Harris Teeter 2008 Annual Report Download - page 47

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RUDDICK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
Covenants in certain of the Company’s long-term debt agreements limit the total indebtedness that the
Company may incur. The most restrictive of these covenants is a consolidated maximum leverage ratio and
a minimum fixed charge coverage ratio as defined in the Company’s credit agreement. As of September 28,
2008, the amount of additional debt that could be incurred within the limitations of the debt covenants exceeded
the additional borrowings available under the revolving credit facility. As such, management believes that the
limit on indebtedness does not restrict the Company’s ability to meet future liquidity requirements through
borrowings available under the Company’s revolving credit facility, including any liquidity requirements
expected in connection with the Company’s expansion plans for the foreseeable future.
Long-term debt at September 28, 2008 and September 30, 2007 was as follows (in thousands):
2008 2007
6.48% Senior Note due $7,143 annually through April, 2011 .... $ 21,428 $ 28,572
7.72% Senior Note due April, 2017 ........................ 50,000 50,000
7.55% Senior Note due July, 2017 ......................... 50,000 50,000
Bank Term Loan due December, 2012, variable interest ....... 100,000 —
Revolving Line of Credit, variable interest.................. 29,000 91,000
Capital lease obligations ................................ 66,558 39,327
Other obligations ..................................... 3,592 5,493
Total ............................................. 320,578 264,392
Less current portion ................................. 9,625 8,535
Total long-term debt ................................... $ 310,953 $ 255,857
Long-term debt maturities (including capital lease obligations) in each of the next five fiscal years are as
follows: 2009 - $9,625,000; 2010 - $ 9,780,000; 2011 - $ 9,529,000; 2012 - $ 1,745,000; 2013 - $ 130,823,000.
Total interest expense, net of amounts capitalized, on debt and capital lease obligations was $20,334,000,
$17,654,000 and $14,125,000 for fiscal 2008, 2007 and 2006, respectively. Capitalized interest totaled $2,220,000,
$2,318,000 and $1,083,000 for fiscal 2008, 2007 and 2006, respectively.
FINANCIAL INSTRUMENTS
Financial instruments which potentially subject the Company to concentration of credit risk consist
principally of cash equivalents and receivables. The Company limits the amount of credit exposure to
each individual financial institution and places its temporary cash into investments of high credit quality.
Concentrations of credit risk with respect to receivables are limited due to their dispersion across various
companies and geographies.
The carrying amounts for certain of the Company’s financial instruments, including cash and cash
equivalents, accounts and notes receivable, accounts payable and other accrued liabilities approximate fair value
because of their short maturities. The fair value of variable interest debt is equal to its carrying amount. The
estimated fair value of the Company’s significant fixed interest debt obligations (Senior Notes due at various
dates through 2017) outstanding as of September 28, 2008 was $127,053,000 as compared to its carrying amount
of $121,428,000. This estimated fair value is computed based on borrowing rates currently available to the
Company for loans with similar terms and maturities.
CAPITAL STOCK
The capital stock of the Company authorized at September 28, 2008 was 75,000,000 shares of no par value
Common Stock, 4,000,000 shares of Preference Stock (non-cumulative voting $0.56 convertible, $10 liquidation
value), and 1,000,000 shares of Additional Preferred Stock. No shares of Preference Stock or Additional Preferred
Stock were issued or outstanding at September 28, 2008.