Staples 2004 Annual Report Download - page 87

STAPLES, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
which was announced in March 2004. Under this program, we are authorized to repurchase up to $1.0 billion of Staples
common stock during fiscal years 2004 and 2005. In 2004, we repaid the outstanding principal and interest due on our
5.875% 150 million Euro Notes, pursuant to the terms of the original debt agreement, and also paid $99.5 million in the
aggregate to shareholders of record on April 26, 2004 in connection with our first annual cash dividend on our common
stock. In 2003, we repaid our $325 million 364-Day Term Loan Agreement (see Note E to the Consolidated Financial
Statements) and received net proceeds of $253.0 million from our issuance of 13.8 million shares of common stock in a
public offering (see Note J to the Consolidated Financial Statements). In 2002, we received the proceeds from the
September 2002 $325 million offering of senior notes and the October 2002 $325 million 364-Day Term Loan Agreement
(See Note E to the Consolidated Financial Statements).
Sources of Liquidity
We utilize cash generated from operations, short-term investments and our main revolving credit facility to cover
seasonal fluctuations in cash flows and to support our various growth initiatives.
We had $2.27 billion in total cash, short-term investments and funds available through credit agreements at
January 29, 2005, which consisted of $802.0 million of available credit, $997.3 million of cash and cash equivalents and
$472.2 million of short-term investments. During fiscal 2004, we also issued letters of credit in the ordinary course of
business to satisfy certain vendor contracts. At January 29, 2005, we had $71.0 million of open letters of credit, which
reduces the available amounts under our revolving credit facility. We finance the majority of our stores and certain
equipment with operating leases.
As of January 29, 2005, the balances available under credit agreements, debt outstanding and principal payments
due on our outstanding debt, operating lease obligations and purchase obligations are presented below (amounts in
thousands):
Payments Due By Period
Total Less
Available Outstanding than 1 More than
Contractual Obligations(1) Credit Obligations Year 1—3 Years 3—5 Years 5 Years
Revolving Credit Facility effective through
December 2009 .................... $678,994 $ — $ — $ — $ — $ —
Senior Notes due August 2007 .......... — 200,000 — 200,000 — —
Notes due October 2012 ............... — 325,000 — — — 325,000
Uncommitted lines of credit ............ 50,000 — — — — —
Other lines of credit .................. 73,019 — — — — —
Capital leases and other notes payable .... — 18,729 1,244 5,422 2,615 9,448
Total Debt Obligations .............. $802,013 $ 543,729 $ 1,244 $ 205,422 $ 2,615 $ 334,448
Operating leases .................... $ — $5,034,543 $576,207 $1,076,095 $937,166 $2,445,075
Purchase obligations(2) ................ $ — $ 433,723 $284,539 $ 76,534 $ 21,875 $ 50,775
Total ............................. $802,013 $6,011,995 $861,990 $1,358,051 $961,656 $2,830,298
(1) The above table excludes scheduled interest payments on debt obligations since all of the Company’s fixed rate debt
agreements are hedged with derivative instruments that are intended to convert the fixed rate debt agreements into
variable interest rate obligations. Therefore, the amount of future interest payments due on these obligations is not
currently determinable (see Notes E and F to the consolidated financial statements).
(2) Many of our purchase commitments are cancelable by us without payment, and we have excluded such commit-
ments, along with intercompany commitments. Contracts cancelable without cause, without penalty and with notice
are valued on the basis of an estimate of what we would owe under the contract upon providing notice of
termination under the terms of the contract.
On December 14, 2004, Staples entered into a revolving credit facility (the ‘‘Credit Facility’’) with a syndicate of
banks, which provides for a maximum borrowing of $750 million. The Credit Facility terminates on December 14, 2009.
The Credit Facility replaced a $600 million revolving credit facility (the ‘‘Prior Credit Facility’’) that had been entered
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