Express 2012 Annual Report Download - page 74

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 a number of factors, such as recent trade activity, size,
timing, and yields of comparable bonds and is, therefore, within Level 2 of the fair value hierarchy. As of
February 2, 2013, the estimated fair value of the Senior Notes was $217.9 million.
Letters of Credit
The Company may enter 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 3 weeks after the merchandise shipment date. As of February 2, 2013 and January 28, 2012, 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 February 2, 2013 and
January 28, 2012, outstanding stand-by LCs totaled $2.1 million and $1.8 million, respectively.
10. Stockholders’ Equity
Prior to the Reorganization (see Note 1), the Company was a limited liability company with outstanding Class L,
A, and C equity units.
Certain executive management members were provided the opportunity to purchase equity ownership for a
combination of cash and promissory notes payable. These 7-year promissory notes were fully-recourse to the
employee, accrued interest on an arm’s length rate basis, and were secured by a pledge of all equity interests
purchased by the executive management member. On February 9, 2010, management promissory notes totaling
$5.6 million were repaid in full by each member of management, and, therefore, interest income received by the
Company in 2010 was negligible.
On May, 18, 2010, the Company sold 10.5 million shares of newly-issued common stock in the IPO, raising net
proceeds of approximately $160.1 million, after deducting the underwriting discount and costs incurred related to
the IPO.
In conjunction with the Reorganization described in Note 1, the Company’s certificate of incorporation
authorized 500.0 million shares of common stock and 10.0 million shares of preferred stock. No preferred stock
was issued or outstanding as of February 2, 2013 or January 28, 2012. Further, effective May 2, 2010, the
Company became taxed as a corporation rather than as a partnership. In accordance with Staff Accounting
Bulletin (“SAB”) Topic 4B, the Company reclassified $87.2 million in undistributed losses through May 12,
2010 to additional paid-in-capital. The Company also recorded a non-cash capital contribution of $0.8 million
related to certain tax assets it received.
On November 30, 2010, the Board approved a special dividend of $0.56 per share of the Company’s common
stock, totaling $49.5 million. The special dividend was paid on December 23, 2010 to shareholders of record as
of the close of business on December 16, 2010.
During 2011 and 2010, the Company repurchased certain shares of common stock or equity units at cost from
employees who were separated from the Company.
On May 24, 2012, the Company’s Board authorized the repurchase of up to $100 million of the Company’s
common stock (“Repurchase Program”), which may be made from time to time in open market or privately
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