Restoration Hardware 2014 Annual Report Download - page 63

For fiscal 2013, net cash used in investing activities was $93.9 million primarily as a result of investments in
new stores, investment in supply chain and systems infrastructure, renovations to our corporate headquarters and
investment in information technology.
For fiscal 2012, net cash used in investing activities was $49.4 million primarily as a result of investments in
new stores, investment in supply chain and systems infrastructure and the purchase of a new domain name.
Net Cash Provided By Financing Activities
Financing activities consist primarily of borrowings related to the convertible notes offering, borrowing and
repayments related to the revolving line of credit, term loan and capital contributions.
For fiscal 2014, net cash provided by financing activities was $253.8 million primarily due to the $350
million convertible senior notes issued in June 2014, which provided net proceeds of $311.7 million after taking
into consideration the convertible note hedge and warrant transactions, as well as the debt issuance costs. Net
proceeds from the exercise of stock options provided $16.4 million, excess tax benefits from the exercise of stock
options provided $16.4 million and borrowings under build-to-suit lease transactions provided $1.8 million. The
cash provided by these financing activities was partially offset by net repayments on the revolving line of credit
of $85.4 million, cash paid for employee taxes related to net settlement of equity awards of $3.1 million,
capitalized deferred financing fees related to the revolving line of credit amendment of $2.1 million and
payments on capital lease obligations of $1.8 million.
For fiscal 2013, net cash provided by financing activities was $11.5 million primarily due to net proceeds
from the exercise of stock options of $7.6 million, excess tax benefits from the exercise of stock options of $3.7
million and net borrowings under the revolving line of credit of $2.9 million, partially offset by payments on
capital lease obligations of $2.6 million.
For fiscal 2012, net cash provided by financing activities was $53.1 million primarily due to the issuance of
common stock which generated proceeds of $106.8 million, partially offset by issuance costs of $9.1 million.
This overall increase in cash provided by the initial public offering was partially offset by net repayments under
the revolving line of credit of $25.0 million, the repayment in full of the term loan of $15.0 million and payments
on capital lease obligations of $4.2 million.
Convertible Senior Notes
0.00% Convertible Senior Notes due 2019
In June 2014, we issued $350 million principal amount of 0.00% convertible senior notes due 2019 (the “Notes”)
in a private offering. The Notes are governed by the terms of an indenture between us and U.S. Bank National
Association, as the Trustee. The Notes will mature on June 15, 2019, unless earlier purchased by us or converted. The
Notes will not bear interest, except that the Notes will be subject to “special interest” in certain limited circumstances
in the event of our failure to perform certain of our obligations under the indenture governing the Notes. The Notes are
unsecured obligations and do not contain any financial covenants or restrictions on the payments of dividends, the
incurrence of indebtedness or the issuance or repurchase of securities by us or any of our subsidiaries. Certain events
are also considered “events of default” under the Notes, which may result in the acceleration of the maturity of the
Notes, as described in the indenture governing the Notes.
The initial conversion rate applicable to the Notes is 8.6143 shares of common stock per $1,000 principal
amount of Notes, which is equivalent to an initial conversion price of approximately $116.09 per share. The
conversion rate will be subject to adjustment upon the occurrence of certain specified events, but will not be
adjusted for any accrued and unpaid special interest. In addition, upon the occurrence of a “make-whole
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