Foot Locker 2013 Annual Report Download - page 74

Download and view the complete annual report

Please find page 74 of the 2013 Foot Locker 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

Foot Locker, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13. Revolving Credit Facility
On January 27, 2012, the Company entered into an amended and restated credit agreement (the ‘‘2011
Restated Credit Agreement’’) with its banks. The 2011 Restated Credit Agreement provides for a $200 million
asset based revolving credit facility maturing on January 27, 2017. In addition, during the term of the 2011
Restated Credit Agreement, the Company may make up to four requests for additional credit commitments in
an aggregate amount not to exceed $200 million. Interest is based on the LIBOR rate in effect at the time of the
borrowing plus a 1.25 to 1.50 percent margin depending on certain provisions as defined in the 2011 Restated
Credit Agreement.
The 2011 Restated Credit Agreement provides for a security interest in certain of the Company’s domestic
assets, including certain inventory assets, but excluding intellectual property. The Company is not required to
comply with any financial covenants as long as there are no outstanding borrowings. With regard to the pay-
ment of dividends and share repurchases, there are no restrictions if the Company is not borrowing and the
payments are funded through cash on hand. If the Company is borrowing, Availability as of the end of each
fiscal month during the subsequent projected six fiscal months following the payment must be at least 20
percent of the lesser of the Aggregate Commitments and the Borrowing Base (all terms as defined in the 2011
Restated Credit Agreement). The Company’s management does not currently expect to borrow under the
facility in 2014, other than amounts used to support standby letters of credit.
At February 1, 2014, the Company had unused domestic lines of credit of $199 million, while $1 million was
committed to support standby letters of credit. The letters of credit are primarily used for insurance programs.
Deferred financing fees are amortized over the life of the facility on a straight-line basis, which is comparable to
the interest method. The unamortized balance at February 1, 2014 is $2 million.
The quarterly facility fees paid on the unused portion was 0.25 percent for both 2013 and 2012. There were no
short-term borrowings during 2013 or 2012. Interest expense, including facility fees, related to the revolving
credit facility was $1 million for both 2013 and 2012, and $4 million for 2011.
14. Long-Term Debt and Obligations Under Capital Leases
2013 2012
(in millions)
8.5% debentures payable 2022 $118 $118
Unamortized gain related to interest rate swaps
(1)
13 15
Obligations under capital leases
(2)
8—
139 133
Less: current portion of obligations under capital leases 3—
$136 $133
(1) In 2009, the Company terminated an interest rate swap at a gain. This gain is being amortized as part of interest expense over the
remaining term of the debt using the effective-yield method.
(2) In connection with the acquisition of the Runners Point Group in the second quarter of 2013, the Company recognized capital lease
obligations. These were existing agreements primarily related to the financing of certain store fixtures. These obligations were calcu-
lated using an average interest rate of 3.72%.
Interest expense related to long-term debt and the amortization of the associated debt issuance costs, was $9
million for all years presented.
51