Harris Teeter 1997 Annual Report Download - page 25

Even Better
1997 ANNUAL REPORT
1123
In connection with the closing of certain store locations, Harris Teeter has assigned leases to other merchants with
recourse. These leases expire over the next 12 years and the future minimum lease payments of $11,532,000 over this period
have been assumed by these merchants. In addition, Harris Teeter leases certain store locations which are not
currently in use but are expected to be assigned to other merchants. These leases expire over the next 20 years and
the future minimum lease payments related to these locations total $35,665,000 (approximating $3,222,000 per year for
each of the next five years).
Long-Term Debt
Long-term debt at September 28, 1997 and September 29, 1996 was as follows:
(In thousands) 1997 1996
6.48% Senior Note due $7,143 annually March, 2005 through 2011 $ 50,000 $ 50,000
7.72% Senior Note due April, 2017 50,000 —
7.55% Senior Note due July, 2017 50,000 —
Revolving line of credit, variable rate, due February 2002 33,900 48,600
8.57% Term Note – Repaid in 1997 —50,167
Industrial revenue bond, variable rate, due November 2000 2,500 2,500
Obligations under capital leases and other 4,094 13,168
Total 190,494 164,435
Less current portion 575 5,247
Total long-term debt $ 189,919 $159,188
Long-term debt maturities, excluding obligations under capital leases, in each of the next five fiscal years are as follows:
1998 – $462,000; 1999 – $484,000; 2000 – $367,000; 2001 – $2,746,000; 2002 – $126,000. Additionally in fiscal 2002,
the revolving line of credit with three banks ($33,900,000 as of September 28, 1997) would mature; however, management
expects to obtain the one year extension of term upon receipt of the mutual consent of lenders under the “evergreen”
provisions of the loan agreement.
In fiscal 1996, the Company executed an unsecured $50,000,000 6.48% Senior Promissory Note due March 1, 2011, and
a non-committed $50,000,000 Private Shelf Facility with a major insurance company. As of September 28, 1997, no
commitments had been initiated under the Private Shelf Facility.
In fiscal 1997, the Company executed an unsecured $50,000,000 7.72% Senior Promissory Note due April 15, 2017 and an
unsecured $50,000,000 7.55% Senior Promissory Note due July 15, 2017, with the same major insurance company.
Proceeds from the Notes were used to repay the 8.57% Term Note and reduce the amount borrowed under the revolving
line of credit. During 1997 and 1996, the maximum outstanding borrowing under the revolving line of credit for both years
was $100,000,000 and the average for the 364 days outstanding was $70,942,000 and $70,562,000, respectively. The daily
weighted average interest rate (a variable rate related to the current published CD rate) was 6.1% (5.9%) and a commit-
ment fee of .15% (.125%) of the unused line was charged during 1997 (1996).
Various loan agreements provide, among other things, for maintenance of minimum levels of consolidated shareholders’
equity. At September 28, 1997, consolidated tangible net worth exceeded by $73,312,000 the balance which, under the most
restrictive provisions, must be maintained through September 27, 1998. The requirement shall increase annually by 40%
of consolidated net income for such year.
Total interest expense on long-term debt was $14,615,000, $12,748,000, and $10,649,000 in 1997, 1996 and 1995, respectively.