Harris Teeter 2008 Annual Report Download - page 46

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RUDDICK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
Rent expense for the fiscal years was as follows (in thousands):
2008 2007 2006
Minimum, net of sublease income ................... $ 85,693 $ 84,106 $ 79,281
Contingent ...................................... 1,932 1,597 1,471
Total .......................................... $ 87,625 $ 85,703 $ 80,752
Future minimum lease commitments (excluding leases assigned - see below) and total minimum sublease
rental income to be received under non-cancelable subleases at September 28, 2008 were as follows (in
thousands):
Fiscal Year Operating Leases Subleases Capital Leases
2009 ........................................ $ 91,913 $ (2,486 ) $ 7,566
2010 ......................................... 95,344 (2,403) 7,581
2011 ......................................... 97,218 (2,176) 7,596
2012 ......................................... 97,927 (2,075) 7,611
2013 ......................................... 97,447 (1,669) 7,691
Later years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,040,914 (4,346) 111,863
Total minimum lease obligations (receivables) . . . . . . . $1,520,763 $(15,155) 149,908
Amount representing interest ......................................... (83,350)
Present value of net minimum obligation (included with long-term debt) . . . . . . $ 66,558
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 13 years and the future minimum lease payments
totaling $57,745,000 over this period have been assumed by these merchants.
LONG-TERM DEBT
On December 20, 2007, the Company and eleven banks entered into a new credit agreement that provides
for a five-year revolving credit facility in the aggregate amount of up to $350 million and a non-amortizing term
loan of $100 million due December 20, 2012. The new credit agreement also provides for an optional increase
of the revolving credit facility by an additional amount of up to $100 million and two 1-year maturity extension
options, both of which require consent of the lenders. The new credit agreement replaced a previously existing
$350 million revolving credit facility dated June 7, 2006. Outstanding borrowings under the new credit agreement
bear interest at a variable rate based on a reference to: rates on federal funds transactions with members of the
Federal Reserve System or the prime rate in effect on the interest determination date; the LIBOR Market Index
Rate; or, the LIBOR Rate, each plus an applicable margin. The amount which may be borrowed from time
to time and the applicable margin to the referenced interest rate are each dependent on a leverage factor. The
leverage factor is based on a ratio of rent-adjusted consolidated funded debt divided by earnings before interest,
taxes, depreciation, amortization and operating rents, as set forth in the credit agreement. The more significant
of the financial covenants which the Company must meet during the term of the new credit agreement include a
maximum leverage ratio and a minimum fixed charge coverage ratio. As of September 28, 2008, the Company
was in compliance with all financial covenants of the credit agreement. Issued letters of credit reduce the amount
available for borrowings under the revolving credit facility and amounted to $28,540,000 as of September 28,
2008. The Company is charged a variable commitment fee based on the amount available for borrowings, which
amounted to $292,460,000 as of September 28, 2008. The commitment fee rate applied to the net unused balance
was 0.120%, 0.120% and 0.120% for fiscal 2008, 2007 and 2006, respectively.