general and administrative costs. As of
January 28, 2012 and January 29, 2011, outstanding stand-by LCs totaled $1.8 million.
74