Radio Shack 2003 Annual Report Download - page 47

RADIOSHACK 2003 Annual Report 45
May 15, 2011. In August 2001, under the terms of an
exchange offering filed with the SEC, we exchanged substan-
tially all of these notes for a similar amount of publicly
registered notes. Because no additional debt was issued in
the exchange offering, the net effect of this exchange was
that no additional debt was issued on August 3,2001, and
substantially all of the notes are now registered with the SEC.
We have a $300.0 million debt shelf registration statement
which became effective in August 1997. In August 1997,
we issued $150.0 million of 10-year unsecured long-term
notes under this shelf registration.The interest rate on the
notes is 6.95% per annum with interest payable on
September 1 and March 1 of each year, commencing March
1, 1998. These notes are due September 1, 2007.
We also issued, in various amounts and on various dates
from December 1997 through September 1999, medium-
term notes totaling $150.0 million under the shelf registration.
At December 31, 2003, $44.5 million of these notes
remained outstanding.The interest rates at December 31,
2003, for the outstanding $44.5 million medium-term notes
ranged from 6.42% to 7.35% and had a weighted average
coupon rate of 7.19%.These notes have maturities ranging
from 2004 to 2008. As of December 31, 2003, there was no
availability under this shelf registration.
In June and August 2003, we entered into interest rate
swap agreements with underlying notional amounts of
debt of $100.0 million and $50.0 million, respectively, with
maturities in May 2011. Additionally, during the third
quarter of 2001, we entered into several interest rate swap
agreements with notional amounts totaling $150.0 million,
with maturities ranging from 2004 to 2007.We entered
into these agreements to effectively convert a portion of our
long-term fixed rate debt to a variable rate. Under these
agreements, we have contracted to pay a variable rate of
LIBOR plus a markup and to receive fixed rates ranging
from 6.950% to 7.375%.We have designated these agree-
ments as fair value hedging instruments.We recorded an
amount in other assets, net, of $4.5 million and $15.4 million
(their fair value) at December 31, 2003 and 2002, respec-
tively, for the swap agreements and adjusted the fair value
of the related debt by the same amount.Fair value was
computed using interest rates which were in effect as of
December 31, 2003 and 2002, respectively, for similar
instruments.
SHORT-TERM BORROWING FACILITIES
Year Ended December 31,
(In millions) 2003 2002 2001
Domestic seasonal bank credit lines
and bank money market lines:
Lines available at year end $700.0 $705.0 $774.0
Loans outstanding at year end ———
Weighted average interest rate
at year end ———
Weighted average loans
outstanding $— $ — $ 22.1
Weighted average interest rate
during year —— 5.7%
Short-term foreign credit lines:
Lines available at year end $ 7.2 $ 15.8 $ 24.5
Loans outstanding at year end ———
Weighted average interest
rate at year end ———
Weighted average loans
outstanding $— $ — $ 1.9
Weighted average interest
rate during year —2.1% 4.9%
Letters of credit and banker’s
acceptance lines of credit:
Lines available at year end $162.7 $167.4 $206.0
Acceptances outstanding
at year end ———
Letters of credit open against
outstanding purchase orders
at year end $ 20.0 $ 26.4 $ 31.2
Commercial paper credit facilities:
Commercial paper outstanding
at year end $— $— $—
Weighted average interest
rate at year end ———
Weighted average commercial
paper outstanding $— $ 0.1 $ 83.2
Weighted average interest
rate during year —2.0% 5.8%
Our short-term credit facilities, including revolving credit lines,
are summarized in the accompanying short-term borrow-
ing facilities table above. The method used to compute
averages in the short-term borrowing facilities table is
based on a daily weighted average computation that takes
into consideration the time period such debt was outstand-
ing, as well as the amount outstanding. Our financing,
primarily short-term debt, consists of short-term seasonal
bank debt and commercial paper. The commercial paper
and the short-term seasonal bank debt have a typical
maturity of 90 days or less.The amount of commercial
paper that can be outstanding is limited to a maximum of
the unused portion of our $600 million bank syndicated
revolving credit facility described in more detail below.