Family Dollar 2012 Annual Report Download - page 36

Notes in whole at any time or in part from time to time, at our option, subject to a make-whole premium. In
addition, upon the occurrence of certain change of control triggering events, we may be required to repurchase
the 2021 Notes, at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the date of
repurchase.
On September 27, 2005, we obtained $250 million through a private placement of unsecured senior notes
due September 27, 2015 (the “2015 Notes”), to a group of institutional accredited investors. The 2015 Notes
were issued in two tranches at par and rank pari passu in right of payment with our other unsecured senior
indebtedness. The first tranche has an aggregate principal amount of $169 million, is payable in a single
installment on September 27, 2015, and bears interest at a rate of 5.41% per annum from the date of issuance.
The second tranche has an aggregate principal amount of $81 million, matures on September 27, 2015, with
amortization commencing on September 27, 2011, and bears interest at a rate of 5.24% per annum from the date
of issuance. The second tranche requires a principal payment of $16.2 million on September 27th of each year
through 2015. The 2015 Notes contain certain restrictive financial covenants, which include a consolidated debt
to consolidated total capitalization ratio, a fixed charge coverage ratio, and a priority debt to consolidated net
worth ratio. As of August 25, 2012, we were in compliance with all such covenants.
Principal Payment
During the first quarter of fiscal 2012, we made a scheduled principal payment on our private placement
notes in the amount of $16.2 million. The next principal payment of $16.2 million was paid in September 2012.
Other Considerations
Our merchandise inventories at the end of fiscal 2012 were 23.5% higher than at the end of fiscal
2011. Inventory per store at the end of fiscal 2011 was 16.6% higher than inventory per store at the end of fiscal
2011. The increases were due primarily to the expansion of our assortment of consumable merchandise.
Capital expenditures for fiscal 2012 were $603.3 million, compared with $345.3 million in fiscal 2011, and
$212.4 million in fiscal 2010. The increase in capital expenditures during fiscal 2012, as compared to fiscal 2011,
was due primarily to increased new store openings (including stores opened under our Fee Development
Program), the completion of the construction of our tenth distribution center, investments in fixtures to support
our expanded assortment of consumables, and investments related to renovations, relocations and expansions.
The increase in capital expenditures during fiscal 2011, as compared to fiscal 2010, was due primarily to the
investments we made to drive revenue growth, including our comprehensive store renovation program, other
improvements and upgrades to existing stores, purchases of new and existing stores, and supply chain projects. In
fiscal 2011, we purchased 44 stores, including existing stores from our landlords and the construction of new
stores, compared to 20 existing stores purchased from our landlords in fiscal 2010.
Capital expenditures for fiscal 2013 are expected to be between $600 and $650 million. The planned capital
expenditures in fiscal 2013 are primarily made up of continued investments in new stores, including expenditures
related to our Fee Development Program, investments related to renovations, relocations and expansions and the
completion of the construction of our 11th distribution center. We plan to open approximately 500 new stores and
renovate, relocate or expand approximately 850 stores in fiscal 2012.
During fiscal 2012, we purchased 3.2 million shares of our common stock at a cost of $191.6 million,
compared to 13.9 million shares at a cost of $670.5 million in fiscal 2011, and 9.4 million shares at a cost of
$332.2 million in fiscal 2010. On September 28, 2011, the Company announced that the Board of Directors
authorized the Company to purchase up to an additional $250 million of the Company’s outstanding common
stock. As of the end of fiscal 2012, the Company had $145.7 million remaining under current authorizations.
The timing and amount of any shares repurchased have been and will continue to be determined by
management based on its evaluation of market conditions and other factors. Our share repurchase programs do
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