Napa Auto Parts 2004 Annual Report Download - page 34

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notes to consolidated financial statements
(continued)
4. Credit Facilities
The principal amount of the Company’s borrowings subject to
variable rates before interest rate swap agreements totaled
approximately $968,000 and $177,268,000 at December 31,
2004 and 2003, respectively. The weighted average interest rate
on the Company’s outstanding borrowings was approximately
6.05% and 4.92% at December 31, 2004 and 2003, respectively.
In November 2004, the Company repaid in full a $125,000,000
financing with a consortium of financial institutions and insurance
companies (the Notes) scheduled to mature in November 2010 with
interest at Libor plus .50%, reset every six months. The proceeds
of the Notes were primarily used to repay certain variable rate
borrowings. The Company repaid the Notes with cash generated
from operations.
On October 31, 2003, the Company obtained a $350,000,000
unsecured revolving line of credit with a consortium of financial
institutions that matures in October 2008 and bears interest at Libor
plus .30% (2.70% at December 31, 2004). At December 31, 2004,
no amounts were outstanding under the line of credit. At December
31, 2003, $50,050,000 was outstanding under this line of credit.
Certain borrowings contain covenants related to a maximum
debt-to-equity ratio, a minimum fixed-charge coverage ratio, and
certain limitations on additional borrowings. At December 31,
2004, the Company was in compliance with all such covenants.
Due to the requirements in certain states, the Company also had
unused letters of credit of $47,500,000 and $38,500,000 out-
standing at December 31, 2004 and 2003, respectively.
Total interest expense for all borrowings was $37,260,000 in
2004, $51,538,000 in 2003 and $59,640,000 in 2002.
Amounts outstanding under the Company’s credit facilities
consist of the following:
Approximate maturities under the Company’s credit facilities
are as follows:
5. Shareholders’ Equity
The Company previously had a Shareholder Protection Rights
Agreement. The agreement authorized a dividend of one preferred
share purchase right (a Right) for each share of the Company’s
Common Stock outstanding with each Right representing the
right to purchase one ten-thousandth of a share of Series A
Junior Participating Preferred Stock. On November 15, 2004, the
Board voted to terminate these Rights effective November 30,
2004. The Rights were subject to the terms and conditions of a
Shareholder Protection Rights Agreement, dated as of November
15, 1999 (the Rights Agreement), by and between the Company
and SunTrust Bank, Atlanta, as Rights Agent. Pursuant to the
terms and conditions of the Rights Agreement, the Board’s
action to terminate the Rights caused the Rights Agreement to
simultaneously expire.
6. Leased Properties
The Company leases land, buildings and equipment. Certain land
and building leases have renewal options generally for periods
ranging from two to fifteen years. In addition, certain properties
occupied under operating leases contain normal purchase options.
The Company also has an $85,000,000 construction and lease
facility. Properties acquired by the lessor are constructed and/or
then leased to the Company under operating lease agreements.
The total amount advanced and outstanding under this facility at
December 31, 2004 was approximately $83,880,000. Since the
resulting leases are accounted for as operating leases, no debt
obligation is recorded on the Company’s consolidated balance
sheet.
Land and buildings includes $8,781,000 and $20,490,000,
respectively, with accumulated depreciation of $5,583,000 for
leases of distribution centers and stores capitalized at December
31, 2004. Expenses for capital leases were approximately
$2,776,000, $2,103,000 and $1,879,000 in 2004, 2003, and 2002,
respectively.
Future minimum payments, by year and in the aggregate, under
the capital and noncancelable operating leases with initial or
remaining terms of one year or more consisted of the following
at December 31, 2004:
Rental expense for operating leases was approximately
$132,493,000 in 2004, $117,652,000 in 2003 and $112,473,000
in 2002.
(in thousands) December 31 2004 2003
Unsecured revolving line of credit, $350,000,000,
Libor plus .30%, due October 2008 $ — $ 50,050
Unsecured term notes:
November 30, 2002, Series A Senior Notes,
$250,000,000, 5.86% fixed,
due November 30, 2008 250,000 250,000
November 30, 2002, Series B Senior Notes,
$250,000,000, 6.23% fixed,
due November 30, 2011 250,000 250,000
November 21, 2003, Libor plus .50%,
repaid November 2004 —125,000
Other borrowings 968 2,583
500,968 677,633
Current portion of long-term debt
and other borrowings 968 52,525
$ 500,000 $ 625,108
Capital Operating
(in thousands) Leases Leases
2005 $ 3,210 $ 116,544
2006 3,451 86,696
2007 3,471 62,821
2008 3,510 43,275
2009 3,558 28,630
Subsequent to 2009 13,944 84,792
Total minimum lease payments 31,144 $ 422,758
Amounts representing interest 6,957
Present value of future minimum lease payments $ 24,187
(in thousands)
2005 $ 968
2006 —
2007 —
2008 250,000
2009 —
Subsequent to 2009 250,000
$ 500,968