Pier 1 2012 Annual Report Download - page 52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The Company’s remaining long-term debt matures as follows (in thousands):
Fiscal Year Debt
2013 -
2014 -
2015 -
2016 -
Thereafter 9,500
Total debt $ 9,500
The Company has a $300,000,000 secured credit facility with a $100,000,000 accordion feature. Provided
that there is no default and no default would occur as a result thereof, the Company may request that the facility
be increased to an amount not to exceed $400,000,000. This facility matures in April 2016 and is secured by the
Company’s eligible merchandise inventory and third-party credit card receivables. At the Company’s option,
borrowings will bear interest, payable quarterly or, if earlier, at the end of each interest period, at either (a) the
LIBOR plus a spread varying from 175 to 225 basis points per year, depending on the amount then borrowed
under the facility, or (b) the prime rate plus a spread varying from 75 to 125 basis points per year, depending on
the amount then borrowed under the facility The Company pays a fee ranging from 175 to 225 basis points per
year for standby letters of credit depending on the average daily availability as defined by the agreement, 87.5 to
112.5 basis points per year for trade letters of credit, and a commitment fee of 37.5 basis points per year for any
unused amounts. As of February 25, 2012, the fee for standby letters of credit was 200 basis points per year and
100 basis points per year for trade letters of credit. In addition, the Company will pay, when applicable, letter of
credit fronting fees on the amount of letters of credit outstanding.
The facility includes a requirement that the Company maintain minimum availability equal to the greater
of 10% of the line cap, as defined by the facility, or $20,000,000. The Company’s secured credit facility may
limit certain investments and, in some instances, limit payment of cash dividends and repurchases of the
Company’s common stock. The Company will not be restricted from paying certain dividends unless credit
extensions on the line result in availability over a specified period of time that is projected to be less than 20% of
the lesser of either $300,000,000 or the calculated borrowing base, subject to the Company meeting a fixed
charge coverage requirement when availability over the same specified period of time is projected to be less than
50% of the lesser of either $300,000,000 or the calculated borrowing base.
During fiscal 2012, 2011 and 2010, the Company had no cash borrowings under this facility. As of
February 25, 2012, the Company’s borrowing base, as defined by the agreement, was $255,572,000. This
borrowing base calculation was subject to advance rates and commercially reasonable availability reserves. As of
February 25, 2012, the Company utilized approximately $43,354,000 in letters of credit and bankers’ acceptances
against the secured credit facility. Of the outstanding balance, approximately $376,000 related to trade letters of
credit and bankers acceptances for merchandise purchases, $25,475,000 related to standby letters of credit for the
Company’s workers’ compensation and general liability insurance policies, $9,715,000 related to standby letters
of credit related to the Company’s industrial revenue bonds, and $7,788,000 related to other miscellaneous
standby letters of credit. After excluding the $43,354,000 in utilized letters of credit and bankers’ acceptances
from the borrowing base, $212,218,000 remained available for cash borrowings.
NOTE 6 – EMPLOYEE BENEFIT PLANS
The Company offers a qualified defined contribution employee retirement plan to all its full- and part-
time personnel who are at least 18 years old and have been employed for a minimum of six months. During fiscal
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