Staples 2007 Annual Report Download - page 106

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STAPLES, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
reducing the available credit under our revolving credit facility from $750.0 million to $678.4 million. We finance the
majority of our stores and certain equipment with operating leases.
As of February 2, 2008, 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 October 2011 ............ $678,436 $ — $ — $ — $ — $ —
Notes due October 2012 ............ — 325,000 — — 325,000 —
Lines of credit ................... 113,991 —————
Capital leases and other notes payable . . — 31,670 23,806 6,624 860 380
Total Debt Obligations ............ $792,427 $ 356,670 $ 23,806 $ 6,624 $ 325,860 $ 380
Operating leases .................. $ — $6,225,299 $ 756,963 $1,446,995 $1,233,938 $2,787,403
Purchase obligations(2) ............. $ — $ 702,421 $ 308,512 $ 239,418 $ 96,047 $ 58,444
Total .......................... $792,427 $7,284,390 $1,089,281 $1,693,037 $1,655,845 $2,846,227
(1) The above table excludes scheduled interest payments on debt obligations since all of our 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 D and E in the Notes to the Consolidated Financial Statements).
(2) Many of our purchase commitments may be canceled by us without advance notice or payment, and we have
excluded such commitments, along with intercompany commitments. Contracts that may be terminated by us
without cause or penalty, but that require advance notice for termination are valued on the basis of an estimate of
what we would owe under the contract upon providing notice of termination.
On October 13, 2006, we entered into an Amended and Restated Revolving Credit Agreement (the ‘‘Credit
Agreement’’) with Bank of America, N.A and other lending institutions. The Credit Agreement amended and restated
the Revolving Credit Agreement dated as of December 14, 2004, which provided for a maximum borrowing of
$750.0 million and was due to expire in December 2009 (the ‘‘Prior Agreement’’). The Credit Agreement provides for a
maximum borrowing of $750.0 million which, upon approval of the lenders, we may increase to $1.0 billion, and expires
on October 13, 2011. Borrowings made pursuant to the Credit Agreement may be syndicated loans, competitive bid
loans, or swing line loans, the combined sum of which may not exceed the maximum borrowing amount. Amounts
borrowed under the Credit Agreement may be borrowed, repaid and reborrowed from time to time until October 13,
2011.
Borrowings made pursuant to the Credit Agreement as syndicated loans will bear interest, payable quarterly or, if
earlier, at the end of any interest period, at either (a) the base rate, described in the Credit Agreement as the higher of
the annual rate of the lead bank’s prime rate or the federal funds rate plus 0.50%, or (b) the Eurocurrency rate (a
publicly published rate) plus a percentage spread based on our credit rating and fixed charge coverage ratio. Borrowings
made as competitive bid loans bear the competitive bid rate as specified in the applicable competitive bid. Swing line
loans bear interest that is the lesser of the base rate or the swing line rate as quoted by the administrative agent under the
terms of the Credit Agreement. Under the Credit Agreement, we agree to pay a facility fee, payable quarterly, at rates
that range from 0.060% to 0.125% depending on our credit rating and fixed charge coverage ratio, and when applicable,
a utilization fee. The payments under this Credit Agreement are guaranteed by the same subsidiaries that guarantee our
publicly issued notes (see Note L in the Notes to the Consolidated Financial Statements).
B-8